Every parent finds themselves in a difficult financial situation when their child goes off to college, and that is figuring out how to pay for it. Your child can take out student loans and find themselves in massive debt after they graduate, or you can try to find a way to pay for their tuition as they go through school.

If you want to pay for some of the financial burden of college but do not have the cash on hand, you may be looking for alternative ways to get the money. Consider mortgaging your home, since it may be a better alternative than you think to financial aid.

Why Mortgage Your Home For College Tuition Payments

If you have not been paying attention to the current mortgage rates, they have been at historic low rates for the past few years. In fact, they are lower than what current PLUS student loan rates are at, which are around 7% for this current school year.

For parents looking to pay for a child's education with as little in interest payments as possible, a mortgage could help you borrow money in the 3% interest range for an adjustable rate mortgage.

Consider Downsizing Your Home

With your child finally leaving the nest and going off to college, now may be the time to downsize your home. Those extra rooms will be empty for most of the year now, and you won't need the extra space like you once did.

Downsizing means that you can get a new mortgage for a smaller and cheaper home, and use the remaining cash that you receive to help pay for your child's college tuition. It may not make sense for you to maintain the large home you had when your child was growing up, so do not rule out downsizing.

Consider a Home Equity Loan

You do not always need to get a mortgage on your home if you do not need the full amount to pay for tuition. There is also an option to get a home equity loan, with interest rates currently being in the 5% range. This is a little bit different from a mortgage, since you take the money that you need as credit and pay it back when you can rather than a fixed monthly payment. The faster you can pay back the money means you'll be paying less interest on the loan.