Paying for College Without the Home Equity Option

M.P. Dunleavey:

The colleges have given their answers. They have sent acceptance letters to high school seniors and their parents along with notifications of how much, if any, financial aid they are offering.
Now, those parents and students have until May 1 to address what may be the toughest questions: Should they choose the most affordable school? Or should they pick the one with more prestige, even if it’s a financial stretch, even if it means going deep into debt?
While the questions are not new, they are particularly difficult to answer in this economically tumultuous year. Traditional and even nontraditional sources of college financing are suddenly in question. Dozens of companies that once provided billions of dollars in student loans have left the market. Other banks are tightening their standards, making student loans harder to get.
On top of which, the continued turmoil in real estate has meant that home equity — a source of security for many families and a fallback for college funds for some of them — is not as easy, or in some cases impossible, to tap.