Q: I have both federal and private college loans to pay off. I am not too concerned with my federal loans.
After I graduated, I consolidated my federal loans to lock in a low rate and I did a year of AmeriCorps so I was able to get additional money to pay my federal loans. However, my private loans have a variableinterest rate.
I had heard of folks who have taken out home equity loans (or have gotten their parents to do so and then pay them back) to take advantage of a fixed rate and use this to pay off their college loan debt.
I am not a homeowner nor can my parents do this for me and would like to know if there are other (creative) ways to get a fixed interest rate and decrease the burden of my private loans. Thank you!
A: Thanks for writing to ask about solving a private college loan question. You were correct that a homeowner could borrow against the equity in real estate, and often find an interest rate less onerous than that which your private education lender is seeking, and of course interest on home loans is deductible. Sadly for you, neither you nor your parents have a home to use for this purpose, and several years ago you'd probably be out of luck.
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