Monday, 28 September 2020

As millions of families across the United States face the back-to-school season during a pandemic, many are trying to determine the best approach to educate their children safely. While some parents are cautiously optimistic about having their children return to in-person schooling, others are finding their school districts have mandated 100% remote learning. Yet others are taking at-home learning into their own hands.

According to a recent survey from the American Federation for Children, 40% of respondents are seriously considering homeschool as an option for their family. (Prior to COVID-19, the National Center for Education Statistics found that only 3% of school-aged children in the U.S. were homeschooled.)

For many families considering homeschooling, collaborating with other parents on creating homeschooling pods—small groups of similarly aged children taught by the same instructors—has become a popular post-pandemic option.

But such micro-pods, as they are also called, do not come cheap. To better manage such expenses, some parents may wish to consider how a home equity line of credit (HELOC) may help them finance this alternate form of learning.

Determining if a home equity line of credit is an A+ option

For many families, managing their child's long-term educational needs and parental piece of mind is worth paying the price to participate in a homeschooling pod. These typically take place by rotating homes or are conducted in a predetermined location.

Families chip in to cover the cost of instructors, with monthly expenses starting at around $1200 per child for those working with a service that helps facilitate homeschooling pods, such as Swing Education.

There are also additional expenses to consider, ranging from course curriculum, extra curricular excursions, technology, and additional educational support outside of regular instruction time. Among the costs to consider:

  • Will you need childcare to complement your child's school schedule and your work schedule? If so, how much will that childcare cost?
  • How many hours of instruction would you like your child to have each week?
  • How much on average will it cost for your child to participate in extra curricular activities? What is the average cost for entrance fees to venues?
  • What will you need to budget for technology expenses? Will you pay for software, internet, and curriculum expenses monthly or annually?

Prior to the onset of COVID, homeowners typically used a home equity line of credit to access funds for home remodels, travel, or as a way to quickly create some liquidity in their financial portfolio. Those who have accumulated enough equity in their home to borrow against it at an affordable rate can now add homeschooling pods to the list of expenses a HELOC could cover.

Dealing financially with the unexpected

Right now is a financially challenging time for many, especially with the multitude of decisions we're faced with every day as we try to rebuild a sense of normalcy. With education looming as a big question, having a financial tool like a home equity line of credit can be a welcomed way to manage unexpected expenses that are a direct result of COVID.

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