As students face academic rigors in college, their parents face a financial challenge: how to pay for this period of their child's life.

Room and board, tuition, and other costs can easily run up to tens of thousands of dollars per year, even for more inexpensive colleges. While some families can meet these costs with savings, many will have to find some way to borrow money to cover the bill.

One option involves taking out a home equity line of credit. Brian O'Connell, writing for the NASDAQ stock exchange, says this loan gives a homeowner a fixed amount of money to draw on; the sum is based on how much a creditor determines the home is worth. This money can be used as needed to pay the bills you receive from the college.

A home equity line of credit has a number of potential benefits when it comes to paying for your child's education. However, homeowners should also be extremely cautious if they use this option; in a worst case scenario, this option can result in the loss of the home.

ADVANTAGES

The main benefits of a home equity line of credit relate to its cost and tax impact. Lynnette Khalfani-Cox, writing for the mortgage site HSH.com, says this kind of loan is often less costly than other options because of low interest rates. In addition, the interest paid on a home equity line of credit is tax deductible.

Khalfani-Cox says a home equity line of credit is also easy to access and carries fewer restrictions. A homeowner can write a check off the amount approved by the creditor and send it off to the college, simplifying the process of covering the costs. The equity also won't have the annual caps on how much you can borrow, a stipulation present in some other kinds of college loans.

Home equity lines of credit have relatively low costs in other areas. Don Taylor, writing for Bankrate, says the closing costs are not as high as other loan options involving the home. O'Connell says the annual fees on a home equity line of credit tend to be minimal or even nonexistent.

Lenders might also offer plenty of flexibility in payments on the home equity line of credit. O'Connell says you might only have to pay the interest on the loan for several years, giving you plenty of time to cover college costs while your son or daughter is in school. Once they've graduated, you'll have to start paying off the principal as well.

The Consumer Financial Protection Bureau says a home equity line of credit works best for stable borrowers. They say these homeowners will have a significant amount of savings, stable employment, and knowledge of both the benefits and risks of this kind of loan.

DISADVANTAGES

The biggest risk of a home equity line of credit is the fact that your home is being offered up as collateral. The Consumer Financial Protection Bureau says that if you cannot make payments on the loan for any reason, you risk going into foreclosure.

Even if you can successfully make payments to cover these costs, it will take longer to pay off the mortgage as a result. If you hoped to own your house free and clear by a certain year, you'll have to push that deadline back.

Home equity lines of credit are also more likely to have adjustable rates than fixed rates. As a result, Taylor says borrowers might unexpectedly find the rates increasing over time.

It might be difficult to even get this kind of loan. O'Connell says some lenders have been more cautious about the number of home equity lines of credit they will approve, and some may have ceased offering this option at all.

Khalfani-Cox says the loan is also inflexible in certain areas. If you haven't been paying your mortgage for long, you won't have much equity in the home and therefore won't have much money to draw on. You are also less likely to encounter options such as forbearance, deferments, or income-based repayment if you are having difficulty making loan payments.

Using your home's value to finance your child's investment can be considered an investment in their future. However, it is also trading the more solid asset of your home's equity for the one-time expense of your child's education.

Though a home equity line of credit can be helpful for paying college costs, it should not be the only option you consider. Federal student loans, scholarships, and a student's part-time work are all ways to take on educational bills.

Make sure you fully understand the risks of a home equity line of credit before you decide to apply for one to help with college costs. Consulting with a financial adviser, tax adviser, or lender will give you more information.