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As students settle in for the school year, many are wondering how they’ll stretch their limited bank accounts. A crash course on frugality and a Masters in the art of budgetary science are prerequisites for any student hoping to avoid mounds of student debt.
The national average cost of tuition is approximately $6,000. Add in recent figures from the Canadian Federation of Students pegging the average student debt at a whopping $27,000 and it’s no wonder parents and students are stressed when it comes to financing higher education. One surprising source of financial relief is the millions of dollars worth of loyalty points Canadians are sitting on.
Until recently, there were limited options for using points to cover tuition or pay down student debt. Depending on the reward program or credit card, parents could offset tuition fees by converting their miles or points into a ‘cash back’ credit and apply it to their credit card balance. If your post secondary institution allows you to pay for tuition or school supplies using your credit card (most don’t) this could be considered a way to use points to pay for tuition. Of course a straight ‘cash back’ reward card operates with the same principle. The problem with this option is the ‘credit’ is only rewarded once per year and quickly forgotten or rolled into covering an outstanding balance. Further, most experts agree that the ‘cash back’ option comes with low redemption value and there are better ways to use reward points.
Now, thanks to an innovative program called HigherEdPoints, students and their families have a more viable option for using points for tuition. Launched in late 2013 and covered at that time by Rewards Canada (see Global News), HigherEd points is starting to gain traction.
The company currently allows you to redeem Aeroplan miles to pay for part or all of your tuition at over 75 post-secondary institutions across Canada or to pay off student debt with Student Aid Alberta or Ontario Student Assistance Program.
Here is how you can pay with Tuition with Miles & Points
Aeroplan members can help any student (family or friend) by redeeming 35,000 Aeroplan Miles for a $250 credit towards tuition. HigherEdPoints shows up as a redemption item in the Aeroplan reward catalog. When a $250 credit is purchased and unique confirmation code issued, the student, parent or donor returns with the code to their HigherEd Points account and transfers the funds to a designated participating institution on behalf of a student. Complete instructions can be found here: https://www.higheredpoints.com/how-it-works/
We recently caught up with HigherEdPoints founder Suzanne Tyson who claims the program is responsible for paying for more than $160,000 in tuition to date and has grown from an initial two post secondary institutions to 75 in just two years.
Wow. $17,750 in tuition? That's huge! That's nearly 2.5 Million Aeroplan Miles and that brings us to who might use this redemption option. The reality is not many students, especially those who are just starting university or college will have 35,000 Aeroplan Miles let alone 2.5 Million! But they have family and friends who do and that is where Higher Ed Points sees a lot of traction. Parents, Grandparents, Uncles and Aunts using their Aeroplan miles to help their kids, grand kids, nephews and nieces attend school. There are a surprising amount of Mile-ionaires within Aeroplan and many of those members have more miles than they know what to do with them. Some of them redeem for their first class or business class flights and still earn hundreds of thousands of miles a year.
As for students, if they are able to accumulate 35,000 Aeroplan miles on their own it makes sense to use the miles for tuition. Any way to pay down your tuition, reduce interest charges and avoid student debt is a good thing.