In a move that will make obtaining a degree even more worth it, grads who owe federal government money on their student loans could soon repay their debt with travel rewards points.
As it turns out, we can thank the previous Conservative government for giving the green light last February for a deal between Employment and Social Development Canada and Higher Ed Points, a company that enables registered students to put reward points – like those accumulated through Aeroplan – towards tuition and loan payments.
The program is already in place in Alberta and Ontario.
Of course, a shift to the federal level means that hundreds of thousands of debt-ridden students and grads will be affected because most of the student assistance flows through the Canada Student Loans program. Apparently, up to 820,000 student loan recipients who are still pounding the pavement to pay for their degree could end up paying off part of their debt with Aeroplan points.
Repaying $250 of debt would cost 35,000 points.
With this option, students would be able to pay off their loans more quickly – so they can go on to focus on saving for the next step in their lives. For the federal government, they benefit from collecting their outstanding debts at no additional cost to the taxpayers.
Currently, the only road block in the win/win deal for the government appears to be that the Higher Eds website needs to be fully translated into French. Once this happens, the two sides still need to negotiate an agreement, as there is currently no official deal in place. Employment and Social Development Canada would only say that it was exploring options with Higher Ed Points.
It will be up to the incoming Liberal Minister in charge to approve an official agreement.
According to government documents, the amount of student debt owing to the federal government has topped $16 billion. Yes, billion with a B.