Raging Against the Machine, While Paying Down Your Student Loan Debt

Or, ‘Discovering the Existence of Student Loan Rebates’

A few months ago, for totally normal, non-insane reasons, I was conducting research into my credit card benefits and found a treasure trove: A “price rewind” on items that have become cheaper since I purchased them; damage and theft protection; a rather morbid feature euphemistically described as accident insurance. But buried somewhere in the mass of benefit and credit card points-related materials was the big discovery: something called a “student loan rebate.”

I’m a bunch of years out of college and have less student loan debt than some of my friends, especially those who’ve gone on to medical, law, or business school. But the amount I have is still enough to stir feelings of dread in the pit of my stomach. So anything with the words “student” and “loan” and “rebate” in the title tends to wet my whistle.

It took a bit of reading, head-scratching and phone-calling to figure out the ins and outs of this little known feature. But here’s the short story version: it turns out that my credit card rewards can be used for more than succumbing to temptation and buying that hand-woven hyacinth laundry basket I’ve been coveting. These reward points can be applied to my remaining student loan debt.

My card is managed by Citibank, but I’ve learned that a number of companies offer some version of the same thing. The most common practice is to offer something like a $100 rebate for every 10,000 points spent. Some cards might pay out only specific denominations (i.e. you can’t necessarily claim a $145 rebate, only $100 or $250 or whatever they allow), and not all student loan servicers accept payments from third parties. Even more fun, some servicers have very specific parameters dictating exactly how these third-party payments must be made. The devil, as always, is in the details, but here the devil is more of a minion than a Beelzebub.

So, now that I’ve discovered this whole thing, am I a fully liberated, debt-free woman? Not quite, or not yet. See, like you, I used to think that credit card points were best used toward Pomegranate Noire Deluxe Candles, Totoro-themed wall hooks, or trips to see my best friend who insists on moving to some new wild/rural/unbelievably-expensive-to-get-to locale every couple months as if to spite me. What I mean is that there is something…nice about points being somewhat frivolous. It’s taken me a while to come to terms with spending them on something more responsible.

But now I think I’ve come to the right conclusion. Which is that I should use the fruits of my careful credit card labor (all that fastidious tracking of monthly usage and payments) to further reduce my debt.

And there has been an unanticipated positive outcome: it all feels a bit like retribution. I’ve never been entirely comfortable with the credit card system, predicated as it is on folks spending money they don’t have. That I am encouraged to carry debt over into my next billing cycle in order to “build my credit history” has always felt like straight-up baloney. So cashing in on this rebate feels like the personal finance dork’s way of sticking it to the man. I might not own this avant-garde dish rack, but I have the consolation of feeling like a rebel.

Y.N. Aleksandrovna is a writer living in New York.

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