Is paying tuition, student loan with Aeroplan points a good deal?


When I read this week in the Toronto Star that you can now pay down an Ontario student loan (OSAP) using Aeroplan points, my first reaction was that no students I know can afford to travel frequently enough to rack up a slew of airline points.

But after reading further, I discovered that grandparents, parents and other generous benefactors can also convert points into cash and direct the money to the student of their choice so I was curious enough to find out more about how the program works.

The service is operated online by In addition to paying down OSAP and Alberta student loans, Aeroplan points can be used to pay tuition at participating universities and colleges including York, Western, Ryerson, Humber College, Georgian College and numerous others across the country.

The site even includes a draft email for students who would like to solicit Aeroplan points from friends and family to help pay their school expenses. One plus seems to be there is no charge to donate points, whereas if you simply want to transfer Aeroplan points between accounts there is a charge of $.02 per mile.

But at an exchange rate of 35,000 Aeroplan points for $250, you’ll need an awful lot of points to make a dent in annual tuition of $5,000 or student loans of $35,000 or more for a four-year degree.

Furthermore, when you do the math, it becomes apparent that it makes more sense to give your child or grandchild a cheque. That’s because spending 35,000 Aeroplan points for a credit of only $250 (which works out to a reward of only .007 or 7/10 of a cent per mile) is not the best way to get good value for your hard-earned loyalty points.

Calculations on Flightfox, illustrate that depending on the cost of the ticket and the distance you are travelling, you can realize anything from 1.4 cents per mile on cheap round–trip flights within Canada and the Continental U.S.A. to 1.84 cents per mile on an international economy flight. Pricey international business class flights that cost over $6,000 (or 135,000 Aeroplan) miles can result in a return on your investment of about 4.53 cents per mile.

According to Suzanne Tyson, founder of Higher Ed Points who was quoted in the Toronto Star article, already some $120,000 in tuition and student loan offsets have been converted through this plan. She also noted that one Toronto employer cashed in his Aeroplan points and put them toward summer course tuition for three students.


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