You can work really hard to put aside money from your paycheck to pay off your student loans, but you can also shop your way to student loan payments. You can do this by utilizing cash rebate programs that directly deposit the money you earn from purchase rebates into your student loan account on a quarterly basis. You can also use cash-back credit cards to save money on your purchases, and you can then put those savings toward extra student loan payments.
- Upromise and Rakuten are both websites that allow you to earn cash back while shopping, though only the former offers rewards for both online and in-person shopping.
- There are several credit cards available that have no annual fees and offer a couple different avenues for earning cash back on your purchases.
- Cash back is an effective way to save money on purchases you were already planning to make.
Two Websites That Pay
Here are two websites that allow you to earn cash back when you're shopping and use that money to help you pay your student loans.
Upromise: Shop Your Way to Loan Rebates
The website Upromise is known for helping parents save for college through shopping online and in-person at thousands of stores across the country, including grocery stores and restaurants. You are also able to earn rebates that are deposited quarterly as a payment on a Sallie Mae student loan or sent to you as a check, which you can use to pay off other student loans.
The following is an example of how the savings add up. Let's say you sign up for the Upromise dining program and go out twice in a month, spending $40 each time. You earn 8% of each purchase. Then you buy a pair of $60 shoes with a rebate of 10%. Between the dining and the shoes, you just earned $12.40 toward your student loans from purchases you were going to make anyway. This adds up to over $100 a year of free money that could be going toward your student loans.
Of course, if you spend more, you'll earn back more. In addition, you can get grocery savings on certain products, further increasing the money you can put toward your student loan payments.
Rakuten: Rebate Program
Rakuten is a rebate program that gives you a percentage off of online shopping, but the savings you earn are not deposited into a student loan account. However, you can still put the money you saved toward paying off your loans.
To get these rebates, just log in to your account when you want to shop. Then you click on the store of your choice. As long as you earn at least $5.01 during a three-month period, you will receive a payment.
This is a highly reputable site with a nearly 4 out of 5-star rating based on customer reviews and a B rating from the Better Business Bureau.
Three Credit Card Rewards Programs
There are also credit card programs without annual fees that go beyond giving cash back for your purchases. Some credit cards offer bonuses for shopping through their websites or bonus cash on top of your cash back earnings. For the sake of maintaining your credit score, only apply for the credit card you think will be best for you.
Out of all the rewards cards available on the current market, the Capital One Quicksilver credit card is the best card for cash back due to its low fees, low interest, and high rewards earning rate. Other excellent cash back cards for students include the following.
Bank of America's Cash Rewards Card
The Bank of America cash back cards offer up to 3% cash back on everyday purchases. The higher cash back rewards are generally offered on groceries, dining out, and travel. Certain cards offer additional flexibility and allow you to choose which category of purchases receive the highest cash back reward amount. How much could you earn? If you charge $1,500 a month in monthly expenses, you could earn over $600 per year at the highest reward level.
Chase Freedom Unlimited Card
With the Chase Freedom Unlimited Card, you earn 1.5% cash back on everything, in addition to 3% on certain everyday purchases like dining out and up to 5% on travel and gas purchases. Plus, you can get bonus rewards for hitting $500 in spending within the first three months of opening the account. In addition, the card carries no annual fee and offers a 0% interest rate on purchases and balance transfers. Accumulated cash rewards can be used toward future purchases, to pay balances, or can be directly deposited in most U.S. checking or savings accounts.
Citi Custom Cash Card
With the Citi Custom Cash Card, you earn 1% cash back on all of your purchases with a $200 cash back bonus after spending $750 within the first three months after opening the account. In addition, you can earn 5% back on an eligible spend category of your choosing on up to $500 in monthly expenditures.
What Are the Four Types of Student Loans Given Out by the Government?
Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans: direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.
- Direct subsidized loans are made to eligible undergraduate students who demonstrate a clear financial need.
- Direct unsubsidized loans are made to eligible undergraduate, graduate, and professional students, though eligibility isn't based on financial need.
- Direct PLUS loans are made to graduate or professional students as well as parents of dependent undergraduate students—eligibility also isn't based on financial need, but a credit check is required.
- Direct consolidation loans allow borrowers to combine all eligible federal student loans into a single loan with a sole loan servicer.
Do Student Loans Go Away After Seven Years?
Unless a borrower is part of the Public Service Loan Forgiveness (PSLF) Program, their student loans will not go away on their own after any length of time. In most cases, the only way to get rid of student debt is to pay it off.
What Happens if You Don't Pay Your Student Loans?
Not paying your student loans can have several consequences. Not only will interest continue to accrue over time, there may be further fees should your student loan debt be moved into collections. Additionally, failing to make payments can lower your credit score. And should you default on a federal student loan, the government can take your tax refund or up to 15% of your wages. You could also be sued, which is more common when failing to pay back a private loan.
The Bottom Line
Think of these rebate programs as a side gig to pay for your student loans. These programs can work to save you money as long as you don't go out of your way to make purchases you wouldn't normally make.