See How You Can Get Free Money For College

There is a no risk, pain free way to save money for college that most families are not aware of called Upromise.  Upromise is an easy to use rewards program that families can sign up for to receive money back on purchases they make at participating retailers and service providers.  These savings can be on top of an individual’s existing credit card reward program, or it can be magnified when the participant signs up for a Upromise credit card.  Even though Upromise is nothing more than a multifaceted rewards program, it is unlike a lot of its peers in that the sole focus for the rewards is making college savings easy.

Background: Upromise is a subsidiary of Sallie Mae, the student loan behemoth.  Over its short history, Upromise has put together one of the largest marketing service coalitions in the U.S with over 11 million members and has provided over $500 million in member awards.  Along with Sallie Mae and one of Sallie Mae’s other subsidiaries, Upromise Investment Inc., they have set up a network that allows people to electronically link a robust rewards program to their student loans or  529 plan.   There is a caveat surrounding the directly linked programs, as they only work for Sallie Mae administered loans or a 529 plan that is being administered by Upromise Investment Inc.  While a closed network like this may seem too small in scope to be useful, you should keep in mind that Sallie Mae’s student loan portfolio is in the neighborhood of $188 billion and Upromise Investments administers 20 separate 529 plans in 11 different states, so it is one of the largest 529 administrators in the country.

How to Sign Up:  In order to take advantage of the Upromise benefits, you need to go to the website and set up an account at  Once you have established an account, all you need to do is link your existing debit and credit cards using their website.  If the card is accepted by Upromise, you simply need to use the linked up card in combination with any purchase that you make with a participating retailer or service provider.  If you get a Upromise credit card through Bank of America, your credit card will automatically be linked to your preexisting Upromise account.

Building Rewards: Trying to understand how to maximize the benefits of any rewards program can be a daunting task, so here is my take on the Upromise value proposition: 

  • Out of these 3 programs, the restaurant rewards offer the biggest opportunity to accumulate cash.
  • The end result will be additional savings through purchases you would have made anyway.
  • Because the currency used in the rewards program is cash and not some incomprehensible point system, the payoffs are simple to understand and don’t require you to shop from a rewards catalog filled with stuff you don’t need or want.
  • This feature gives other family members the ability to contribute a specified percentage of their savings towards a single or multiple beneficiaries.

Cashing-In Rewards: Unlike your catalog style credit card reward programs, the Upromise reward system is simple and straight forward.  Participants have four easy ways to cash in their accumulated rewards.

  • Student Loan – The program allows you to link up and apply your accumulated rewards towards a Sallie Mae or Bank of North Dakota serviced student loan.
  • 529 Contributions – Your rewards can automatically be contributed to your 529 if your plan is one of its 20 affiliate administered plans. 1
  • Gifts – If you have listed beneficiaries with Upromise accounts, you can gift your rewards over to their Upromise account. 2

1. If you want to contribute to non-Upromise affiliated plan you will need to pull rewards out as cash or manually rollover the Upromise 529 assets as they accumulate.

2. Rewards given to other individuals do not fall outside of the gift tax system, so you will need to coordinate your transfers with any other gifting strategies that you are currently implementing.

Analysis: When you are able to combine the power of the regular Upromise rewards program with the additional savings through the Upromise credit card, this appears to be one of the best reward programs available to the average consumer. Consider that the maximum savings rate I found to be achievable was 18% by using the 10% Upromise diner’s credit card at a restaurant offering an 8% savings rate.  From the perspective of a credit card rewards program, 18% back is a great deal.  In the final analysis, a family putting $20,000 on a Upromise credit card can expect to save anywhere between $150 to $800 per year.

Conclusion: In summary, Upromise offers a tremendous value to families trying to save for college, because it is a no risk proposition that creates savings without cutting into a family’s budget. However, it is highly unlikely that the average family would ever be able to fully fund their child’s college education using only the savings generated from Upromise purchases.  For example, if you are able to save $10,000 by eating out that means you spent $55,000 on dinners!  Even though Upromise has a robust number of ways that a family can accumulate savings, it isn’t the final solution for funding your child’s education.  As a result, parents should only think of Upromise as a high quality rewards program that can provide a supplement to their core college savings program.

About the author

Investor Solutions, Inc.

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