Earn Frequent Flyer Miles for Refinancing Your Student Loans? You Bet

Get a lower rate plus miles and get flying.

It used to be that rewards points and frequent flyer miles were primarily associated with credit cards. But those days went the way of the dinosaur long ago, and one of the most recent examples of that fact comes in the form of the new partnership between JetBlue and SoFi, a direct lender best known for student loan refinancing.

Members of JetBlue’s TrueBlue program can now earn one TrueBlue point for every $2 of student loan debt refinanced with SoFi. The offer, which caps at 50,000 points and is only available to new SoFi customers, was described by JetBlue as a first of its kind in the airline industry.

While airlines have long been creatively partnering with mortgage lenders, online retailers and others, the student loan market has remained largely untapped.

But with record levels of student loan debt, (the average 2016 graduate has about $37,172 in debt) and millennials putting off travel in some cases because of that debt, this partnership addresses a growing market opportunity.

“Members of the global legacy programs like United and American have been able to earn points for mortgages and other loans for decades, but their rosters of partners do not specifically include an education loan specialist like SoFi,” said Kate Hogenson, who designed loyalty programs for United Airlines and now works as a strategic loyalty consultant at Kobie Marketing. “Airlines have flirted with college and young adult programs in years past, but they’ve been shuttered; United closed down their College Plus program in 2010.”

For its part, JetBlue has been dipping its toe in the financial product space more and more over the past year, beginning with offering points for personal loans through Best Egg. And when looking at the demographics of their customers, moving into the student loan arena made sense, said JetBlue’s Director of Loyalty, Scott Resnick.

“We see this as a great opportunity for customers who have student loans to refinance them while doing something that benefits them in another part of their life,” said Resnick. “Any time there’s an opportunity for customers to earn points doing something they would be doing otherwise in life, there’s natural tendency to look for partnerships there.”

The other part of your life that benefits of course, is your travel habit. Here’s what you need to know about the offer.

The Fine Print

The program doesn’t have a lot of hidden details. There are no blackout dates for using the miles earned through the refinancing offer, and no expiration date either.

In addition, there’s no application or origination fee for refinancing through SoFi, officials said.

“You can apply for free in fewer than 20 minutes,” said SoFi’s Catesby Perrin, vice-president of business development. “Our borrowers save an average of $22,000 over the life of their loan.”

SoFi offers various refinancing options, including both fixed and variable rate interest and loan terms of five, seven, 10, 15 and 20 years.

The Drawbacks

There seem to be few downsides to the JetBlue offer. But there are some basic considerations to keep in mind.

“JetBlue’s route system is limited to the U.S., the Caribbean, and select destinations in Latin America,” said Hogenson. “You have to be in a major JetBlue city for this to make sense.”

Hogenson suggested visiting JetBlue’s website and researching the number of points needed to travel to a city you’re interested in visiting, to help determine whether this offer makes sense for you. And while perusing the site, spend some time reviewing the route you may have to travel on JetBlue to get to where you want to go.

“To get from New York to Las Vegas, you might find yourself routed through Fort Lauderdale,” she said.

Should You Refinance Student Loan Debt in Pursuit of Frequent Flyer Miles?

Obviously, you should never make student loan refinancing decisions based solely on earning frequent flyer miles. A serious financial decision like this should still be approached with the same amount of research, caution and common sense you would use otherwise.

“You should make your refinancing decision based on saving the most money, meaning finding the lowest interest rate,” said Brandon Yahn, founder of the website Student Loans Guy. “Additional perks like miles are great, but shouldn’t be the driving factor in which lender you ultimately choose, unless all else is equal.”

Put another way, student borrowers should look beyond the sparkle of free flights and focus on the student loan consolidation product itself, said Hogenson.

Qualifying for Refinancing

One last important point to keep in mind, in order to qualify for any refinancing program, it’s critical that you have a good credit score, have a history of paying your bills on time and have a solid, steady income. If you don’t know where your credit stands, you can get your two free credit scores on Credit.com.

Image: RobertoDavid

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