Tuition manages your student loans and offers payment plans and strategies to minimize interest. Last fall, a new service debuted; the ability to send and receive gift cards for making loan payments.
Brawker is a site where users post bitcoins, at up to 20% markup, in exchange for goods. For example, I used Brawker to buy an Amazon wishlist at discount. Instead of receiving cash for bitcoins you receive items. It’s not limited to just Amazon. In addition to parking tickets and utility bills, Brawker set out to prove you can live entirely off bitcoins & Brawker for an entire month.
Combined these services are a killer app for paying student loans using Bitcoin. Through Brawker, I am able to post bitcoins in exchange for a Tuition.io gift card. I am able to sell my bitcoins at a 20% markup. Tuition limits gift cards to $500 and charges a 6% fee for credit card processing. It will cost me $441 to buy a $500 Tuition.io gift card.
$500 Gift Card + $30 (6% fee) = $530
$530 / 1.2 = $441.
$441 / $530
That’s a saving of 17%.
Actually Paying Student Loans Using Bitcoin
Paying student loans using Bitcoin is just five steps. It does not require any account. Gift cards can be sent using a credit card and only need the billing information and an email address for sender and recipient. Then, someone else buy you a gift card using their credit card. You’re paying student loans using bitcoins when you exchange your coins with that person for gift card, in turn paying your loan.
List an order on Brawker
Request a payment from your buyer or have the buyer send you a gift card directly from Tuition.io
Wait for the buyer to purchase and send your gift card.
Release the escrowed Bitcoins on Brawker.
Cash-in your gift card on Tuition.io
Is Paying Student Loans Using Bitcoin For You?
I can only test US banks/student loans. So I suppose this is US only for now. Sorry, my debt slavery is tied to the United States.
That point brings me to my next.
Tuition.io didn’t work for me. If another payment processor were to offer this service, I would be much happier. When I ran my test for this article, I used $5, and I did all of the transactions myself. Minus the Brawker exchange to save time, it is a proven service.
When I tried to cash in my gift card, I received an error about the servicing address. To be thorough, I did make an account. Listing that loan on Tuition.io gave an error explaining that the loan servicer was down and would likely be up in a few days. All of my other loans successfully transferred, but these are state & federal loan servicers – loaded automatically with my social security number. I don’t blame Tuition for that. I know Sallie Mae is a frigid bitch who has no soul. Delaying my article was just another opportunity for her to prove it. So I chose to write this even though I’m waiting for her to sort it out.
For whatever reason Tuition does not show a gift card in my account. I can only redeem it through the email link. Payments can be made through my account. I should be able to use it there. While I love the concept and initiative from Tuition.io the market is still ripe for competition. If the stability is even possible at all, my money is on the government agency side failing before the private sector counterpart. Likely, in a few days I will officially be paying student loans using bitcoins. In the meantime, I opened a ticket with support. I’m not worried. Now was just an inopportune time.
Tuition.io has offered a gift card service since last fall. They released it in time specifically for the holidays. I have no doubts the service works as the rest of my loans showed up fine. I just don’t have full account numbers at hand; my Sallie Mae papers are digital.
Legalities of Paying Student Loans Using Bitcoin
This process is perfectly legal. The IRS has a limit for gifts that a person can give each year, $14,000. There is no limit to receiving gifts.
To me, and maybe some of the other $1T worth of student loan debtors out there this is like the point of a spear for Bitcoin against a banking industry that was fouled before we were ever born. Now I don’t have to wait for Bitcoin to become deflationary to see an immediate gain. Paying student loans using Bitcoin, when Tuition works, means paying an extra 17% towards student loans each month for free. It doesn’t even require holding bitcoins, buy them on Coinbase or Circle the day of the transaction. Finally, I can use the interest I generate on Bitcoin to outpace the interest of failed monetary policies and inflationary currencies. And I don’t even have to mine.
What do you think? Comment Below
Images from Brawker, Tuition and Shutterstock.