Can Upromise Ease Parental Anxiety Over Tuition Bills?

Well, that's different. These days tuition ranks right up there with MySpace and lead paint in the pantheon of parental anxieties. Maybe that's why 8.5 million households have joined a loyalty program called Upromise that essentially refunds a portion of your spending into a 529 college-savings account. Since its 2001 launch it's gotten fantastic press, endorsements from the likes of former U.S. Senator Bill Bradley and the participation of corporate partners like McDonald's, GE and Exxon Mobil. Members get a 1% rebate from Citibank on their credit card spending. They can also earn rebates, typically up to 10%, from the program's 650 partners when they buy certain products or shop at certain stores. They can even earn extra cash filling out surveys. All told, Upromise says parents who start early can expect to earn $12,000 to $20,000 before their kid heads off to college. "There's no cost to this, there's no catch," says company President David Rochon. "We're just here to help you."

It's a heartwarming vision — all those big companies helping parents save for college! If only you didn't have to deal with that guy rummaging around in your cupboards. To earn all the rebates, you need to get the Upromise credit card, register your supermarket and drugstore club cards with a central database, and download a Web browser toolbar that monitors your online activity. Before you know it, Upromise is keeping tabs on your Twinkie addiction, your No Doz habit, your favorite shampoo and your credit card balance. It knows when you're planning a vacation or shopping for a loan. While credit card companies and club-card stores can track a portion of your spending and use the data for marketing purposes, Upromise's ability to capture a detailed "360-degree view" of an individual's shopping behavior is unprecedented. Unless you read the fine print and opt out, it shares information with program partners to create highly targeted marketing campaigns on their behalf. Upromise won't say how much it earns off its marketing division, but last year the entire Upromise enterprise made $31 million for its parent, student loan company Sallie Mae.

Fine. Just send Junior to Harvard already! But does it really pay to share so much information with Upromise? While some parents have earned thousands, that's a tough feat unless you shop almost exclusively with Upromise partners. In reality the average member has earned just $47 so far. That'll buy Junior a used textbook and a pack of Camels. And here's a twist that Upromise doesn't exactly broadcast: You don't have to direct your Upromise earnings into a college-savings plan. Members are free to request a check and spend the cash on anything they please.

Upromise notes that its data-collection practices are clearly outlined in its member agreement and says the marketing practice is just a sideline — the outfit's primary mission is to harness "the power of for-profit companies" to help families save money for college. Hasn't it encouraged millions of members to set up their first college-savings plan? "If they only save $40 but they start a 529 plan, we win and they win," says Rochon. He's so enthusiastic and convincing, you start feeling like a party pooper for thinking Upromise is just another marketing program dressed up in graduation robes. You might even invite him in for coffee if he comes knocking on a Sunday morning. But for $47 he doesn't get to peek in the cupboards. Even the neighbors would pay more than that.