Student loans: $1.4 Trillion owed, the average loan balance increasing exponentially, and the weight of looming payments that are burdensome even to the intrepid at heart.
Is there any way to be strategic? To get ahead? To make a dent in what feels like impenetrable steel?
Yes there is, and I sat down with a man on a mission to help people do just that. In this exclusive interview, we will chat about ChangEd and how they are helping people feel changed regarding their student loans.
Bring it on.
(Imagine a quiet, thoughtful room. Two comfy chairs with their occupants chatting. The room is filled with books, a table with two cups of steaming tea, and art decor that accentuates the following conversation in a fitting manner.)
Joe: A fun question to kick it off, tell us a little about yourself. And while we’re at it, what’s your favorite food?
Nick: My name is Nick Sky and I was born and raised in Chicago. I am a big sports fan especially when it comes to my Chicago Bulls. Funny you ask about food…we live in Chicago….what’s not to love when it comes to food? To be specific I would probably have to say it doesn’t matter but I am one of those guys that need a side of ranch with everything I eat. When I’m not watching a bulls game or drizzling ranch on a slice of pizza I am working on ChangEd!
Joe: So what is ChangEd and what big problem are you trying to solve?
Nick: My brother Dan and I are the founders of ChangEd. Dan was sitting at his job one day thinking about how stuck he felt with his student loans. He thought in his head “Man!!! Something has to change.” Then it hit, change! Like spare change! He called me to tell me his idea. We did hours of research and saw how many people were affected by student loans. 44 million to be exact. Student debt is constantly on national news, published in major papers, blogged about and STRESSED about.
ChangEd is an iOS app that helps student loan borrowers pay down their debt more effectively. ChangEd analyzes a user's daily spending and rounds up all of their transactions to the next dollar. All the spare change accumulates and we automate additional payments to a user's student loan debt.
After we crunched numbers, making additional principal payment onto student loans is the most effective way to pay less in interest and get out of debt sooner. This is what we’re helping borrowers do. We feel like the extra $30-$50/mo in spare change you accumulate won’t be missed but will make a huge impact on your loan repayment. We want users to get rid of that $300, $500, or even $1,000 monthly payment and use that money for something more productive.
On top of that, budgeting is one of the most difficult things to manage in life especially when you'r fresh out of college. Taking out an extra $50 dollars a month can be difficult at times when you have other expenses such as rent and a life. We took many of our friends’ and families’ bank statements just to see how much change one can accumulate and we found it to be anywhere from $30-$50 dollars a month. That little extra can go a long way. It can save a borrower thousands in interest, years off their loan, and ChangEd makes it easy.
The current iteration of ChangEd is very simple. We securely monitor user accounts and round up change for every transaction that posts on that account. We make withdrawals once change accumulates to at least $5 and stash that away in a member’s personal ChangEd account. Once that account reaches $100 (which is surprisingly easy to do) we send a payment to loan servicers specified. ChangEd members can monitor progress through our simple dashboard. We also will have features where you can link a spouse's or family member's account and see even more savings!
Joe: That’s awesome and no doubt can have a pretty powerful impact over time. What kind of results do you think this could have on users?
Nick: Based on our research, many people can save $30-$50/mo in spare change roundups. Adding this extra payment on to loans makes a huge difference. Some people can save upwards of $10,000 and take 5 years off of their repayment schedule.
The best part about what ChangEd is doing is making this automatic. Users will be making a smart financial decision without even thinking. Once you sign up, we take care of the budgeting, saving, and payment.
Joe: How can people start to use your app?
Nick: Soon people will be able to download it in the Apple app store and in the next few months in it will be available for Android devices too. We are currently in Beta with all of our awesome testers that signed up early.
Users then will log in with their online banking username and password through a secure and encrypted connection and add their student loan info and we take it from there. We send you updates on what’s happening but other than that we manage everything. Users, of course, have access to their accumulated change at all times.
While we’re in beta, people can sign up to be updated on a more public release here.
Joe: Tell us a little more about what many are calling, the “student loan bubble,” do you think that is a fair assessment?
Nick: I really do think there is a bubble. We are close to radical change just like what happened less than ten years ago with the mortgage crisis we had. This time around, people are realizing it and taking action. Student loans have exceeded almost every national debt metric except housing. Universities are forming stricter budgets, government leaders are pushing for new policies, and refinancing has become more popular than ever.
Now, I don’t believe that the “student loan bubble” will have the same effect as the “mortgage crisis” but the tipping point will be reached and it will have a drain on the economy. Student loan debt is already preventing loan holders from starting businesses, families and following their dreams.
Joe: Where do you see ChangEd accomplishing in say 1, 5, 10 years?
Nick: ChangEd is aligned to be a tool for every type of debt out there. We really plan on focusing on Student Loan debt in the beginning and then moving on to other types of debt. If we can show users that contributing your spare change from everyday purchases can make a huge impact on debt repayment, the same model can translate to credit card, auto, and even mortgage debt. Time will be the one to tell.
To learn more about ChangEd, check out their app in the Apple Store or here: https://www.gochanged.com/