New phone app uses spare pocket change to pay off student loans
Add up the pennies to start paying off the dollars.
A new phone app allows users to put their spare change towards paying off their student loans.
The total national student loan debt has topped $1.4 trillion, and many people are still paying off their loans well into their 40s and 50s.
But the ChangEd app says it can take six years off their repayment term and save them up to $14,000 in interest, all just by using their spare change.
ChangEd works by linking the user’s student loans and bank account, analyzing their spending habits and then setting aside their spare change.
So, for example, if the user spent $2.50 on a coffee, the app rounds that up to $3 and puts $0.50 towards the loan repayment.
The extra change is transferred into an FDIC-insured account, and once the account reaches $100, the app automatically submits a payment towards the student loan.
The dashboard shows the user how much change they have saved each month and how much is applied to their loans. The app also calculates how much each payment saves you in interest over time and how early you will pay off your loans.
ChangEd was designed by Daniel Stelmach and Nick Skrzyniarz, who were both saddled with their own student debts totaling $120,000 between them.
They calculated that they were each accumulating up to $50 a month in spare change and realized this could be put towards paying off their debts.
After testing beta versions with friends and launching in April last year, the pair took their idea to reality TV show Shark Tank last month, where they received an offer from Mark Cuban.
The app, which is free but charges a $1 monthly fee, is currently only available for iOS/iPhone users, but Skrzyniarz says they plan to add Android compatibility by the end of the year.
And he and Stelmach are also working on a “Friends and Family” feature that lets the user’s loved ones pitch in and help you with payments.