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- More than half of students in the US use loans to pay for their tuition and other higher education costs.
- Total national student loan debt tops $1.4 trillion and students are feeling the pressure.
- ChangEd is a student loan payment app that rounds up your credit and debit card purchases and collects the spare change to put toward loan payments.
- With just a little spare change every day, you can save a surprisingly large amount of interest costs and time off your repayment term.
The cost of higher education has only climbed over the years, so it's no surprise that millions of people turn to student loans to finance at least a portion of that cost. According to the Federal Reserve, 53% of those who completed at least a bachelor's degree acquired at least some debt in the process and the mean level of student debt in 2016 was $32,731 while the median was $17,000.
This burden is so daunting and stressful that recent surveys found people preferred loan repayments as gifts over material items during the holiday season. When many people are still paying back student loans well into their 40s and 50s, you have to wonder whether there are any ways to speed up the process and make it just a little easier.
ChangEd is a new app that says it can take six years off your repayment term and save you $14,000 in interest costs — all with a bit of spare change.
If you think this sounds too good to be true, keep reading to learn more about ChangEd's approach to relieving your student loan debts.
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ChangEd was founded by a pair of brothers who saw a better way to pay back their student loans.
Like millions of other borrowers in the US, founders Dan Stelmach and Nick Sky were saddled with their own student debts. Looking at the spare change accumulating in their pockets, the brothers estimated that it added up to about $50 a month. Not making use of it was a missed opportunity.
After testing beta versions with friends, they launched their student loan payment app ChangEd in April 2017 and also took their idea to a January 2018 episode of "Shark Tank," where they received an offer from Mark Cuban.
Chipping away at your student loans is easier with ChangEd's model of small, automated payments. Here's how it works.
Similar to the app Acorns, ChangEd rounds up your everyday purchases to the nearest dollar. Instead of investing this extra cash, it deposits the change into an FDIC-insured ChangEd account.
Once your account reaches $100, the app automatically sends it to the loan servicer. The company says it currently works with most loan servicers, including Great Lakes, FedLoan, Navient, and Nelnet.
The app has a well-designed dashboard to help you track your progress.
You can visualize the payments you've already made, how much you're saving in interest, and how much sooner you'll pay off your loan.
See the rest of the story at Business Insider