An app that allows students to nickel and dime their way out of debt has just paid off $1 million worth of student loans.
ChangEd is a mobile app that rounds up a user’s everyday purchases to the nearest dollar. For instance, if a person is buying a cup of coffee for $2.45 with the credit or debit card that is linked to the app, ChangEd will round the payment up to $3 and then squirrel away the extra $0.55 cents to an account insured by the FDIC.
When these small amounts of change eventually pile up to $100, the app then applies the money to the user’s student loan debt.
The Chicago-based startup was featured on Shark Tank and backed by Mark Cuban.
“These spare change roundups are having a powerful impact on the repayment path for our members,” said ChangEd CEO Nick Sky. “We’re helping give people years of their life back without having to think about it.”
According to the company’s website, the average $37,000 student loan can end up costing over $60,000 if the student sticks to making the minimum payments every month. With the help of the app, they can save up to $14,000 on their debt in interest costs by using the average amount of spare change from purchases. The app also claims that it can knock up to 6 years off of a student’s repayment term.
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