Making Change by Saving Change

ChangEd, a Chicago startup co-founded by a UIC Business graduate, hopes to transform our relationship with student loans.  Nick Sky ’13, took the time to talk with the UIC Business Blog about ChangEd’s founding, mission, and the role UIC Business played in making the concept behind ChangEd a reality.

Sky and his brother started formulating the business plan for ChangEd in mid-2016 when his brother realized that the balance on his own student loans was not falling as fast as he would have liked, and how much difference even small additional payments would make.  Sky and his co-founders ran through some numbers, asking friends to share their financial documents.  Examining bank statements, the co-founders realized that by rounding up purchases to the nearest dollar and using this “spare change,” to make a payment on their loans, people on average could be paying off an additional 30 to 50 dollars a month. This became the basis of the ChangEd concept.

“You have to pay your bills, you have to buy gas, you have to live your life and spend money, so what we want to do is in the background help you automate a smart financial decision while your natural spending occurs,” Sky says.

The team developed a product, the ChangEd app, and launched a beta test in January 2017. Then in March, without warning, Apple featured ChangEd on their list of “new apps we love.”

“It came out of nowhere. We got an email that night from a colleague congratulating us on the App Store feature,” Sky remembers. With the publicity, the ChangEd app received a significant number of downloads and motivated the team to make improvements in response to user feedback.

From this experience, Sky recommends that aspiring entrepreneurs be not afraid of putting out a product that is not yet perfect. Customers will accept something even if it’s not flawless if it helps them in the end.  He found that real user feedback was invaluable while making adjustments.

So, how does it work? Users with student loans sign up, add a few pieces of personal information including their bank account, and link their student loan accounts to the app.  ChangEd then uses an application programming interface (API) that communicates with financial institutions without storing any sensitive personal information.  After signing up, ChangEd begins monitoring users’ bank transactions, rounding up to the next dollar, and transferring the spare change to an FDIC-insured account. Every time the account balance reaches 100 dollars, payment is automated to the users’ student loan servicers. The company has now developed relationships with over 90 percent of student loan servicers in the U.S. and surpassed $100,000 in loan payments.

Next up for ChangEd is building out a feature that would allow users to contribute their spare change to help pay off a friend’s and/or family member’s loan. The company is also pursuing expanded partnerships with area universities that would integrate financial education into the process of taking out loans.

Sky credits UIC Business, and specifically the entrepreneurship major, with introducing him to the startup community in Chicago.

Sky says, “the entrepreneurship program is fantastic because the campus is in the middle of a city that is becoming a tech hub. And just being connected with UIC and having access to UIC’s relationship with 1871 [the Chicago tech incubator out of the Merchandise Mart] or other organizations that allow you to dip your feet into the startup world or into the small business or consulting world is one of the biggest benefits of UIC Business.”

The ChangEd co-founder also feels supported by the UIC Business community after graduation, benefitting from ongoing personal connections with faculty and the alumni community.

“The (UIC Business) community is definitely behind the alumni and supportive of us,” Sky observes.  Reflecting on his time at UIC Business, Sky emphasizes the number of connections available to students in many classes and other college programming and the value in taking advantage of those opportunities. While he knows fear can hold students back from reaching out to executives or experts, his advice is to take the initiative.

“Take advantage of all the connections that UIC Business has to the startup community in Chicago. Whether that’s asking your professor to connect you with a founder that’s an alumnus or to give you advice,” Sky says. In that spirit, Sky offers his time to UIC Business students who want to share their stories or ask advice, encouraging current students to be in touch with him and the ChangeEd team.