Law Students Waste Hundreds Of Millions On Student Loans Each Year
A brave new company negotiates student loans, enticing lenders to reduce rates. Signing up is free and there’s no obligation to take the negotiated deal. The result? More affordable education for more people.
Average student debt post-law school graduation is well above $100K. Lending is highly fragmented and rates are not transparent for students. There are too many options and too few sources of reliable advice. Alone, students have no leverage to negotiate rates. But together, they can force lenders to compete for their debt and offer lower rates.
This means that for many people, private loans can be a better deal than higher-priced federal loans.
The Solution: Power in Numbers
The bigger the group, the lower the rates. Last year, the average loan of the over 700-member LeverEdge negotiating team was $60,000. Banks competed for the account; LeverEdge successfully negotiated a fixed rate of 5.2 percent with no origination fee (vs. the federal rate — up to 7.6 percent with a four percent plus origination fee). The result?
The average student saved over $8,000. The LeverEdge team helped students get loans totaling over $25M at low interest rates. Students saved more than $3.3M compared to federal options.
The AHA Moment
LeverEdge founders Nikhil Agarwal, HBS ’20 and Chris Abkarians, HBS ’20 faced $218,000 in student debt upon their acceptance to Harvard Business School. Frustrated by the high loan rates and lack of options, they created a Facebook group to see if other MBA students wanted to band together to negotiate for better loan rates. They created an amortization calculator in a Microsoft Excel spreadsheet so that students could compare federal and private loans.
Agarwal and Abkarians worked hard to get better deals for group members. “We both had full-time jobs,” says Agarwal, who was working as an engineer for Boeing. “But we made calls, walked into banks, interviewed lenders, and learned how to negotiate with confidence to get better deals for our members.”
“Students know so little about financing their education,” says Abkarians, a manager at Netflix, noting the irony that many of these students in business and law schools would end up making careers out of negotiating. “They accept whatever terms the banks offer. It’s their money and their future. It’s time students took back power and control over their financial futures.”
At first, Agarwal and Abkarians approached banks with a small number of members. The terms lenders offered were not impressive. But as the number of members grew, the team had more power in the negotiation process. Seven hundred plus students from Harvard, Wharton, Stanford, Dartmouth Tuck, Northwestern Kellogg, Berkeley Haas, Chicago Booth, and others, jumped in. The lenders made better offers.
This model works.
How are lawyers wasting money?
According to Law School Transparency, over 6,700 graduates landed Biglaw jobs last year. These graduates, and others who follow their path, are often well positioned to benefit from private lenders’ rates, yet rarely do so.
The average JD student is requesting a $60K loan through LeverEdge today and would save ~$8,000 vs. federal loan options, using the most recent deal they negotiated. Let’s do the math: 6,700 students times $8,000 is $56M in wasted interest and fees per academic year, or $167M wasted by graduation.
From MBA to JD
LeverEdge just expanded its reach to cover law schools. Students who are applying to law school, are currently attending, or have already graduated and are hoping to benefit from refinancing can join LeverEdge and save a significant amount on interest and fees.
Over a hundred JD students have already signed up from Harvard, Stanford, Chicago, U Penn, NYU, Columbia, Berkeley, Cornell, and Georgetown, and negotiations are in progress. Along with MBA students, the total group is up to $200M in purchasing power, representing a change in buying dynamics for the private student lending industry.
The moral of the story: Power in numbers
Why not choose a federal loan? Private loans can be a better deal than higher-priced federal loans, especially for students expecting to enter private practice. Federal loans have options like income-based repayment plans and public service loan forgiveness. However, if you know you are not going to use those options, LeverEdge can negotiate a much more affordable loan option from private lenders.
How does it work?
Join the LeverEdge negotiating group for free to refinance existing student loans or get a new loan for law school.
Lenders compete by submitting proposed loan terms for the group. The LeverEdge team chooses the lender who offers the best deal.
Students apply directly to the lender via our unique link to get the negotiated interest rates and terms!
It is free to join. No obligation to take the negotiated deal. Click here: https://leveredge.org/above-the-law
LeverEdge gets students lower loan rates than they could ever get on their own. We are on a mission to increase access to and reduce the financial burden of higher education.
