A Little Negotiation Could Save You Thousands on Your Student Loans

Every year lawyers and law students across the country are financially burdened by student loan debt. Alone, they have no leverage to negotiate interest rates. But together, they can achieve the seemingly impossible. That’s where Juno, a revolutionary student loan negotiation startup, comes in. They help law students and graduates use collective bargaining to force banks to compete for their loans and offer lower rates. Juno works with both current law students (on in-school loans), and law graduates (on refinancing their loans), to help them get exclusive rate discounts and the best deals on the market. The best part is, joining Juno is free and there is no obligation to take the deals they negotiate. Seriously.

We recently sat down with Tyler Day, a third-year student at Northwestern University Pritzker School of Law who joined Juno to finance his degree, to discuss some of the ways collective bargaining negotiations can work for law students and how it can change the financial outlook for law school graduates. For even more information, here’s a complete guide to law school student loans.

How did you find Juno?

This past February one of the founders, Chris Abkarians, sent me a LinkedIn message about a student loan negotiation startup that he co-founded. He explained that Juno serves to make banks come to students for loans and bid against each other, and I was really intrigued by the idea of negotiating bulk loan discounts for my classmates. I signed up with Juno, responded to his message, and asked to set up a call to talk about the idea. That initial call convinced me that this was something special and I ended up being one of the first hires at the company.

Group financing is probably something most prospective law students have never heard of. Please tell us about how it works.

Although it may sound complicated, the idea is quite simple. Juno gathers large groups of students and alumni who need help paying for school or refinancing their loans and gets lenders to compete for their business. When students and graduates can get organized and act as a group, they have stronger buying power. In the same way that avocados are cheaper when you buy them in bulk at Costco instead of your local grocery store, Juno members get lower rates when they are part of the group than if they were to apply for a loan themselves. 

Juno began negotiating on behalf of graduate students from law, MBA, and medical programs, but has now grown to cover undergraduate students and alumni looking to refinance as well. 

The Juno process can be simplified into three steps.

STEP 1: YOU SIGN UP. 

Sign up for free and tell Juno a little bit about yourself and the type of student loan you need. Juno helps both current students and alumni who are looking to refinance their student loans. It takes less than one minute and they don’t run a credit check. Once you’ve joined, encourage your friends to sign up as well. The larger the group grows, the more everyone can save.

Step 2: Juno runS a bid. 

Juno runs a bidding process between banks, credit unions, and other lenders. They compete for your collective business by offering exclusive discounts. Juno evaluates each offer based on a range of factors, with a heavy emphasis on how much money each bid will save each of their members, and negotiates an exclusive deal with the lender who offers the best rates and terms. By negotiating on behalf of a large group, they can get loan rates that are lower than any individual member could get.

Step 3: Members get the deal. 

Finally, Juno informs their members about the negotiated deal and shares a link through which members can take advantage of the negotiated rate (this is the stage they are at right now). They provide their members with a sophisticated and unbiased loan calculator that can help members decide which loan is best for them (i.e., the negotiated offer or any other offer they might come across) and provide resources to help them know the Juno deal is better or worse than federal loans for their unique situation.

What if you already have federal loans? Can Juno step in and help a law school graduate refinance?

Yes! Refinancing can be a great option to save money on interest. Some borrowers prefer to keep their federal loans and the protections they provide, but if you plan to refinance Juno can save you even more money with their exclusive discounts. 

Refinancing your student loan refers to the process of taking out a new loan to pay off one or more outstanding loans (including private and/or federal loans). Borrowers usually refinance in order to receive lower interest rates, change repayment terms, or to otherwise reduce their repayment amount.

Many law students choose to refinance their student loans after they graduate and start full-time work because they will get a significantly lower interest rate than they had in school. You normally need to have three paychecks from your new job in order to qualify.

Remember, there are trade offs. If you have taken out federal loans in the past, refinancing means that you will switch to a private loan and lose the protections of Income Driven Repayment Plans and Public Service Loan Forgiveness (there is no way to refinance and keep the federal protections).

Why did you decide to use this method to finance your law degree?

My wife and I are both attending graduate school at the same time. Before we started, we were very aware of the amount of student loan debt that we needed to take out and planned accordingly. To be honest, we knew that we could accept federal loans to cover our expenses but never really considered other options until I learned about Juno. 

When I realized that Juno could offer substantially lower interest rates than what the federal government was offering and I saw the amount of money that I could save in the student loan calculator, I started to investigate the pros and cons of private loans over federal loans. It became very clear that if I was going to take a private loan, Juno was definitely the best option — they vetted all the lenders in the market and chose the one who would offer the best rate, plus they negotiated an exclusive discount and benefits on top of that.

What are the differences between a federal loan and a private loan negotiated by Juno?

When choosing which type of loan to take, I had to decide whether the protections that federal loans offered were worth the extra cost in interest. Federal loans essentially provide a form of insurance — they offer protections such as Income Driven Repayment Plans and Public Service Loan Forgiveness, which will help you if you have a lower paying job or are unable to make your monthly payments on a standard repayment plan. However, these benefits mainly apply to students pursuing public interest careers and come at a big cost (a difference of 1% adds up to thousands of dollars over the life of the loan). For more information about how to make this decision, see here.

In the end, I felt comfortable taking the Juno loan going into my 3L year because I knew that I would be working at a law firm after graduation and I would very likely not need the federal government protections. The thousands of dollars saved on interest and fees will help me pay off my loans even faster. 

In summary, the choice of whether to accept (or keep) a federal or private loan is a personal decision with important financial consequences. To effectively make that decision you must first understand your options. That’s why we recommend all law students and alumni sign up with Juno to have access to the interest rate discount we negotiate. Then you can put your interest rate numbers in the calculator to understand your potential savings, costs, and tradeoffs.. Signing up is free (and always will be) and there is no obligation to take a loan. It simply helps you understand what your options are.

“We genuinely want you to make the best financial decision for you and your family and will never recommend that you take a loan that is not best for you.”

We see most often that the students who take the Juno deal are rising 3Ls with BigLaw job offers, students who are confident that they don’t want to go into public interest, and students who don’t need to borrow as much money to begin with. Graduates who are looking to refinance are also a huge part of members who take the deal.

Tell us a little bit about how Juno can put law students in better financial positions than if they had taken out federal loans.

The best way to visualize the difference that Juno can make over federal student loans is to use the student loan calculator to compare your options.

For example, assume that a student is about to enter their third year of law school and needs to borrow $60,000 for the semester. Under federal loans, the student would end up paying $24,529 in interest and fees over 10 years. With a loan negotiated by Juno, an average student could save between $5,000-$10,000 depending on their credit score and if they decide to take a fixed or variable rate loan. The savings are even more dramatic if you choose to refinance with Juno after you graduate (if you already have a private loan, that decision is a no-brainer) or if you use a Juno negotiated loan for all three years of law school. For more information about fixed v. variable rates, and how to know which one is right for you, see here.

Most law students graduate with more than six figures of debt. How is Juno helping you better manage your debt load?

My favorite part about Juno is that they are an initiative started by students and for students — everyone on the team really wants you to make the best decision for your financial situation. The first step is knowing what your options are.

“I believe that every law student could benefit from running the numbers on their law school education.” 

Too often students shy away from researching their options and fail to make the best decision for their financial future. Whether it is before you choose which school to attend, while you are in school, or after you graduate, it is empowering to know exactly what things cost and how you can save money. 

To be honest, Juno isn’t for everyone. If you are going into a public interest law career federal loans are probably a better choice. However, if you plan to work at a law firm after graduation, believe that you will not qualify for federal benefits after graduation, or simply want to pay as little money as possible, you can save thousands of dollars and pay off your loans quicker with a lower rate from Juno.

How has COVID-19 affected the student loan market?

The COVID-19 global pandemic has caused federal student loan interest rates to fall to their lowest rates in years. The good news is that private student loans, and by extension the lower rate that you can get via Juno, are also at historic lows. 

There are benefits to federal student loans, such as the federal government’s freeze on federal student loan interest through December 31, 2020, that are important to consider. For example, it is probably best to wait to refinance your federal student loans until after the freeze expires. However, the effects of COVID-19 have also impacted private student loans lenders — many of which offered forbearance during the pandemic. Juno negotiates with lenders to maximize these benefits as well.

Is there anything else that you think is important for law students to know when it comes to financing their degrees?

Know that the first step is to always try and limit how much money you need to borrow. Consider the financial aid package that your law school offers (including scholarship money) before accepting. Once you are in school, always stay on the lookout for scholarships from your school, employers, interest groups, etc. Juno compiles a list of law school scholarships that you can check out regularly.

“Don’t be afraid to ask for more free money.” 

It’s important to note that Juno helps members in multiple ways. They vet lenders for those with good terms, they help you get the lowest rate possible, they push lenders to eliminate all fees (such as origination fees, application fees, and prepayment penalties), and they monitor lenders after you take your loan to make sure they uphold their end of the bargain. Federal loans in comparison have higher interest rates and have large origination fees (1.062% for the first $20,500 you borrow and 4.248% for everything after that). 

Remember that knowledge is power. Know your options so that you can be confident that you are making the best decision for your future.