The cost of graduate school is higher than ever, and many students leave medical, law or MBA programs with six figures of student loan debt. Even with the higher salary that comes with a graduate school degree, debt of this magnitude can be extremely difficult to pay back — especially if you get stuck with a high interest rate.
Fortunately, startup LeverEdge has appeared on the scene, seeking to negotiate affordable, low-rate student loans for graduate students. By leveraging the power of collective bargaining, co-founders Chris Abkarians and Nikhil Agarwal are getting the banks to compete for your business, instead of the other way around.
Here’s our LeverEdge review, looking at how it works and some of the pros and cons — specifically:
- What LeverEdge is and how it came to be
- What rates and terms you can expect
- How to join LeverEdge’s negotiation pool
- What to do if you’re an undergraduate student
- Downsides to using LeverEdge
- Finding an affordable student loan with LeverEdge
When they got accepted to Harvard Business School, Abkarians and Agarwal knew they’d have to borrow student loans to afford its high price tag. After seeing the massive amount of interest they and other students would have to pay on student loans, they looked for a way to bring those interest rates down.
“Nikhil and I started LeverEdge to access cheaper student loans for ourselves and our classmates,” Abkarians told Student Loan Hero. “We’re still customers of our own product.”
Ultimately, they discovered that bringing students together to negotiate with lenders led to better offers. Before enrolling at Harvard, Abkarians and Agarwal recruited over 700 business students at their own school, as well as students from Wharton, Stanford and others, to join their negotiation pool.
After speaking to a variety of lenders, they were able to negotiate lower rates on their student loan offers.
“LeverEdge is the first collective bargaining group for student loans,” Abkarians said. “Our mission is to help students minimize the cost of education, from the day they take out their first loan to the day they finish paying it off.”
In the end, over 400 of the 700 students borrowed a total of more than $25 million in student loans. LeverEdge reports having saved its members more than $3.3 million compared to federal loans, with the average student saving over $8,000 in interest compared to the federal rate.
Since that time, Abkarians and Agarwal have recruited more than 1,200 students to bargain for low-rate student loans for the fall 2019 semester. As they grow their numbers, the founders expect to get even better student loan deals for their members.
“LeverEdge is the ultimate team effort,” said Abkarians. “The more people involved, the greater our ability to negotiate lower rates. We’re committed to doing whatever we can to minimize the cost of student loans.”
LeverEdge vets student loan lenders before partnering with them to bring its members competitive rates and flexible terms. It partners with multiple lenders, but it has a special agreement with Laurel Road that offers a 0.4% rate reduction for LeverEdge members.
Rates will depend on what LeverEdge negotiates, but as an example, it reported the following rates and terms under its partnership with Laurel Road, as of Oct. 14, 2019:
|Term||Fixed rate APR||Variable rate APR|
|5 Year||4.23% – 6.94%||4.21% – 6.76%|
|7 Year||4.24% – 6.95%||4.25% – 6.81%|
|10 Year||4.53% – 6.97%||4.50% – 7.07%|
|15 Year||5.01% – 7.74%||4.75% – 7.33%|
|20 Year||5.66% – 8.38%||5.00% – 7.58%|
These APRs reflect a 0.25% rate cut for autopay, and the loans have no origination or application fees or prepayment penalties. Since in this case, these are Laurel Road student loans for graduate students, borrowers also get the following repayment options:
- Deferred repayment, in which you make no payments while you’re in school
- Fixed payments of $50 each month while you’re in school
- Interest-only payments while you’re in school
- Full repayment, or paying off the principal and interest payments right away
Remember that even though you have a grace period, you can choose to make payments while you’re still in school to cut down on the interest costs of your loan.
As of October 2019, LeverEdge was limited to graduate students attending MBA, law, medical, dental or pharmacy programs.
When you sign up, you’ll provide your name, email, school, expected graduation year and residency status (whether you’re a domestic or an international student).
You can also indicate your credit score, annual income (if any), cosigner status and the amount of loans you need, though this supplemental information is optional at the LeverEdge sign-up stage.
As with any other private loan, you’ll need a certain level of creditworthiness (or a cosigner) to meet a lender’s underwriting requirements.
After you sign up, the LeverEdge team will get lenders to compete for your business. They collect proposals, analyze the data and select the loan with the best value for their members. While LeverEdge will send you the best value, you’re not obligated to accept it.
“We are a student-first initiative,” said Abkarians. “Through LeverEdge, students get loans at interest rates lower than they could get by themselves. We don’t charge students for anything, and we don’t obligate them to take the loan we negotiate.”
While LeverEdge is only available for graduate students at this time, Abkarians says they plan to start including undergraduates within the year.
“We want to expand LeverEdge to undergraduate students this year, but carefully,” he said. “Federal programs offer much lower rates for undergraduate students than private markets typically offer. But there are still many people who hit federal lending caps and fill the gap with private loans. We want to target those loans taken above federal caps and see if we can reduce rates for students and parents.”
For now, your best bet for finding a low-rate student loan for your undergraduate education is to borrow from the Department of Education. If you need additional funds, you can shop around, focusing on some of our favorite private student loan lenders.
Since LeverEdge doesn’t require any commitment from students who sign up, it’s worth joining its free student loan bargaining group. You might get a competitive student loan offer that lets you save a bundle in interest.
But before committing to your LeverEdge loan, it’s important to compare other possibilities to make sure you’re getting the best deal for you. Many private lenders offer instant rate quotes online, so you can see what rates you pre-qualify for with no commitment. You can also use LeverEdge’s student loan comparison calculator to weigh your options.
Look into federal student loans, as well, since they tend to come with low rates and flexible repayment terms, and unlike LeverEdge’s private loans, they don’t require a cosigner.
Also, federal student loans are eligible for certain benefits, such as income-driven repayment and Public Service Loan Forgiveness, whereas private student loans are not. If you think you might have trouble with repayment, even at LeverEdge’s negotiated rates, then consider sticking to federal loans.
However, if you’re confident in your ability to repay your debt on time, a low-interest private student loan could be the right choice — and LeverEdge could help you find a competitive offer.
LeverEdge offers an innovative approach to borrowing student loans. By bringing students together, LeverEdge is able to negotiate with lenders to bring you low rates.
As noted above, the savings can be significant. And if interest rates drop later in your repayment, you could always look for an even deeper discount by refinancing your student loan.