How Can I Reduce My MBA Loans?

MBA loans are a top source of funding for business school students, but how do you get the best deal and trim down your payments? MBA loan expert, Nikhil Agarwal, explains

In this Applicant Question, Nikhil Agarwal, co-founder of MBA loan negotiation community, Juno, tells you everything you need to know about securing the best deal on your funding.

For many people, investing in an MBA means taking on student loan debt. While student loans are considered ‘good debt,’ and allow students to pursue an advanced degree that will increase earning potential and job opportunities, there is no reason to pay exorbitant fees and interest rates.

Negotiating the cost of your MBA loans

With the right strategies, you can reduce the cost of your student loans and continue to build the life you want without the mental and financial burden of debt.

With undergraduate degrees, federal loans tend to be the most affordable option. For this reason, many MBA students immediately start looking into securing a Federal Grad PLUS loan.

However, these loans differ significantly from their undergraduate cousins. A Grad PLUS loan comes with a fixed interest rate, but interest begins to accrue as soon as the loan is disbursed and you will be charged an origination fee.

While you can borrow the full cost of attendance, keep in mind that you only want to borrow as much as necessary and not get in over your head with loans.

What many MBA students don’t realize is that they may be able to get lower rates and no origination fees from private lenders. That is why it is important to shop private lenders and try to secure a competitive rate.

The process of researching and negotiating loans can be intimidating and time-consuming. Programs like Juno can help simplify this process and offer additional leverage by using group buying power to negotiate with lenders.

Sometimes it can feel like the lenders have all the power, but Juno is working with MBA students and borrowers to take back some of that power. Lenders will compete for your business, so don’t underestimate what you can achieve through negotiating.

Nikhil Agarwal and his co-founder, Chris Abkarians

Reducing MBA loans post-graduation

Once you have completed your MBA, secured a job, and received a few pay stubs, it is time to consider refinancing your loans.

For lenders, an employed MBA graduate is considered a much lower risk than an unemployed MBA student, which can translate into lower interest rates. While you can go directly to the lender’s website to start negotiating refinancing options, Juno can help secure even better rates than are advertised. With a little leverage on your side, you won’t have to settle for the typical rate.

It is also important to think holistically about your finances and financial goals instead of focusing solely on paying down your MBA loans.

For example, you may want to establish a rainy day savings account, invest in your retirement, or purchase a home. You shouldn’t have to put all these financial goals on hold until you are completely free of student debt.

Pursuing these goals may mean that you have to hold on to your loans for a little longer, but the trade-off may be a happier, more fulfilling life.

Earning an MBA is a sound investment in your future. While it can feel stressful to take on student loans, there are ways to reduce overall costs and so that you take on less debt and are able to pursue other financial goals. Don’t be afraid to negotiate interest rates and take advantage of tools like Juno.

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