Harvard Business Students Ease Loan Assistance

Two students from Harvard Business School have created a startup company to allow students to save money and easily pay off their loans. The company, LeverEdge, was established last summer by Chris Abkarians and Nikhil Agarwal after they were accepted into Harvard Business School, but had to figure out how to pay their tuition. 

“There were high interest rates, so we thought that creating a larger group would lower them,” Agarwal said. He and Abkarians reached out to other business school students, including those outside of Harvard, who were looking to negotiate better loans for their education. By fall of 2018, the pool of applicants had grown to about 700 people. 

The company’s first loan negotiation took place in the fall of 2018. The application process begins with an optional anonymous form, in which the client provides information (such as their credit score) that the bank will evaluate to determine a reasonable loan for them to pay. The other factors that are taken into consideration vary depending on the bank, but usually include a person’s profession. If the student declines to complete the form, they are still eligible for loan discounts, but the process takes slightly more work, as there is crucial information missing. 

“The expectation is that those people who are doctors or lawyers will make more money further down the road, so people are more likely to lend to them knowing they will easily be able to pay it back later on,” Agarwal said. 

Essentially, the banks evaluate the risk that the client won’t be able to pay back their loans, and adjust the interest rates accordingly. After the banks adjust the interest rates for the loans, LeverEdge notifies the applicants of the discount that is now available. 

Four hundred students chose to take their offers, and $25 million was taken out in total for the loans. The feedback from students was overwhelmingly positive. The company did most of the work for them, and the only part they had to complete was filling out a form. According to the company’s website, students saved over $3 million when they got loans with LeverEdge as opposed to receiving a federal loan. Once the students had filled out the form, LeverEdge brought the information to the banks and settled reasonable prices. 

Currently, two offers are available for students, depending on what their education plans are. The first offer is for students beginning or continuing school in 2019, and is identical to the one from fall 2018. However, it is slightly different, as given that last summer was the first time this process was done. Abkarians and Agarwal are more confident in the process this year, and have already gotten started. 

“Last year, we cut it very close to the due date, so we were in a time crunch. However, this year we’ve already started talking to the banks, and have set timelines so that everyone knows what they have to do and when they have to do it,” Agarwal said. “This ensures that everyone will get what they need.”  

The second payment plan is for students who are graduating. If the student gets a job, then they can come to LeverEdge, and the bank will reduce the interest rate on their loans based on their information. There is an excellent chance that the student will qualify for this, because with a job, they are more likely to pay back their loans. 

To find out more about Leveredge, visit the company’s official website at https://leveredge.org.