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Graduate Leverage in the News
To request an interview with or schedule a presentation by Graduate Leverage, please contact Daniel Thibeault at 888-350-8488 or danthibeault@graduateleverage.com.
When Selecting Your Student Loans, It Pays to Have Someone in Your Corner
Issue date: 12/11/06 Section: Viewpoints
By: Tali Barash (OF), Contributing Writer
Internship assignment on the expected ramifications of recent regulatory changes on student borrowers pays off for both EC student and company. Here, Tali shares some of what she learned with her fellow HBSers.
After spending my summer internship with Graduate Leverage (a free student debt advisory founded by Jeff Wanic '04, Andrew Solomon '04 and Dan Thibeault '04), I read with interest a recent article in Harvard University's student paper. The staff of the Crimson newspaper recently called for Harvard graduate financial aid offices to make some significant changes with regards to the loan and lender information that is communicated to students (See "Flirting with Financial Aid," http://www.thecrimson.com/article.aspx?ref=515386).
Specifically, The Crimson raised concern that Citibank is the only supplemental loan provider listed on many of the graduate programs' websites (HBS & HLS included). Citibank, through its contractual relationship with the University, benefits from "preferred lender" status that garners them the vast majority of private loan volume at Harvard's graduate schools. In exchange they provide submarket priced loans through a risk-sharing agreement with the university. But while Citibank may provide superior terms for some students (international students and students with derogatory credit) most students are disadvantaged due to the lack of relevant information about alternative funding sources that are actually more cost effective than a CitiAssist loan. In addition to The Crimson, other institutions have recently raised concerns with transparency between schools and lenders. Local Senator Edward Kennedy (D-MA) recently introduced the Student Loan Sunshine Act, which calls for both greater transparency and competition among lenders.
During my internship, I helped develop this information and focused specifically on the expected ramifications of recent regulatory changes on Graduate Leverage's (GL) student borrower base. Having assisted over 50,000 graduate students with loan selection totaling more than $2.5 billion since inception (including 97% of HBS '04s, '05s and 06s), GL prides itself as the first student loan intermediary, providing objective advice on both loan and lender selection.
Specifically, my research centered on two key legislative changes. The first change called for an overhaul of the federal Stafford loan program-replacing the previously variable-rate Stafford loan with one fixed at 6.8% (a 2% increase from a year ago). But even more pertinent to graduate students was another regulatory change that that now allows them to take a federal, Graduate PLUS loan (previously available only to parents of undergraduate students). PLUS loans have a fixed rate of 8.5 percent but many lenders offer incentives that can drastically reduce this rate. In fact, I found that HBS students who used GL's recommendation service to identify the most cost efficient PLUS offering save more that $3,000 prior to graduation (as compared to taking out a CitiAssist Private Loan). Those students who take both a Stafford and PLUS loan based on GL's recommendation save over $4,000 before they graduate (as compared to taking out a Direct Stafford Loan & CitiAssist Private Loan).
After returning to HBS this fall, it quickly hit home how little we really know about our student loans. I knew there had to be some systemic issue, and while reconnecting with Dan Thibeault he framed the issue succinctly. "The fundamental issue within the industry is one of agency. For-profit lenders will always seek to maximize profits, as they should. Schools however, while attempting to keep the students' best interests in mind, lack the analytical resources and flexibility required to secure borrowers the best possible deal. Our group has addressed this issue by operating as an intermediary, which is why we believe all schools should promote both lenders and student loan intermediaries as a resource for students. The cost of financing an MBA is equivalent to purchasing a condo or starting a retirement savings account, so of course I'd recommend people seek independent professional support." I would have to agree and further invite you to sign-up for a free recommendation on your next semester's loans, at Graduate Leverage's loan assessment portal https://www.graduateleverage.com/loanassessment.aspx
Show Them the Money
28 February 2006
By: Jeffrey Gangemi
Schools competing for top B-school applicants are sweetening the financial-aid pot to lure the best and brightest students
After three consecutive years of fewer applicants, top U.S. MBA programs are seeing a rise in the number of applications (see BW Online, 12/7/05, "First-Round Frenzy"). To maximize their yield, schools are increasingly wooing shining stars by beefing up their financial-aid offerings.
NEW INCENTIVES. Although admissions directors and applicants agree that academic fitness is key, some experts say financial aid should be more important for students. Two years at a top B-school costs upwards of $150,000, including living expenses. Average total debt for MBA grads who use Graduate Leverage, a Waltham (Mass.) debt management and consolidation service that served 20,000 students last year, was almost $90,000 (see BW Online, 1/27/05, "How to Bear Those B-School Bills").
"MBAs surprisingly pay very little attention to financial aid because they all think they're going to get out and make millions, but a down economy can change that quickly," says Dan Thibeault, co-founder and president of Graduate Leverage.
How to Bear those B-School Bills
27 January 2005
By: Francesca Di Meglio
It's best to start planning before you even apply. Oh, and be ready for the shock of returning to a frugal, undergrad lifestyle
Dan Thibeault, a second-year MBA student at Harvard Business School, talked about student loans during an impromptu discussion in one of his first-year classes -- and set off a firestorm of interest from his classmates. They wanted his advice on everything from finding the best interest rates to loan consolidation -- and with good reason. One of Thibeault's jobs before going back to school was at Goldman Sachs, where he dealt with student loans and other debt instruments.
Thibeault responded to his classmates in a big way. In 2003 he, along with other students, launched Graduate Leverage, a student loan consolidation and debt-management company in Cambridge, Mass., that this year will offer advice to about 5,000 MBAs and other graduate students.
GETTING PERSONAL: How To Pick A Student Loan Consolidator
1 June 2004
Dow Jones News Service
By Kaja Whitehouse
NEW YORK (Dow Jones)-Here's another way you might save money on your student loans: Pick the right company to consolidate them. Before you decide on a discount program, make sure you read the fine print, said Dan Thibeault, president of Graduate Leverage, a student loan counseling service in Cambridge, Mass., founded by a group of Harvard Business School students in 2003. Some consolidators will require that you have a certain loan amount in consolidation to benefit. Others will not give you the discounts if you consolidate during your grace period, which is often the best time to do it, said Thibeault. Plus, these discounts can change at any time, and so you want to look for a lender with a solid history of stable or improving discounts, he added.
Amid the hype, opportunity lurks for students with loans
Excerpts from February 5, 2004 Edition
Harvard News Office
Consolidation best bet for student borrowers - Around the University, financial aid officers and even some student entrepreneurs are shouting to be heard above the din of direct mail: Ignore the hype, but don't pass on student loan consolidation altogether…At Harvard Business School, Dan Thibeault and five classmates have launched Graduate Leverage, a grassroots business that aims to educate their fellow students at Harvard and elsewhere about the puzzling intricacies of student loan consolidation. With a Web site and a toll-free phone number, they dispense what they believe is valuable information to students and graduates with debt. And, by partnering with selected educational lenders, Graduate Leverage can also consolidate loans; like all loan consolidation, there is no cost to the customer. The entrepreneurs - Ken Ebbit, Mark Palmenter '00, Andrew Solomon, Oladipo Taiwo, Thibeault, and Jeff Wanic, all second-year MBA students - believe their status as fellow students and fellow debtors gives them a rare commodity in their industry: trust.
Student loans got you down? Don't get mad, get Graduate Leverage
By Jamil Khan
Graduate Leverage is the only intermediary in the student loan business that is run by students who are, in essence, looking out for both the best interests of and best interest rates for other students. And the message is resonating nationwide. Graduate Leverage has been invited to speak at over 50 graduate programs. You can also catch them at national conferences for Teach for America, the American Medical Student Association, and the National Association for Graduate and Professional Students. Here's how it works: any student holding federal debt can lock in interest rates at 2.875% for three years and then have them drop to 1.625% for the life of a 30-year loan, provided that payments are made on-time.
Student Loan 101: When Looking To Consolidate, Discounts Are Key
2 June 2004
Dow Jones Newswires
By Kaja Whitehouse
You might save money on your student loans by picking the right company to consolidate them. Starting in July, demand for consolidation services is expected to increase as interest rates on certain federal loans, such as the popular Stafford loans, drop to historical lows. People who consolidate their federal student loans between July 1, 2004, and June 30, 2005, will be able to lock in these low rates for the life of their loans...Before you decide on a discount program, make sure you read the fine print, said Dan Thibeault, president of Graduate Leverage, a student-loan counseling service in Cambridge, Mass.
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