May 15, 2025 • 32 mins
Navigating the complex world of student loans just got a whole lot easier. Chris Abkarians, founder of Juno, shares the fascinating origin story of how a simple Google spreadsheet comparing MBA loan offers transformed into a groundbreaking platform that's revolutionizing student financial aid.
The revelation that sparked Juno's creation will shock you: identical borrower profiles can receive interest rates that differ by 3-4% between lenders – a discrepancy that translates to thousands of dollars over the life of a loan. This market inefficiency persists because traditional online searches for "best student loans" are dominated by advertising dollars rather than actual value. As Chris explains, "If you go to Google and try to search for best student loan or cheapest student loan, you are going to get anything but the cheapest student loan."
Juno's innovative approach flips the traditional power dynamic. By collecting "demand" from thousands of students with similar needs, they create collective bargaining leverage with lenders to secure better rates than individuals could get on their own. Their transparent business model only generates revenue when members actually secure loans through their negotiated partners, creating perfect alignment between Juno's success and customer savings.
The podcast takes a dramatic turn when Chris reveals potentially seismic changes coming to federal student loan programs in 2025. A proposed $50,000 lifetime cap on Parent PLUS loans and the possible elimination of Grad PLUS loans would force many more students into the private loan market. For medical and law students especially, these changes could create serious funding gaps that require innovative new private loan products with features like extended deferment during residency and clerkships.
Whether you're a parent planning for your child's education, a graduate student exploring your options, or a higher education professional preparing for industry changes, this episode delivers invaluable insights about navigating student loans in today's market and tomorrow's evolving landscape. Want to learn more? Chris welcomes inquiries at chris@joinjuno.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
All right, so happy to be with Chris.
Chris, how are you Doing verywell, mike, how are you doing
Good good.
You have a fascinating companywith a really unique value
proposition, so I want to giveyou a chance to talk about that
and share some of the work thatyou're doing with our audience.
But maybe, just tocontextualize, can you give a
little bit about your backstoryand then how Juno came to be?
Speaker 2 (00:25):
Absolutely More than happy to.
So seven years ago, I gotadmitted to a couple of MBA
programs and I was super excited.
But then I got the bill andrealized I was going to have to
borrow money to pay for it.
And as I started looking intowhat different student loan
rates looked like.
And as I started looking intowhat different student loan
(00:46):
rates looked like, one of myincoming classmates asked if I
wanted to share some informationwith him about what rates I was
getting quoted from differentbanks and credit unions, and so
we created a Google sheet to seeOK, based on each one of our
credit scores, what rates are wegetting from different places,
just so that we can help guideour classmates towards wherever
(01:07):
would have the lowest rates.
And then we quickly realizedthat we were getting really
different rates with the sameprofiles from one place to the
next.
I expected this to be anefficient market, for rates to
be really similar for one personto the next, and it wasn't.
So we started an idea to saycan we collect a few hundred of
(01:27):
our classmates together who allneed to get loans for the same
fall semester, and ask some ofthese same lenders if they'd be
willing to provide a discount toall of the people in our group
if we went to that bank or thatcredit union and, honestly, at
this point we didn't know whatwe were doing.
We were cold messaging the CEOsof a couple of different banks
(01:49):
and, surprisingly, a lot of themgot back to us and were very
interested in the concept.
So we started at that pointjust an experimental version of
Juno.
There was no business here.
It was just seeing if we couldhelp ourselves and our
classmates get cheaper studentloans.
It worked really well and wedecided to turn that into a
company once Nikhil and Ifinally met on campus a few
(02:11):
months later.
Speaker 1 (02:13):
Such a cool story.
How wildly different were therates when you were initially
testing and just seeing theinefficiencies in the market?
Speaker 2 (02:24):
Very easy to see a three or 4% difference in rate
for the same 10-year term.
So that was what surprised methe most.
In some cases it's very similarfrom one place to the next, but
it's very unpredictable.
Uh, and for all of the we'regoing to an mba program.
(02:52):
I thought that, uh, everybodythat was in our group was going
to be spending a lot of timeresearching this as well and
digging into what the total costof interest and fees would be
for the different options thatwere out there, and it was kind
of surprising to us at firstthat most people didn't think
that it was possible for therates to be different from one
place to the next, and where Ispent hundreds of hours paying
(03:15):
portions of their applicationand not nearly enough time
comparing the cost of differentways to pay for it.
We thought that was a a reallybig hole, that this wasn't
enough education and tooling outthere to help guide people
towards something thatultimately can save them a
significant chunk of money.
Speaker 1 (03:34):
Yeah, that's awesome.
Your group negotiation model isjust so different than
traditional lending, which is, Ithink, something that's really
interesting.
Can you walk us through howyou're sort of flipping the
power dynamic you know for yourcustomers and why you see this
as a scalable and helpfulsolution that you know
(03:56):
conventional financial aidmodels may be missing?
Speaker 2 (03:59):
Yeah.
So let me talk about thisslightly separately, for grad
and for undergrad, and for todayversus next year.
To put it most simply, rightnow, if you are going to a
graduate program, you have twofederal student loan options
that you can access.
One of them charges youcurrently a little bit over 8%
(04:24):
on a rate and a 1% originationfee.
Everybody gets the same rate.
It's pretty competitive, and ifyou need more than $20,500 from
that, you have to use the GradPlus program, which is, candidly
, pretty expensive compared towhat else you can find out there
.
It's a little bit over 9% asthe rate and the 4% origination
fee percent as the rate and thefour percent origination fee.
(04:48):
And what we found was it wasn'ttoo hard to help a lot of people
get a significantly cheaperprivate student loan than that
grad plus product, as long as wecould bring a lot of people to
the market together.
And so what we do throughoutthe year on the graduate student
side is collect demand, whichis basically signing up for a
wait list from tens of thousandsof people across different
(05:09):
types of graduate programs, andask them to just basically tell
us their estimated credit scorehow much they think they might
need to borrow where they'regoing to school and their
graduation year.
We don't share that data withanybody.
We don't charge anybodyanything to sign up, but the
more demand we collect, theeasier it is for me and my team
(05:29):
to go to different lenders andsay this is the potential size
of the pool that we could bringto you, and we want you to share
some information with us aboutthe best pricing you could give
to each person in each creditbucket, and we're then able to
compare what those offers looklike across a pretty wide set of
competitors and then presentthe best offers to our member
(05:53):
base in June so that they have alot of time to prepare before
they actually need to pay forschool.
And throughout this, our entiremessaging to students is we've
done a lot of homework and workin the background to try to get
you the lowest possible rates,but don't trust us and take our
word for it.
We highly encourage everybody tostill shop around and try to
(06:15):
see if you can find somethingbetter and if you can, please
let us know so that we can gowork with that new place that
maybe we haven't found yet andthat trust building aspect of it
does.
Let us build a pretty strongbusiness in the graduate space.
The other thing that we dopretty well is a lot of
one-on-one conversations withgrad students, and so each year
(06:37):
we'll talk to thousands ofpeople some incoming students,
some second year students whoare returning and people who are
graduating and looking torefinance their loans and just
help them think throughdifferent processes.
On the undergraduate side, it'spretty much the same exact
thing where, throughout the year, content series that we put a
(07:02):
lot of effort into to helppeople understand everything
from filling out FAFSA tounderstand their student aid
index is calculated tounderstanding the reasons why
they might be able to appealtheir financial aid awards.
So these three content piecesare meant to help people
understand how to pay less moneyto go to school and, for those
(07:22):
who still need money afterthey've done all those things,
help them understand what theirstudent loan options are and the
cases in which it makes senseto compare their Parent PLUS
option to a private option.
Speaker 1 (07:36):
Very cool, very cool.
What's the business model looklike?
How are you guys generating therevenue?
Speaker 2 (07:42):
Yeah, great question guys generating the revenue?
Yeah, great question.
We only get paid.
So our overall business modelis to get paid on a percentage
of the student loan volume thatour partners end up funding, and
we're trying to design this asa win-win.
We're not going to chargeanybody something to sign up or
to use Juno, and we're going totell you not to use Juno if you
(08:02):
find a better option anywhereelse.
And as long as we can keepthose two things true, then
we'll have a lot of people whoultimately use this and tell
other people to use this, andI'd say the thing that maybe
points to that being true mostis that about 70% of the 200,000
plus people who have joinedJuno so far have done so through
(08:25):
a recommendation from a friend,a classmate or another parent.
Speaker 1 (08:29):
Yeah, that's great.
I love the win-win aspect inhow you're aligning incentives
in a very inefficient market sothat it's sort of working for
all parties involved.
Speaker 2 (08:40):
Yeah, I might just double down there on just one
point, which is right now.
The process for finding astudent loan is a little bit
broken, and I say this becauseif you go to Google and you try
to search for best student loanor cheapest student loan, you
are going to get anything butthe cheapest student loan.
It's an advertising drivenplatform and people can spend a
(09:07):
lot of money to surface theirproduct to the top, and so you
end up in this scenario whereit's a seasonal business, so a
lot of people are trying toadvertise to people in the same
three month window and itcomplicates things.
So it does take a lot of workto try to find other ways to get
in front of parents andstudents and explain to them
that they just need to shoparound.
(09:27):
I don't need to convince you touse Juno.
I just want to convince youthat you should shop around, no
matter where you're looking, andif I can do that, hopefully
you'll search long enough tofind us and we'll have a chance
to help you find somethingbetter.
Speaker 1 (09:41):
Yeah, that's a great point about Google.
Unfortunately, it works thatway in a lot of different
markets, right?
So loaded question here.
But what do you think of?
The biggest blind spots arethat most colleges, universities
, have in terms of how they'reapproaching student financial
aid.
And then, how do you see thesechanging, because you alluded
(10:03):
before to how things aren'tgoing to look the same next year
.
So what are your thoughts onthat?
Speaker 2 (10:12):
Let me caveat with.
I think that higher edinstitutions, and especially
financial aid offices, have anincredibly difficult job.
They have so much that has tohappen in such a short window of
time for so many people that Idon't want to be that position.
I think they do a fantastic jobwith the time that they have to
do it.
I think the blind spot ismostly around helping On the
(10:38):
undergraduate side, not reallyas much of one On the graduate
side, I think the issue becomes.
The Higher Education Act hasprohibition on financial aid
offices being able to promote oreven talk about private lenders
outside of a very rigid andstructured way, and so most
(11:02):
schools use a well-recognizedand compliant system, which is
typically called Elm Select, andthere's a few others, and what
that means is, on theirfinancial aid website, there is
typically a link to a list oflenders that people have
borrowed from in the past to payfor that school.
And look, these lists are fine.
(11:25):
They do list most sources, butthey don't actually let you see
what rates you would get, and soyou're just left with a list of
links that will force you tofill out multiple applications
over and over again in order tosee if you can shop around and
find a better rate, and I justthink that their hands are tied
(11:47):
under current regulatory policy.
That is the only thing thatthey can show to people and as a
result, a lot of people don'tend up shopping around and
finding the lowest rate.
Some things are changing.
That aspect I just spoke aboutmight not be, but starting next
year there is currently aproposal in the House Budget
(12:08):
Reconciliation Bill which wouldhave two very big overall
impacts.
So on the undergrad side,currently a lot of institutions
get funding.
Let's say you're a student andyou're going to UCLA, for
example, for your first year ofschool, you can borrow $5,500
through the direct loan programand if your family still needs
(12:31):
money after that, $5,500 throughthe direct loan program, and if
your family still needs moneyafter that $5,500, your parents
can use a Parent PLUS loan wherethe borrowing cap is all the
way up to the cost of attendance, and so that fills most
people's gap funding needs, aslong as a parent is willing to
use that.
Starting next year it ispossible that that Parent PLUS
(12:52):
program would have a lifetimecap of $50,000 per parent, which
covers a lot of people, but italso leaves a lot of people with
the remaining gap.
Beyond that, the most recentavailable data showed that about
600,000 parents use more than$14 billion of Parent PLUS
funding to pay for a singleschool year.
(13:14):
A lot of that is going to getpushed into the private market
and from July 1st of next yearand on, it's going to be
imperative for financial aidoffices to consider what they
communicate to parents and thestudents and what their private
alternative options look like tofill that gap.
Same thing is true for the gradside now parents and the
students about what theirprivate alternative options look
like to fill that gap.
(13:34):
Same thing is true for the gradside now.
So I think the latest numbersare about 400,000 people use the
Grad Plus program to pay for$13 to $14 billion worth of grad
programs in the most recentavailable year and the Grad Plus
program might end completely.
There's another loan programthat students will still be able
to borrow from.
It might have slightlydifferent borrowing limits that
(13:57):
are associated with it, but itstill means that for both grad
and for undergrad, there's goingto be a lot of people who now
get forced into the privatemarket unless the price of
school changes, and there's justgoing to be a lot more need to
help guide people towards whatthe best cost option is.
Speaker 1 (14:14):
Yeah, that's a great point, very layered and very
well explained.
How can institutionspotentially partner to improve
net transparency, yields,affordability, overall?
How do they use you?
How do they partner?
What's that look like?
Speaker 2 (14:33):
Yeah, so far, I'm talking to a couple of schools
right now, just one-on-one.
Anybody can email me at chris,at joinjunocom, j-o-i-n-j-u-n-o,
and this is what we're tryingto help people figure out right
now.
It's the way to do this that isstill compliant with the Higher
(14:55):
Education Act restrictions andrules, assuming that those don't
change.
Our goal would be to find a wayto present people with the
simplest way to check theirrates across multiple places,
and look, there's tools outthere that let you do that.
Right now.
We want to go a step beyondthat and let every school use
the Juno model, where I'll giveyou a simple example right now.
(15:19):
Under the current rules, aschool is allowed to have a
preferred lender.
They have to run an RFP processthat follows specific rules and
is compliant.
They publish what theircriteria are, and the only
school that we've seen that doesthis year after year is Harvard
(15:41):
Law School, and they run thisprocess and they get their
students fantastic privatestudent loan rates.
But what if you were able tocombine the collective buying
power of Harvard Law School with100 other schools or 1,000
other schools?
That's what Juno's been doingin the background, but going
directly to students, and wewant to do that for schools
(16:03):
directly.
Speaker 1 (16:05):
Yeah, I love that, I love that vision.
One thing that just sort ofstrikes me with regards to
somebody that's not, you know,admittedly not an expert in
financial aid, but just how,like late in the processes, with
nuance and pain points thatlook very, very different
depending on sort of where yousit in the market.
(16:27):
Right, where you sit in themarket, right Like so, the CFO
versus the financial aid personversus the student, like are
going to have very, verydifferent views and
understandings of, like what theprocess looks like.
What are commonmisunderstandings, you see, on
all sides when it comes to how,like, the loan markets actually
(16:49):
operate, because, like you'resaying, there's massive
inefficiencies, there's wildlydifferent things that sort of
the end person is getting.
What are you seeing that you'dlike other people to sort of
know?
Speaker 2 (17:03):
It's a good question, a little bit of a tougher one,
I think, over the last 15 yearsor so.
So there haven't been majorchanges to the federal student
loan system in 15 years, andover the last 15 years the
federal student loan optionshave been there to fill the full
(17:24):
bill up to the point of need.
And if that changes, then whichit seems likely to the
importance of getting involvedin helping your students find
alternatives to help pay forschool just goes up
significantly.
(17:44):
For a while now I don't want tosay for the last 15 years it's
been objectively true thatfederal student loans are the
best product for the vast, vastmajority of people.
It didn't really make sense todo a lot of work to find a
private alternative for peoplestudents and other folks who
(18:09):
have been, just because of theirbackgrounds and credit history
and they've been working, ableto qualify for much better
private rates in a lot of casesthan the Grad Plus program.
And so our business has madesense and moving forward.
That just completely flipswhere it's.
Instead of a product that helpspeople save money, it's going
(18:30):
to become a product that'sneeded to help people actually
afford to go to school, certainthat the amount of tuition money
(18:54):
that you're budgeting to comein every year is able to come in
every year unless you're ableto find ways for people to
qualify for funding in order topay for your school, and it's
going to happen pretty quickly.
The general expectation is thatsome changes might happen to
this bill, but that, whateverchanges might be contemplated,
(19:15):
the final version will be inplace by the end of September,
and that would only likely leavebetween when everything is set,
when people start applying forloans to pay for a school, for
everybody to figure out what'sgoing on and figure out what to
do.
And so if there's just onegeneral takeaway I could put
(19:37):
here and sort of be long-windedabout this, it's that it's
important to prepare early andto get your ducks in a row to
figure out what your plan ofaction would be if these things
happen, and to know that youwill likely need to be
communicating something topeople who are applying in q4,
(19:59):
who would be enrolling in fallof 2026, and I would expect a
lot of people to be veryconcerned about what their
ability is to pay for everyschool in just a couple of
months.
Speaker 1 (20:15):
Yeah, it's well said.
Can you break down some of themechanics of what the
negotiating process looks likeyou on behalf of the students,
and how you're sort of walkingpeople through that?
Speaker 2 (20:27):
Yeah.
So let me start on the gradside.
So we classify ourselves as amember organization, like Costco
or AAA, and it allows us toprovide our members with
something of it as adifferentiated rate map than
going directly to a lender.
(20:47):
So when someone is coming toJuno on the grad student side,
I'll just start with whatthey're seeing and then we'll
talk about how we actually getthere.
So what they're seeing whenthey check their rates on Juno
is still similar lenders thatthey could find directly, but
the rates that they're gettingthrough Juno are lower than if
(21:10):
they go directly to those samelenders' websites, and so that
process is interesting.
It's a little bit weird forpeople to wrap their heads
around sometimes, but you canjust kind of think of it as bulk
discounts that are going to thegroup AAA, discounts going to
the group no-transcript, whichis even more important next year
(21:57):
and beyond.
The more competition there isin the market, the more capital
there is for students.
Lower rates get for studentsand for parents, and so that is
a lot of what we're trying to do.
So that negotiation processlooks like asking lenders to
give us a lot of insight intoexactly how they would
underwrite our group.
What rates are people expectedto get and how can we structure
(22:22):
offers that make the vastmajority of people better off?
And then making sure that we'reable to get our partners to add
this component that we like tocall a fairly comprehensive rate
match process, so that ifsomebody does find a lower rate
from somewhere else, we're stillable to offer them a true rate
match and the best product forthem.
(22:44):
And on the undergrad side it'shighly similar to that.
Speaker 1 (22:47):
Yeah, very cool.
You've served over 200,000families.
Now, you know you've.
It seems to me that you're, youknow, starting to kind of have
a have the growth curve.
You know, really really go upas you.
You know you've got thisamazing value proposition.
More people are knowing aboutyou.
Are there trends that you'reseeing in the data that colleges
(23:10):
and universities should paycloser attention to?
They're just helpful to know.
Speaker 2 (23:16):
Good question.
Nothing particular stands out.
I'd say the trends that I thinkare happening soon, that are
going to have a really bigimpact on colleges and
universities, have to do withthis bill again, and maybe I'll
(23:37):
just take 30 seconds to explainthe three biggest ones that
might impact the way that, threebiggest ones that might impact
the way that especiallyfinancial aid offices view the
market.
So let's just start on theundergraduate side, the way that
the bill is currently written.
There is a $50,000 lifetime capfor parent plus borrowing per
(23:59):
parent, and so next year youtheoretically might not see a
very big change in fundingsources used to pay for a
college, but if a lot of peoplewho, let's say, use the entirety
of, or the majority of theirlifetime parent plus cap then
(24:19):
don't have the ability to borrowin 2027 and beyond, that's
going to start having a reallybig impact to that.
So I'd say, on undergrad, it'sjust really important to think
two years out and about makingsure you're looking at the
numbers, for how much areparents actually borrowing right
now and what does that mean foryour projected ability to
access federal funding in thefall of the year?
(24:41):
On the grad side, it's kind ofsimilar but it has a really big
impact, a stark one for medicalschools and dental programs.
So the bill, as it's written,has a $150,000 lifetime burn cap
for graduate loans forprofessional degrees like
(25:03):
medicine and dentistry andpharmacy and other things, and
what it kind of means is a lotof medical and dental students
might be fine with access tofunding for a year, maybe a year
and a half, and then quicklyafter that there's going to be a
limitation on what they can get, and it gets more complicated
(25:24):
because what we need to solvenot just the market in general,
but, I think, schools workingtogether and all of the private
lenders in the market is findinga way to create new private
student loan programs that meetthe specific needs of doctors
and of lawyers, and the way thatworks is a lot of doctors not
(25:49):
all they don't get paid a lot.
After they graduate, they'regoing to do a couple of years of
residency and during thatresidency window, before they
start earning their fullsalaries, they don't have the
ability to make full payments onthese loans, especially with
the amount that they need toborrow, and so we need to find a
way for the market to create anextended deferment window or
(26:10):
the ability for doctors to pay amuch lower amount while they
are in residency, and the samething is true for lawyers.
About 20 plus percent of lawyerson a lot of schools end up
doing traditional clerkships.
It's great.
It's a service to society.
It doesn't pay a lot.
They cannot afford to pay backa significant portion of their
loans during that window, so themarket needs to create a
(26:31):
product that lets lawyers defertheir payments for another 12
months after they graduate, andso my hope is that the more
people learn about these issuesand the more action gets taken
about them, the likelier it isthat we're able to solve them
before they become an issue.
But awareness is the firstthing that I think everybody
needs to get around.
Speaker 1 (26:52):
Incredibly well said.
What's the future roadmap looklike for Juno in terms of the
next six 12 months?
And then, how do colleges getin touch if we give you email
address before?
But, um, maybe just a quickcall to action there too, around
like what's, what's the bestway to start working with you
all?
Speaker 2 (27:11):
yeah, please email me at chris.
As many people as possibleunderstand what changes could
look like.
As many people as possibleunderstand what changes could
(27:31):
look like.
I'd love to have theopportunity to have these
conversations and learn more ofwhat your pain points are and
the different ways that we mightbe able to solve them.
Our roadmap at the moment isfocused very much on the three
segments of our business.
So first, it's making sure thatwe're able to continue what we
do on the undergraduate side,which is to get in front of as
many parents as we can everysingle year and help them
(27:54):
understand what the landscape ofstudent lending looks like and
why it's incredibly importantfor them to shop around.
My only mission on undergrad is, all year round, to have as
many parents just learn thatthey should shop around, and
that's more important next yearthan it's been for the last 15.
And so we're working with a lotof different high schools to
(28:15):
run our webinar series and totry to partner with them about
getting the word out.
On the graduate side, we godirectly to students.
We work with almost everystudent organization on several
hundred campuses and we'retrying to get the word out about
why what we do matters and whywe need to create large groups
(28:36):
of lawyers and large groups ofdoctors and dentists, so that we
can convince some lenders tofix the problems that I was just
talking about and allow them todefer loans payments until
after those key life events.
And for refinancing.
I haven't touched on this yet,but to date, there hasn't been a
(28:59):
reason for people with federalstudent loans to refinance them.
For the most part, many peoplehave been able to get a lot of
benefits from using federalstudent loans, and if they
refinance them to the privatemarket, they lose those benefits
, and some of those benefitshave meant that people have been
able to not make significantpayments for quite some time.
(29:21):
Now, as these changes I'mtalking about go into effect, a
lot more people are going tograduate with private student
loans, and my favorite thingabout the student loan market is
when you can refinance aprivate student loan, because
all it really means is some bankgave you a loan while you were
in school and they took the riskthat you would find a job.
(29:45):
Now that you've graduated andyou've found a job, you were in
school and they took the riskthat you would find a job.
Now that you've graduated andyou've found a job, you're
viewed as generally less risky,and there are other banks that
are willing to give you a loanat a lower rate for the same
term and there's typically nofees involved.
So it really is something thatpeople should be doing and
moving forward.
Many more people will want toand need to do so.
(30:11):
To sum it all up, if we canjust figure out a way to
convince people and to letpeople know that, a they need to
shop around and, b they need tocontinue shopping around even
after they graduate to keepbringing their rate down, then
we can help a lot of people savea lot of money over time and
make what is now a prettydifficult paying for college
experience just a little biteasier.
Speaker 1 (30:31):
Incredibly well said, chris, and I think that's a
great place to end it.
Chris, I appreciate you, thankyou.
Thank you, mike, reallyappreciate it.
All right, so happy to be with Chris.
Chris, how are you Doing verywell, mike, how are you doing
Good good.
You have a fascinating companywith a really unique value
proposition, so I want to giveyou a chance to talk about that
and share some of the work thatyou're doing with our audience.
But maybe, just tocontextualize, can you give a
little bit about your backstoryand then how Juno came to be?
Speaker 2 (00:25):
Absolutely More than happy to.
So seven years ago, I gotadmitted to a couple of MBA
programs and I was super excited.
But then I got the bill andrealized I was going to have to
borrow money to pay for it.
And as I started looking intowhat different student loan
rates looked like.
And as I started looking intowhat different student loan
(00:46):
rates looked like, one of myincoming classmates asked if I
wanted to share some informationwith him about what rates I was
getting quoted from differentbanks and credit unions, and so
we created a Google sheet to seeOK, based on each one of our
credit scores, what rates are wegetting from different places,
just so that we can help guideour classmates towards wherever
(01:07):
would have the lowest rates.
And then we quickly realizedthat we were getting really
different rates with the sameprofiles from one place to the
next.
I expected this to be anefficient market, for rates to
be really similar for one personto the next, and it wasn't.
So we started an idea to saycan we collect a few hundred of
(01:27):
our classmates together who allneed to get loans for the same
fall semester, and ask some ofthese same lenders if they'd be
willing to provide a discount toall of the people in our group
if we went to that bank or thatcredit union and, honestly, at
this point we didn't know whatwe were doing.
We were cold messaging the CEOsof a couple of different banks
(01:49):
and, surprisingly, a lot of themgot back to us and were very
interested in the concept.
So we started at that pointjust an experimental version of
Juno.
There was no business here.
It was just seeing if we couldhelp ourselves and our
classmates get cheaper studentloans.
It worked really well and wedecided to turn that into a
company once Nikhil and Ifinally met on campus a few
(02:11):
months later.
Speaker 1 (02:13):
Such a cool story.
How wildly different were therates when you were initially
testing and just seeing theinefficiencies in the market?
Speaker 2 (02:24):
Very easy to see a three or 4% difference in rate
for the same 10-year term.
So that was what surprised methe most.
In some cases it's very similarfrom one place to the next, but
it's very unpredictable.
Uh, and for all of the we'regoing to an mba program.
(02:52):
I thought that, uh, everybodythat was in our group was going
to be spending a lot of timeresearching this as well and
digging into what the total costof interest and fees would be
for the different options thatwere out there, and it was kind
of surprising to us at firstthat most people didn't think
that it was possible for therates to be different from one
place to the next, and where Ispent hundreds of hours paying
(03:15):
portions of their applicationand not nearly enough time
comparing the cost of differentways to pay for it.
We thought that was a a reallybig hole, that this wasn't
enough education and tooling outthere to help guide people
towards something thatultimately can save them a
significant chunk of money.
Speaker 1 (03:34):
Yeah, that's awesome.
Your group negotiation model isjust so different than
traditional lending, which is, Ithink, something that's really
interesting.
Can you walk us through howyou're sort of flipping the
power dynamic you know for yourcustomers and why you see this
as a scalable and helpfulsolution that you know
(03:56):
conventional financial aidmodels may be missing?
Speaker 2 (03:59):
Yeah.
So let me talk about thisslightly separately, for grad
and for undergrad, and for todayversus next year.
To put it most simply, rightnow, if you are going to a
graduate program, you have twofederal student loan options
that you can access.
One of them charges youcurrently a little bit over 8%
(04:24):
on a rate and a 1% originationfee.
Everybody gets the same rate.
It's pretty competitive, and ifyou need more than $20,500 from
that, you have to use the GradPlus program, which is, candidly
, pretty expensive compared towhat else you can find out there
.
It's a little bit over 9% asthe rate and the 4% origination
fee percent as the rate and thefour percent origination fee.
(04:48):
And what we found was it wasn'ttoo hard to help a lot of people
get a significantly cheaperprivate student loan than that
grad plus product, as long as wecould bring a lot of people to
the market together.
And so what we do throughoutthe year on the graduate student
side is collect demand, whichis basically signing up for a
wait list from tens of thousandsof people across different
(05:09):
types of graduate programs, andask them to just basically tell
us their estimated credit scorehow much they think they might
need to borrow where they'regoing to school and their
graduation year.
We don't share that data withanybody.
We don't charge anybodyanything to sign up, but the
more demand we collect, theeasier it is for me and my team
(05:29):
to go to different lenders andsay this is the potential size
of the pool that we could bringto you, and we want you to share
some information with us aboutthe best pricing you could give
to each person in each creditbucket, and we're then able to
compare what those offers looklike across a pretty wide set of
competitors and then presentthe best offers to our member
(05:53):
base in June so that they have alot of time to prepare before
they actually need to pay forschool.
And throughout this, our entiremessaging to students is we've
done a lot of homework and workin the background to try to get
you the lowest possible rates,but don't trust us and take our
word for it.
We highly encourage everybody tostill shop around and try to
(06:15):
see if you can find somethingbetter and if you can, please
let us know so that we can gowork with that new place that
maybe we haven't found yet andthat trust building aspect of it
does.
Let us build a pretty strongbusiness in the graduate space.
The other thing that we dopretty well is a lot of
one-on-one conversations withgrad students, and so each year
(06:37):
we'll talk to thousands ofpeople some incoming students,
some second year students whoare returning and people who are
graduating and looking torefinance their loans and just
help them think throughdifferent processes.
On the undergraduate side, it'spretty much the same exact
thing where, throughout the year, content series that we put a
(07:02):
lot of effort into to helppeople understand everything
from filling out FAFSA tounderstand their student aid
index is calculated tounderstanding the reasons why
they might be able to appealtheir financial aid awards.
So these three content piecesare meant to help people
understand how to pay less moneyto go to school and, for those
(07:22):
who still need money afterthey've done all those things,
help them understand what theirstudent loan options are and the
cases in which it makes senseto compare their Parent PLUS
option to a private option.
Speaker 1 (07:36):
Very cool, very cool.
What's the business model looklike?
How are you guys generating therevenue?
Speaker 2 (07:42):
Yeah, great question guys generating the revenue?
Yeah, great question.
We only get paid.
So our overall business modelis to get paid on a percentage
of the student loan volume thatour partners end up funding, and
we're trying to design this asa win-win.
We're not going to chargeanybody something to sign up or
to use Juno, and we're going totell you not to use Juno if you
(08:02):
find a better option anywhereelse.
And as long as we can keepthose two things true, then
we'll have a lot of people whoultimately use this and tell
other people to use this, andI'd say the thing that maybe
points to that being true mostis that about 70% of the 200,000
plus people who have joinedJuno so far have done so through
(08:25):
a recommendation from a friend,a classmate or another parent.
Speaker 1 (08:29):
Yeah, that's great.
I love the win-win aspect inhow you're aligning incentives
in a very inefficient market sothat it's sort of working for
all parties involved.
Speaker 2 (08:40):
Yeah, I might just double down there on just one
point, which is right now.
The process for finding astudent loan is a little bit
broken, and I say this becauseif you go to Google and you try
to search for best student loanor cheapest student loan, you
are going to get anything butthe cheapest student loan.
It's an advertising drivenplatform and people can spend a
(09:07):
lot of money to surface theirproduct to the top, and so you
end up in this scenario whereit's a seasonal business, so a
lot of people are trying toadvertise to people in the same
three month window and itcomplicates things.
So it does take a lot of workto try to find other ways to get
in front of parents andstudents and explain to them
that they just need to shoparound.
(09:27):
I don't need to convince you touse Juno.
I just want to convince youthat you should shop around, no
matter where you're looking, andif I can do that, hopefully
you'll search long enough tofind us and we'll have a chance
to help you find somethingbetter.
Speaker 1 (09:41):
Yeah, that's a great point about Google.
Unfortunately, it works thatway in a lot of different
markets, right?
So loaded question here.
But what do you think of?
The biggest blind spots arethat most colleges, universities
, have in terms of how they'reapproaching student financial
aid.
And then, how do you see thesechanging, because you alluded
(10:03):
before to how things aren'tgoing to look the same next year
.
So what are your thoughts onthat?
Speaker 2 (10:12):
Let me caveat with.
I think that higher edinstitutions, and especially
financial aid offices, have anincredibly difficult job.
They have so much that has tohappen in such a short window of
time for so many people that Idon't want to be that position.
I think they do a fantastic jobwith the time that they have to
do it.
I think the blind spot ismostly around helping On the
(10:38):
undergraduate side, not reallyas much of one On the graduate
side, I think the issue becomes.
The Higher Education Act hasprohibition on financial aid
offices being able to promote oreven talk about private lenders
outside of a very rigid andstructured way, and so most
(11:02):
schools use a well-recognizedand compliant system, which is
typically called Elm Select, andthere's a few others, and what
that means is, on theirfinancial aid website, there is
typically a link to a list oflenders that people have
borrowed from in the past to payfor that school.
And look, these lists are fine.
(11:25):
They do list most sources, butthey don't actually let you see
what rates you would get, and soyou're just left with a list of
links that will force you tofill out multiple applications
over and over again in order tosee if you can shop around and
find a better rate, and I justthink that their hands are tied
(11:47):
under current regulatory policy.
That is the only thing thatthey can show to people and as a
result, a lot of people don'tend up shopping around and
finding the lowest rate.
Some things are changing.
That aspect I just spoke aboutmight not be, but starting next
year there is currently aproposal in the House Budget
(12:08):
Reconciliation Bill which wouldhave two very big overall
impacts.
So on the undergrad side,currently a lot of institutions
get funding.
Let's say you're a student andyou're going to UCLA, for
example, for your first year ofschool, you can borrow $5,500
through the direct loan programand if your family still needs
(12:31):
money after that, $5,500 throughthe direct loan program, and if
your family still needs moneyafter that $5,500, your parents
can use a Parent PLUS loan wherethe borrowing cap is all the
way up to the cost of attendance, and so that fills most
people's gap funding needs, aslong as a parent is willing to
use that.
Starting next year it ispossible that that Parent PLUS
(12:52):
program would have a lifetimecap of $50,000 per parent, which
covers a lot of people, but italso leaves a lot of people with
the remaining gap.
Beyond that, the most recentavailable data showed that about
600,000 parents use more than$14 billion of Parent PLUS
funding to pay for a singleschool year.
(13:14):
A lot of that is going to getpushed into the private market
and from July 1st of next yearand on, it's going to be
imperative for financial aidoffices to consider what they
communicate to parents and thestudents and what their private
alternative options look like tofill that gap.
Same thing is true for the gradside now parents and the
students about what theirprivate alternative options look
like to fill that gap.
(13:34):
Same thing is true for the gradside now.
So I think the latest numbersare about 400,000 people use the
Grad Plus program to pay for$13 to $14 billion worth of grad
programs in the most recentavailable year and the Grad Plus
program might end completely.
There's another loan programthat students will still be able
to borrow from.
It might have slightlydifferent borrowing limits that
(13:57):
are associated with it, but itstill means that for both grad
and for undergrad, there's goingto be a lot of people who now
get forced into the privatemarket unless the price of
school changes, and there's justgoing to be a lot more need to
help guide people towards whatthe best cost option is.
Speaker 1 (14:14):
Yeah, that's a great point, very layered and very
well explained.
How can institutionspotentially partner to improve
net transparency, yields,affordability, overall?
How do they use you?
How do they partner?
What's that look like?
Speaker 2 (14:33):
Yeah, so far, I'm talking to a couple of schools
right now, just one-on-one.
Anybody can email me at chris,at joinjunocom, j-o-i-n-j-u-n-o,
and this is what we're tryingto help people figure out right
now.
It's the way to do this that isstill compliant with the Higher
(14:55):
Education Act restrictions andrules, assuming that those don't
change.
Our goal would be to find a wayto present people with the
simplest way to check theirrates across multiple places,
and look, there's tools outthere that let you do that.
Right now.
We want to go a step beyondthat and let every school use
the Juno model, where I'll giveyou a simple example right now.
(15:19):
Under the current rules, aschool is allowed to have a
preferred lender.
They have to run an RFP processthat follows specific rules and
is compliant.
They publish what theircriteria are, and the only
school that we've seen that doesthis year after year is Harvard
(15:41):
Law School, and they run thisprocess and they get their
students fantastic privatestudent loan rates.
But what if you were able tocombine the collective buying
power of Harvard Law School with100 other schools or 1,000
other schools?
That's what Juno's been doingin the background, but going
directly to students, and wewant to do that for schools
(16:03):
directly.
Speaker 1 (16:05):
Yeah, I love that, I love that vision.
One thing that just sort ofstrikes me with regards to
somebody that's not, you know,admittedly not an expert in
financial aid, but just how,like late in the processes, with
nuance and pain points thatlook very, very different
depending on sort of where yousit in the market.
(16:27):
Right, where you sit in themarket, right Like so, the CFO
versus the financial aid personversus the student, like are
going to have very, verydifferent views and
understandings of, like what theprocess looks like.
What are commonmisunderstandings, you see, on
all sides when it comes to how,like, the loan markets actually
(16:49):
operate, because, like you'resaying, there's massive
inefficiencies, there's wildlydifferent things that sort of
the end person is getting.
What are you seeing that you'dlike other people to sort of
know?
Speaker 2 (17:03):
It's a good question, a little bit of a tougher one,
I think, over the last 15 yearsor so.
So there haven't been majorchanges to the federal student
loan system in 15 years, andover the last 15 years the
federal student loan optionshave been there to fill the full
(17:24):
bill up to the point of need.
And if that changes, then whichit seems likely to the
importance of getting involvedin helping your students find
alternatives to help pay forschool just goes up
significantly.
(17:44):
For a while now I don't want tosay for the last 15 years it's
been objectively true thatfederal student loans are the
best product for the vast, vastmajority of people.
It didn't really make sense todo a lot of work to find a
private alternative for peoplestudents and other folks who
(18:09):
have been, just because of theirbackgrounds and credit history
and they've been working, ableto qualify for much better
private rates in a lot of casesthan the Grad Plus program.
And so our business has madesense and moving forward.
That just completely flipswhere it's.
Instead of a product that helpspeople save money, it's going
(18:30):
to become a product that'sneeded to help people actually
afford to go to school, certainthat the amount of tuition money
(18:54):
that you're budgeting to comein every year is able to come in
every year unless you're ableto find ways for people to
qualify for funding in order topay for your school, and it's
going to happen pretty quickly.
The general expectation is thatsome changes might happen to
this bill, but that, whateverchanges might be contemplated,
(19:15):
the final version will be inplace by the end of September,
and that would only likely leavebetween when everything is set,
when people start applying forloans to pay for a school, for
everybody to figure out what'sgoing on and figure out what to
do.
And so if there's just onegeneral takeaway I could put
(19:37):
here and sort of be long-windedabout this, it's that it's
important to prepare early andto get your ducks in a row to
figure out what your plan ofaction would be if these things
happen, and to know that youwill likely need to be
communicating something topeople who are applying in q4,
(19:59):
who would be enrolling in fallof 2026, and I would expect a
lot of people to be veryconcerned about what their
ability is to pay for everyschool in just a couple of
months.
Speaker 1 (20:15):
Yeah, it's well said.
Can you break down some of themechanics of what the
negotiating process looks likeyou on behalf of the students,
and how you're sort of walkingpeople through that?
Speaker 2 (20:27):
Yeah.
So let me start on the gradside.
So we classify ourselves as amember organization, like Costco
or AAA, and it allows us toprovide our members with
something of it as adifferentiated rate map than
going directly to a lender.
(20:47):
So when someone is coming toJuno on the grad student side,
I'll just start with whatthey're seeing and then we'll
talk about how we actually getthere.
So what they're seeing whenthey check their rates on Juno
is still similar lenders thatthey could find directly, but
the rates that they're gettingthrough Juno are lower than if
(21:10):
they go directly to those samelenders' websites, and so that
process is interesting.
It's a little bit weird forpeople to wrap their heads
around sometimes, but you canjust kind of think of it as bulk
discounts that are going to thegroup AAA, discounts going to
the group no-transcript, whichis even more important next year
(21:57):
and beyond.
The more competition there isin the market, the more capital
there is for students.
Lower rates get for studentsand for parents, and so that is
a lot of what we're trying to do.
So that negotiation processlooks like asking lenders to
give us a lot of insight intoexactly how they would
underwrite our group.
What rates are people expectedto get and how can we structure
(22:22):
offers that make the vastmajority of people better off?
And then making sure that we'reable to get our partners to add
this component that we like tocall a fairly comprehensive rate
match process, so that ifsomebody does find a lower rate
from somewhere else, we're stillable to offer them a true rate
match and the best product forthem.
(22:44):
And on the undergrad side it'shighly similar to that.
Speaker 1 (22:47):
Yeah, very cool.
You've served over 200,000families.
Now, you know you've.
It seems to me that you're, youknow, starting to kind of have
a have the growth curve.
You know, really really go upas you.
You know you've got thisamazing value proposition.
More people are knowing aboutyou.
Are there trends that you'reseeing in the data that colleges
(23:10):
and universities should paycloser attention to?
They're just helpful to know.
Speaker 2 (23:16):
Good question.
Nothing particular stands out.
I'd say the trends that I thinkare happening soon, that are
going to have a really bigimpact on colleges and
universities, have to do withthis bill again, and maybe I'll
(23:37):
just take 30 seconds to explainthe three biggest ones that
might impact the way that, threebiggest ones that might impact
the way that especiallyfinancial aid offices view the
market.
So let's just start on theundergraduate side, the way that
the bill is currently written.
There is a $50,000 lifetime capfor parent plus borrowing per
(23:59):
parent, and so next year youtheoretically might not see a
very big change in fundingsources used to pay for a
college, but if a lot of peoplewho, let's say, use the entirety
of, or the majority of theirlifetime parent plus cap then
(24:19):
don't have the ability to borrowin 2027 and beyond, that's
going to start having a reallybig impact to that.
So I'd say, on undergrad, it'sjust really important to think
two years out and about makingsure you're looking at the
numbers, for how much areparents actually borrowing right
now and what does that mean foryour projected ability to
access federal funding in thefall of the year?
(24:41):
On the grad side, it's kind ofsimilar but it has a really big
impact, a stark one for medicalschools and dental programs.
So the bill, as it's written,has a $150,000 lifetime burn cap
for graduate loans forprofessional degrees like
(25:03):
medicine and dentistry andpharmacy and other things, and
what it kind of means is a lotof medical and dental students
might be fine with access tofunding for a year, maybe a year
and a half, and then quicklyafter that there's going to be a
limitation on what they can get, and it gets more complicated
(25:24):
because what we need to solvenot just the market in general,
but, I think, schools workingtogether and all of the private
lenders in the market is findinga way to create new private
student loan programs that meetthe specific needs of doctors
and of lawyers, and the way thatworks is a lot of doctors not
(25:49):
all they don't get paid a lot.
After they graduate, they'regoing to do a couple of years of
residency and during thatresidency window, before they
start earning their fullsalaries, they don't have the
ability to make full payments onthese loans, especially with
the amount that they need toborrow, and so we need to find a
way for the market to create anextended deferment window or
(26:10):
the ability for doctors to pay amuch lower amount while they
are in residency, and the samething is true for lawyers.
About 20 plus percent of lawyerson a lot of schools end up
doing traditional clerkships.
It's great.
It's a service to society.
It doesn't pay a lot.
They cannot afford to pay backa significant portion of their
loans during that window, so themarket needs to create a
(26:31):
product that lets lawyers defertheir payments for another 12
months after they graduate, andso my hope is that the more
people learn about these issuesand the more action gets taken
about them, the likelier it isthat we're able to solve them
before they become an issue.
But awareness is the firstthing that I think everybody
needs to get around.
Speaker 1 (26:52):
Incredibly well said.
What's the future roadmap looklike for Juno in terms of the
next six 12 months?
And then, how do colleges getin touch if we give you email
address before?
But, um, maybe just a quickcall to action there too, around
like what's, what's the bestway to start working with you
all?
Speaker 2 (27:11):
yeah, please email me at chris.
As many people as possibleunderstand what changes could
look like.
As many people as possibleunderstand what changes could
(27:31):
look like.
I'd love to have theopportunity to have these
conversations and learn more ofwhat your pain points are and
the different ways that we mightbe able to solve them.
Our roadmap at the moment isfocused very much on the three
segments of our business.
So first, it's making sure thatwe're able to continue what we
do on the undergraduate side,which is to get in front of as
many parents as we can everysingle year and help them
(27:54):
understand what the landscape ofstudent lending looks like and
why it's incredibly importantfor them to shop around.
My only mission on undergrad is, all year round, to have as
many parents just learn thatthey should shop around, and
that's more important next yearthan it's been for the last 15.
And so we're working with a lotof different high schools to
(28:15):
run our webinar series and totry to partner with them about
getting the word out.
On the graduate side, we godirectly to students.
We work with almost everystudent organization on several
hundred campuses and we'retrying to get the word out about
why what we do matters and whywe need to create large groups
(28:36):
of lawyers and large groups ofdoctors and dentists, so that we
can convince some lenders tofix the problems that I was just
talking about and allow them todefer loans payments until
after those key life events.
And for refinancing.
I haven't touched on this yet,but to date, there hasn't been a
(28:59):
reason for people with federalstudent loans to refinance them.
For the most part, many peoplehave been able to get a lot of
benefits from using federalstudent loans, and if they
refinance them to the privatemarket, they lose those benefits
, and some of those benefitshave meant that people have been
able to not make significantpayments for quite some time.
(29:21):
Now, as these changes I'mtalking about go into effect, a
lot more people are going tograduate with private student
loans, and my favorite thingabout the student loan market is
when you can refinance aprivate student loan, because
all it really means is some bankgave you a loan while you were
in school and they took the riskthat you would find a job.
(29:45):
Now that you've graduated andyou've found a job, you were in
school and they took the riskthat you would find a job.
Now that you've graduated andyou've found a job, you're
viewed as generally less risky,and there are other banks that
are willing to give you a loanat a lower rate for the same
term and there's typically nofees involved.
So it really is something thatpeople should be doing and
moving forward.
Many more people will want toand need to do so.
(30:11):
To sum it all up, if we canjust figure out a way to
convince people and to letpeople know that, a they need to
shop around and, b they need tocontinue shopping around even
after they graduate to keepbringing their rate down, then
we can help a lot of people savea lot of money over time and
make what is now a prettydifficult paying for college
experience just a little biteasier.
Speaker 1 (30:31):
Incredibly well said, chris, and I think that's a
great place to end it.
Chris, I appreciate you, thankyou.
Thank you, mike, reallyappreciate it.
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