The Complete Guide to Student Loans for Business School

Two types of student loans

Federal & Private

Federal Student Loans

Federal student loans are offered by the federal government, whereas private student loans are offered by private lenders.

U.S. citizens and eligible non-citizens pursuing their degree can typically access Direct Unsubsidized Loans and Direct PLUS loans (also known as Grad PLUS loans).

Federal student loan interest rates are determined annually based on the May 10-year U.S. Treasury auction and take effect on July 1, remaining fixed for the life of the loan. Federal loans come with a standard repayment schedule and offer a wide range of repayment assistance options.

Direct Unsubsidized Loans are more affordable than Direct PLUS loans; however, MBA students are limited to borrowing $20,500 per year through the Direct Unsubsidized Loan program. Historically, any additional funding needs were covered by Grad PLUS loans, but for new borrowers after July 1, 2026, Grad PLUS loans will no longer be available under current MBA student borrowing guidelines.

This will create a significant funding gap for many MBA students, who will need to supplement federal loans with private loans or rely entirely on private loans to finance their MBA.

For students who start a new program on or after July 1, 2026, the federal loan limits are:

Private Student Loans

Private student loans are offered by private financial institutions such as banks, credit unions, or other non-governmental lenders. To apply for private student loans, students must apply directly through various lenders. After you submit an application and receive approval for a private student loan, you typically will be presented with multiple options such as:

• Variable or fixed interest rates
• Loan term (also known as repayment term)
• Repayment plan

In addition, you will see the interest rates and APR (Annual Percentage Rate) offered to you as well as any fees associated with the loan. The APR includes both the interest rate and fees, giving you the true cost of borrowing. It's important to understand the costs and terms associated with your loan options. The following sections will help you understand any student loan options presented to you.

What's the Difference?

Federal student loans have less stringent approval requirements, whereas private student loans include a credit review to determine the borrower's anticipated ability to pay. This helps determine the interest rate.

Additionally, there are benefits unique to the federal program such as Income-Driven Repayment plans and Public Service Loan Forgiveness.

As always, there is a tradeoff. If you have good credit, going with private loan options could save you thousands of dollars in interest and origination fees, though you will lose some federal loan repayment protections.

If you have a good credit score, private student loans can often offer lower interest rates and fees than federal loan options.

Career Examples

MBA graduates often command higher salaries that can make private loan rates more manageable, but weigh this against federal protections if you're considering nonprofit or public sector roles. Your career trajectory and credit profile may guide whether private loans' potential savings outweigh federal programs' flexibility.

Feature Comparison

Interest Rates & Fees

Interest Rates

When it comes to the actual interest rates, don't assume that all lenders are the same. Pricing can vary significantly from one lender to another.

At Juno, we bring multiple lenders to the table and have them compete against each other, allowing us to negotiate lower interest rates for our members. To learn more, see the offers Juno has negotiated for MBA students.

Fees

Not all private student loan lenders charge the same fees. Some lenders may charge:

Application fees

A fee charged by a lender to apply for the loan.

Origination fees

A fee charged by a lender when you first take out a loan.

Variable vs. Fixed Interest Rates

A variable interest rate can fluctuate over the course of your repayment period as the index selected by the lender fluctuates up or down. The most common index used for student loans is the Secured Overnight Financing Rate (SOFR) index. As this changes, so will your interest rate.

A fixed interest rate remains the same for the life of the loan. The interest rate you receive when you take out the loan will be the same interest rate you have throughout the entire repayment period.

While the variable interest rate may be cheaper on the day of your application, you should consider your personal tolerance for the risk that it could go up or down over the years.

What Should We Do?

The Planning Process

The first thing to decide is whether student loans make sense. Often, students don't have a choice - they need to take out loans. Sometimes, people weigh the difference between using savings or loans and end up taking out loans if they can get a competitive rate.

If you've decided to take out a loan, there are a few considerations.

When

It's good that you've started thinking about your plan in advance. You don't necessarily have to start the actual application process until about a month prior to the tuition billing due date (set by the school). If you're starting school in the fall, beginning the application process in June or July is fairly standard, but earlier is okay too.

What

When choosing their loan option, students should consider what their monthly payment will look like post-graduation and choose a loan term that will most appropriately fit their expected budget.

We expect most students to choose a fixed interest rate with a deferred or fixed minimum / flat repayment plan. While the deferred repayment plan puts a hold on payments while in school, interest will continue to accrue, making the option more expensive over time.

Alternatively, you can choose the interest-only or fixed minimum / flat repayment plans (see the definitions under Repayment Options). Since payments start while you are in school, you would be paying a bit less in interest over time and can often take advantage of the autopay discount immediately.

Repayment Options

Loan Term or Repayment Term

The loan term is the amount of time you will take to repay the loan. Paying the loan back sooner will result in a lower overall total cost, but it will also result in larger monthly payments. Choosing a longer term will offer a lower monthly payment, but it will be more expensive overall. The terms offered by lenders vary, and some lenders assign you a term without giving you the choice.

Repayment Options

The biggest decisions when it comes to choosing a repayment option are:

1. Whether you want to make payments while you are in school or defer repayment until you graduate.
2. How much you want your monthly payments to be while you are in school.

Making in-school payments helps reduce the overall cost of the loan as you start paying down interest sooner. Some lenders will give you more options than others.

*Interest Only and Full Repayment In School options require a cosigner or qualifying income.

Getting the Lowest Rates

Autopay Discounts

Many, but not all, lenders offer an autopay discount, which can reduce your interest rate for making payments using automatic payments.

Reminder: the autopay discount usually only applies when you have payments due. If you select a repayment plan which does not have payments due in school, the autopay discount only begins after you've graduated and entered repayment.

Juno partners often offer these.

Special Discounts

Some lenders will offer unique opportunities to reduce your interest rate even further. For example, you may see a "relationship discount", which can reduce your interest rate for using additional products or services offered by the same lender.

Cosigners

A cosigner is a person who is obligated to pay back the loan just as you, the borrower, are obligated to pay.

Many private student loan lenders will require borrowers to have a cosigner. Others may not offer their lowest rates to borrowers who do not have cosigners.

The Private Student Loan Process

It is generally a best practice to start the application process at least 30 days before your program's tuition due date, though you can apply earlier as well. That being said, some students are able to get through the entire process within a week.

Here are the steps involved:

1. 1

   Apply

   You'll enter your personal information, school information, and requested loan amount in order to apply for a loan. If you're applying with a cosigner, you'll either enter their information at the same time as yours, or ask the lender to contact your cosigner for their information.

   We recommend checking your rate through Juno during this process. We negotiate rates that can be lower than going directly through a lender and may have a rate match guarantee program with bonus cashback.

2. 2

   Approve

   Once you submit your application, the lender will do a hard credit check. It will come back with one of three results: approved, denied, or eligible with a creditworthy cosigner.

   Some lenders have an instant process, while others require a manual check which can take a few days. In other cases, the lender may request additional documents to review, like paystubs or 1099s.

3. 3

   Accept

   If you are approved, your next step is to choose loan terms and accept the loan. This is where you are able to choose your:

   Variable or fixed interest rate Loan term (length of the loan) Repayment plan

   You'll sign the remaining documents to confirm the terms and conditions.

4. 4

   Wait

   The rest of the process generally occurs between the lender and your school (unless there are any issues you need to be notified about). The school approves your:

   Enrollment status Anticipated graduation date Loan amount vs. cost of attendance

   Schools can either certify the loan as is, or request changes based on the student's status.

   Some schools require you to confirm before they can certify your loan. Be sure to check both your student portal and email to see if there are any action items for you to complete.

   The process takes between 1 day and 2 weeks, but could take longer depending on how early you apply (some schools won't start certifying until tuition bills officially come out) and your school's certification process. We recommend calling your financial aid office for guidance.

5. 5

   Disburse

   Loan disbursement is how your school receives the funds to pay for your education. Typically, the lender sends funds directly to your school, not the borrower.

   When does this happen?

   Usually, the disbursements will be sent once per semester if you applied to cover more than one term. Disbursement dates are set by your university around the beginning of the semester.

   Any loan amount above the cost of tuition would be transferred to you by the school as a refund. This can be used for things like rent and textbooks. The financial aid office will handle this.

   Interest on your loan doesn't start to accrue until the funds are disbursed, and if there are multiple disbursements, interest only accrues on funds already disbursed.

6. 6

   Repay

   Payments for your loan are made through your chosen lender's portal.

   Depending on the repayment plan you have chosen, you may need to start making payments as soon as you start school (in-school payments) or you may not need to make any payments until after you graduate (deferred payments).

   Most lenders offer a discount for automatic payments, and you'll qualify for this whenever your loans have an active payment status.

Private student loan process complete!

Make an Informed Decision

We hope this guide has equipped you with enough knowledge to make an informed decision about your student loans.

If you have any questions that weren't answered here, drop us a note at hello@joinjuno.com and let us know. We'd be happy to help.

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