Great Lakes Student Loans Review 2019

Great Lakes Student Loans

Great Lakes is one of the several servicers of federal student loans. This is the organization that you will have to deal with when handling your student loans. They are tasked with administering student loans, taking your payments and adjusting your payment terms should you need some changes implemented.

Of all the loan servicers available, Great Lakes is one of the few that do a decent job. Based on data from the Consumer Financial Protection Bureau, Great Lakes has the fewest complaints when compared to its competitors. Better Business Bureau also gave Great Lakes an A+ rating which goes a long way to show just how great the organization is.

In 2018, Great Lakes was acquired by Nelnet which, sadly, has more complaints per borrower. This means that the quality of services rendered by Great Lakes might reduce in the future and that’s not the worst part. If you took out a federal loan, you wouldn’t be able to switch to another servicer which means that you’ll be left stuck with Great Lakes. The only option that you will be left with is to refinance the loan.

Refinancing a student loan means that you will be taking another loan from a private lender. The lender will pay off the federal student loan on your behalf. You’ll then be paying off the private lender instead of your original servicer. However, refinancing is not advisable because you will lose federal loan protections and benefits including PSLF.

Repaying your Student Loans with Great Lakes

Great Lakes student loans repayment are made online. You will have to visit their website and sign up to create an account. This requires you to submit information such as date of birth, social security number and other demographic and financial details.

To make loan repayments easier, Great Lakes have created an automated system that deducts the payments directly from your bank account. Take note that this is strictly optional and will only be activated if you sign up for the program.

Great Lakes just like other federal loan servicers, gives you eight repayment options

  • Standard Repayment Plan

Great Lakes will automatically enroll you into the standard loan repayment plan if you don’t apply for the other options or in case you don’t qualify for any other plan. Standard repayment plan can be used for loans like subsidized and unsubsidized federal Stafford loans, direct subsidized and unsubsidized loans, PLUS loans and all Consolidation Loans. The payments under this plan are in fixed amounts and should be cleared in 10 years. The terms under consolidation loans might extend this period to 30 years max. Everyone qualifies for the Standard Repayment Plan plus you will end up paying less over time. It’s not the best option if you are looking for Public Service Loan Forgiveness though.

  • Graduated Repayment Loan

This is designed for the same types of loans as the ones covered by the standard repayment plan. The difference is that the repayments are usually low in the initial stage, but they increase in every two years. The plan is also designed to ensure that the entire loan is cleared in 10 years unless it’s a consolidation loan which can be repaid in 30 years. All borrowers qualify for this plan, but they will end up paying more over time compared to the standard plan. It is also not a qualifying repayment plan for Public Service Loan Forgiveness.

  • Extended Repayment Plan

The plan works with all loans just like the other two options. The payments here may be fixed or graduated, but they are all formulated to allow you to clear the loan within 25 years. The qualifications under this plan are stricter compared to the other two above. Direct and FFEL loan borrowers must have over $30,000 outstanding loan to qualify for this plan.

  • Revised Pay As You Earn Repayment Plan (REPAYE)

This plan can be used with Direct Subsidized and Unsubsidized loans, direct Plus loans and direct consolidation loans which don’t include PLUS loans made to parents. The monthly payments here are just 10% of the discretionary income. You are also asked to update the data on your family size and income every year. This data is used to calculate and readjust your monthly payments appropriately. The loan debt or income of spouses will also be considered in case you are married, and these are done whether you file tax returns separately or jointly. Under REPAYE, outstanding balances are forgiven if you the loan is not cleared in 20 years for undergraduate study loans or 25 years for graduate or professional study loans. You will pay more over time under this plan compared to the standard plan. Income tax may be applied on any balances forgiven. REPAYE is a good option if you want PSLF.

  • Pay As You Earn Repayment Plan (PAYE)

The eligible loans here are the same as the ones covered under REPAYE. Monthly payments are still 10% of your discretionary income, but they won’t be more than what you’d have paid under the standard 10-year repayment plan. You are also required to update your family size and income, and the data will be used to recalculate your payments. They will also consider your spouse’s loan debt or income if you are filing joint tax returns. Outstanding balances will be forgiven in case the loan isn’t cleared after 20 years. To qualify for PAYE, your debt must be higher than income; you must be a new borrower on/from Oct 1, 2007, and the loan must have been disbursed on/after Oct 1, 2011. Under PAYE, you will end up paying more over time, and an income tax may be applied on any amount forgiven. It’s also a good option for PSLF.

  • Income-Based Repayment Plan

Eligible loans include direct subsidized and unsubsidized loans, subsidized and unsubsidized federal Stafford loans, direct or FFEL consolidation loans and all PLUS loans to students. FFEL or Direct PLUS loans made to parents do not qualify in this plan. The monthly payments are either 10% or 15% of your discretionary income. The percentage will be selected depending on when you received the first loan, but in any case, the payment will never be more than what you would have paid under the standard repayment plan. Every year the payments will be recalculated based on the updated data on your family size and income. Your spouse’s income or loan debt will only be considered if you are filing a joint tax return. All balances are forgiven after either 20 or 25 years. The exact duration will depend on when you received your first disbursement. Amounts forgiven might be subjected to income tax. You will also pay more over time under this plan than the standard repayment plan. Good option for PSLF.

  • Income Contingent Repayment Plan (ICR)

Eligible loans include direct PLUS loans made to students, direct subsidized and unsubsidized loans and direct consolidation loans. Monthly payments will either be 20% of your discretionary income or the amount payable in a fixed payment over 12 years calculated according to your income. They will select the lesser amount between of the two. You are asked to update data on your family size and income every year. This information is used alongside your Direct Loans to recalculate the payments every year. Your spouse’s loan debt or income will be considered if you are paying Direct Loans or are filing tax returns jointly. All balances are forgiven after 25 years. Income tax may be applied on the balances forgiven. You will also end up paying more over time than the standard repayment plan. ICR is a good option if you want PSLF.

  • Income-Sensitive Repayment Plan

eligible loans are subsidized and unsubsidized federal Stafford loans, FFEL Plus Loans, and FFEL consolidation loans. The plan is strictly available for FFEL program loans that are not eligible to PSLF. Monthly payments are calculated depending on your annual income. They are then spread out to ensure that you clear the loan within 15 years. The formula applied here varies from one lender to another. You will pay more over time under this plan than the standard repayment plan.

It is vital to explore through all these options and do your calculations. You should then use the figures you get to make an informed decision on which plan works best for you.

Cons of Great lakes

Great Lakes is a good option, but there are several issues you need to be aware of:

  1. Sometimes the organization may handle the payments inaccurately. Payments may be misallocated, and false late payments may be reported. Making extra payments may also result in complications. You must always keep track of your payments and raise disputes as soon as you come across inaccurate data.
  2. Changing the repayment plan may also be difficult. Additionally, some people may successfully change the plan, but then it might not take effect immediately. You will have to raise a dispute with supporting documents when this happens.
  3. Many people have also complained of receiving incorrect information when seeking forbearance and deferment.

Another good thing about dealing with Great Lakes is that you also have different avenues to raise your complaints. You can report any issues about this organization through the Better Business Bureau, Consumer Financial Protection Bureau or the SA Feedback System. These organizations are highly responsive and should help to fix all the issues you have in time. Minor errors can also be addressed directly to Great Lakes.

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