Great Lakes Student Loans – Are They Legit?

Great Lakes – Student Loan Servicing Review

Student Loan Borrowers sometimes receive a surprise email or postal mail referring to their Great Lakes Loans.  Yes, they have taken out student loans, but they’ve never heard of Great Lakes before.  They certainly didn’t borrow any money from them.  So, what gives? 

A word of advice – If you have taken out a student loan, you should become familiar with the loan servicing company Great Lakes Higher Education Corporation, or Great Lakes for short.

Anyone who is contacted by a company they have never heard of – claiming the owe thousands dollars – has every right to be skeptical.  But, if you’ve taken out a student loan and you’re suddenly being contacted by an organization called Great Lakes, you can relax a bit.  Rest assured, Great Lakes is a legitimate company.  It is actually one of the country’s biggest student loan servicers. They service more than $238 billion in student loans for over 8 million borrowers and work with 6,000 schools and 1,100 lenders. The company employs more than 2,000 people nationwide.  They take pride in giving back to their community.  In fact, the company slogan is ‘Doing what’s right to change lives for the better’. The company has a philanthropy arm that offers scholarships, grants, and college advising.  They have  committed nearly $225 million to these efforts in the past fifteen years.

Beware of Scams 

Great Lakes Borrowing Services

Great Lakes Loans Service is a non-profit organization based in Madison, Wisconsin, and have been in business since 1967.  As such, they are not a traditional lending institution.  They do not initiate any of the loans they service.   Instead, they act as an intermediary and guarantor between the borrower (which is you) and the original lender.  The lender was either the federal government, or a private lending company depending on your original loan.  Once the loan enters repayment, Great Lakes steps in to service the payments.  As a loan servicer, Great Lakes is neither wholly private nor federal. The company actually services both private and federal loans.  So, the type of loan you have does not change once you start paying it off with Great Lakes.

Great Lakes borrower services manage student loans in a number of ways.  Here are some things you should know about the company:

• They Monitor your school enrollment.
• Help you find the best repayment plan.
• Process your student loan payments.
• Lowest Number of Complaints – Great Lakes has received the lowest number of complaints compared to all other large federal loan servicers.  This is based on Consumer Financial Protection Bureau (CFPB) data.
• A+ rating with the Better Business Bureau.

“Great Lakes is based in Madison, Wisconsin, (part of the Great Lakes region) though it offers student loan servicing nationwide. It is one of nine private companies that contracts with the U.S. Department of Education to manage the billing of federal student loans.  Great Lakes serviced $251.2 billion in federal student loans with more than 8 million borrowers as of March 31, 2019. Nelnet, a loan servicer that bought Great Lakes in 2018, had another $192.6 billion.1For the 2018-2019 school year, Great Lakes was allocated 17% of new student loan volume—the second-largest portion.”  Source: thebalance.com

Making Great Lakes Student Loan Monthly Payments 

Making your Great Lakes student loan payments is pretty straightforward.  Great Lakes Borrowers have a number of options when choosing how to pay.

• Postal Service – Traditionalists have the option to pay with a check or money order through the US Postal Service.
• Over the Phone – You can also pay over the phone, either by speaking to a representative during business hours or using the automated system at any time.
• Online Payment – Those who would rather use a computer can use the Great Lakes website to make payments with a debit card, and the savviest borrowers may even want to pay via the
• Mobile App – Smart phone users can download a mobile app and make payments via their mobile phones.

Credit cards are not acceptad for payment.  Those hoping to build their credit or earn rewards by using a credit card for Great Lakes student loan payments are unfortunately out of luck.  You need to use a debit card to pay your bill or one of the four methods listed above.

Autopay for Great Lakes Loan Payments

Autopay is a good idea to set up as soon as it makes sense for your budget.  As an incentive, you receive a 0.25 percent interest rate reduction for establishing Automatic Payment for your Loans. Some private lenders may also offer this discount, so it’s worth checking.  Autopay is generally a good idea for a number of reasons.

• Interest Rate Reduction – 0.25%
• No Missed Payments – Automatic debits reduce the chance that you’ll miss a payment, which is easy to do—especially if you’re managing multiple loans.  If you’ve been on autopay for a while and could use a refresher on what you’re actually paying, the
• All Account Information is Available Online – The Borrower Portal on mygreatlakes.org will give you access to everything you need to know and more.
• You can Adjust Payments at any Time – With Autopay, you’re not stuck with the original amount you set up.  You can change your payments if your income changes or you have extra funds to put towards your loan.  It’s easy to log on and change your payment amount.

Great Lakes Loans –  EIGHT Different Repayment Plans For Borrowers

With federal loan servicers, you are given eight different repayment options for your student loans. By default, Great Lakes will automatically enroll you in its standard repayment plan if you don’t apply or qualify for other repayment options.  The standard repayment plan has fixed payments spread evenly over 10 years.   However, be sure to explore the other repayment plans.  The different options could help you manage payments according to your budget.  You may find you even qualify for public service loan forgiveness (PSLF).

The different plans may seem similar, but each has distinct advantages and disadvantages. As a result, choosing the best option for your personal situation is important.  Again, if you don’t choose a repayment plan, your loan servicer will place you on the Standard Repayment Plan.

Great Lakes Student Loan – Eight Repayment Plans are:

• Standard Repayment Plan
• Graduated Repayment Plan
• Extended Repayment Plan
• Revised Pay As You Earn Repayment Plan (REPAYE)
• Pay As You Earn Repayment Plan (PAYE)
• Income-Based Repayment Plan (IBR)
• Income-Contingent Repayment Plan (ICR)
• Income-Sensitive Repayment Plan

Standard Repayment Plan

The Standard Repayment Plan features fixed payments made for no more than 10 years. This plan has the shortest repayment period.  It saves you money over time because you pay the least amount of interest over the life of the loan. However, the monthly payments may be slightly higher than what you’d see under other plans. The Standard Repayment Plan is good for someone looking to pay off their loans as quickly as possible, or someone who has a high income and doesn’t want to face even larger monthly payments on an income based repayment plan. This plan should NOT be used by those seeking Public Service Loan Forgiveness.

Plan Summary

• Pro:  Less Interest – 10-Year repayment time means you’ll pay less interest over time.
• Pro: Fixed payment Amount – so you know exactly how much you owe every month.
• Con: Higher Monthly Payments – than other plans.
• Con: If Your Income Drops – You are Saddled with Fixed Payments, so loan repayment may further strain your finances.

Graduated Repayment Plan

The Graduated Repayment Plan features lower initial payments that increase every two years. Similar to the Standard Repayment Plan, the repayment period is typically no more than 10 years. Under this plan, the range of your monthly payments will never be less than the amount of interest that accrues monthly or more than three times greater than any other payment.  The Graduated Repayment Plan is good for someone looking to pay off their loans as quickly as possible, while having a low starting income that is expected to grow throughout the 10 year repayment period. This plan is NOT recommended for those seeking Public Service Loan Forgiveness because your loan will already be paid off in 10 years.

Plan Summary

• Pro: Lower Initial Payments – With a 10 year repayment period.  This allows you to free yourself of student debt more quickly than other options.
• Pro: Payments Rise Over Time – This allows new graduates to handle student loan payments on entry-level wages upon entering the workforce.
• Con: If your Income Doesn’t Grow – This plan factors in expected income increases.  If income is stagnant, the higher payments toward the end of the loan repayment period may strain your finances.
• Con: You pay Slightly More – The first two years, your initial payments are lower.  As a result, you pay more to cover the interest over the life of the loan compared to the Standard Repayment Plan.

Extended Repayment Plan

The Extended Repayment Plan allows you to extend the repayment period for up to 25 years. Monthly payments may be fixed or graduated and are generally lower than those found in the Standard Repayment Plan and Graduated Repayment Plan.  The Extended Repayment Plan is good for someone looking for a low monthly payment. However, you’ll end up paying a lot more interest over the life of the loan. Someone with a high income but with large financial obligations might also seek this payment plan.

 Plan Summary

• Pro: Lower Monthly Payments – 25 year repayment schedule results in lower monthly payments than the Standard Repayment Plan and Graduated Repayment Plan.  This makes the loans less burdensome on a monthly basis.
• Pro: Payment Flexibility – Monthly payments may be fixed or graduated, which gives you flexibility to decide.
• Con: Not everyone is eligible – You must have have more than $30,000 in outstanding Direct Loans.
• Con: More Total Interest Paid – Due to the longer repayment period, you will pay more interest over the life of the loan, when compared to a shorter repayment plan.

Income-Driven Repayment Plans

There are four different Income-Driven Repayment Plans. According to the U.S. Department of Education, these plans set your monthly payment at an amount that is “intended to be affordable based on your income and family size.”  The payment for these plans is typically a set percentage of your income. Some people may qualify for no monthly payments depending on their income and family size. The repayment period for these plans varies between 20 and 25 years. After the end of the repayment period, any remaining loan balance will be forgiven by the government if your federal student loans aren’t fully repaid yet. According the U.S. Dept. of Education, “periods of economic hardship deferment, periods of repayment under certain other repayment plans, and periods when your required payment is zero will count toward your total repayment period.”

These plans are good for low and lower-income individuals with very high loan balances, because they help keep your payments low. Loan forgiveness at the end of the repayment period is especially helpful for those in the lowest income brackets with high amounts of debt.  Take note: If you are seeking Public Service Loan Forgiveness (PSLF), then you’ll need to pick one of these plans.

Revised Pay As You Earn Repayment Plan (REPAYE) 

The REPAYE plan sets your monthly payment at 10% of your “discretionary” monthly income. Under this plan, your repayment period is 20 years if all of your loans were for undergraduate studies. If any loans were for graduate studies, the repayment period jumps to 25 years.  The REPAYE plan is good for those with high balances and a modest income. It is also a solid plan for an individual who doesn’t mind if their monthly payment is larger than what it would be under the Standard Repayment Plan since there is no cap. Additionally, for those with very large loan balances, the government subsidizes some of the interest that accrues if your monthly payment is not large enough to cover the interest payment.

REPAYE Plan Summary

• Pro: Eligibility – Any borrower with eligible federal loans can make payments under the REPAYE plan.
  • Opportunity for Forgiveness – Loan forgiveness at the end of your repayment period.
  • Payments Decrease if Income Drops – The monthly payments will decrease if your income decreases, keeping the payment affordable.
  • Lowest Monthly Payment – Depending on your income and family size, your monthly payment may be lower than the amount you’d pay under the Standard Repayment Plan.
• Con: Yearly Certification – Each year you must recertify your income and family size, creating additional work on your part.
  • Disqualification – If you don’t recertify your income and family size annually, you will removed from the REPAYE plan.
  • Possibility for Higher Monthly Payments – Depending on your income and family size, your monthly payment might be higher than the amount you’d pay under the Standard Repayment Plan.
  • More Interest – Due to the longer payment period, you may pay more in interest over the repayment period than under other repayment plans.

Pay As You Earn Repayment Plan (PAYE) 

The PAYE plan sets your monthly payment at 10% of your monthly discretionary income.  However, it is never more than the monthly payment you would make under the Standard Repayment Plan. Under this plan, your repayment period is 20 years.  The PAYE plan is good for those with high loan balances. The PAYE plan is different from the REPAYE plan because your monthly payment will be capped at the Standard Repayment Plan level even if your income increases substantially.

PAYE Plan Summary

• Pro: Lower monthly payment than under the Standard Repayment Plan.
  • If your income increases to the point where your monthly payment would be more than the Standard Repayment Plan, your payment will no longer be based on your income. Instead, your payment will be the amount you would pay under the Standard Repayment Plan.
  • Loan forgiveness at the end of your repayment period.
  • Monthly payments will decrease if your income decreases, keeping the payment affordable.
  • Good option for PSLF – Those seeking Public Service Loan Forgiveness.
• Con: Qualification – You can only qualify for the PAYE plan if your monthly payment under the plan is lower than what you’d pay under the Standard Repayment Plan, and if you are considered a “new borrower.”
  • Annual Recertification – You must recertify your income annually, otherwise your payment will be the amount you would pay under a Standard Repayment Plan with a 10-year repayment period, “based on the loan amount you owed when you initially entered the income-driven repayment plan.”
  • More Interest is Paid – Due to the longer payment period, you may pay more in interest over the repayment period than under other repayment plans.

Income-Based Repayment Plan (IBR) 

The IBR plan sets your monthly payment at 10%-15% of your monthly discretionary income, depending on when you borrowed.  But, never more than the monthly payment you would make under the Standard Repayment Plan. Under this plan, your repayment period is 20 years if you are a new borrower on or after July 1, 2014, otherwise it’s 25 years. (Discretionary income is defined as it is in the REPAYE and PAYE program.)

The IBR plan is good for new borrowers who have high balances and want a lower monthly payment. For those who don’t qualify as new borrowers, your payment of 15% of income will mean you pay more than under the PAYE plan. However, higher monthly payments do result in lower interest paid over time.

IBR Plan Summary

• Pro: Your monthly payment will NEVER be more than what you’d pay under the Standard Repayment Plan.
  • If your income increases to the point where your monthly payment would be more than the Standard Repayment Plan, your payment will no longer be based on your income. Instead, your payment will be the amount you would pay under the Standard Repayment Plan.
  • Loan forgiveness at the end of your repayment period.
  • The monthly payments will decrease if your income decreases.
  • Good option for those seeking Public Service Loan Forgiveness.
• Con: You must recertify your income annually – Otherwise your payment will be the amount you would pay under a Standard Repayment Plan with a 10-year repayment period, “based on the loan amount you owed when you initially entered the income-driven repayment plan.”
  • Due to the longer payment period –  You may pay more in interest over the repayment period than under other repayment plans.

Income-Contingent Repayment Plan (ICR)

The ICR plan sets your monthly payment as the lesser of 20% of your discretionary income or what you’d pay under a repayment plan with a fixed payment over 12 years. Under this plan, your repayment period is 25 years. This plan uses a different definition of discretionary income.  For ICR it’s the difference between you actual income and 100% of the poverty guideline for your state and family size. The ICR plan is good for someone looking for a slightly lower payment and slightly longer repayment period than under the Standard Repayment Plan. This plan is only available for those with FFEL loans. Additionally, it does not qualify for PSLF.

ICR Plan Summary

• Pro: Eligibility – Anyone with eligible federal loans can make payments under this plan.
  • Loan forgiveness at the end of your repayment period.
  • Parent PLUS Loan Borrowers – It’s the only income-driven repayment option for parent PLUS loan borrowers.
  • Lower Monthly Payment – Depending on your income and family size, your monthly payment may be lower than the amount you’d pay under the Standard Repayment Plan.
  • Good option for those seeking Public Service Loan Forgiveness.
• Con: Mor eInterest Paid – The 25 year repayment period means you may pay a lot more in interest over the life of the loan.
  • Higher Monthly Payment – Depending on your income and family size, your monthly payment might be higher than the amount you’d pay under the Standard Repayment Plan.
  • You must recertify your income annually.  Otherwise your payment will be the amount you would pay under a Standard Repayment Plan with a 10-year repayment period, “based on the loan amount you owed when you initially entered the income-driven repayment plan.”

Income-Sensitive Repayment Plan

According to the U.S. Department of Education, the Income-Sensitive Repayment Plan is “available to low-income borrowers who have Federal Family Education Loan (FFEL) Program loans.” Under this plan, your repayment period is 10 years. The monthly payment is determined based on your annual income.

Plan Summary

• Pro: 10 year repayment period means that you’ll pay less interest over the life of the loan than loans with longer repayment periods.
• Pro: Monthly payments will decrease if your income decreases.
• Con: Only low-income borrowers with FFEL Loans may qualify.
• Con: Monthly payments will increase if your income increases.  Source: forbes.com

Which Great Lakes Repayment Plan Is Right For Me?

Determining which repayment plan to select depends on several factors.

• Eligibility – You need to check which plans you qualify for. The U.S. Dept. of Education’s site has the eligibility requirements for the different plans.
• Your income, family size, and personal circumstances must also be taken into account. For example, if you have a low income, then an income-driven plan may give you a lower monthly payment that is easier to handle.
• If you plan on pursuing public service loan forgiveness (PSLF), then the Standard Repayment Plan is not a good option.

This student loan repayment calculator is a great way to assess your situation and determine which plan will give you a manageable student loan payment so that you can create a solid plan to pay off your student loans. You’ll want to input your loan amounts and see the estimated monthly payments. You’ll also want to consider your future expected earnings and see which payment plan makes the most sense for you!  Source: forbes.com

Working With Great Lakes

Great Lakes Student Loans – Tips for Borrowers

Take Advantage of Online Tools

Federal repayment options can be overwhelming. Without understanding the various plans, borrowers can struggle to select the right repayment option.  Great Lakes has created a Repayment Planner to make the choice easier.

• The Repayment Planner allows you to see the potential impact each program would have on your loan.
• Eligibility – Lets you determine which plans you are eligible for.  Includes impact of your length of repayment and interest paid under each plan.
• You can access the Repayment Planned a by logging into your Great Lakes online account.

Start Paying as Soon as Possible

Student loan repayment may not be at the top of your list of things to worry about while you’re in school.  Still, it’s a good idea to start thinking about it early. With Great Lakes, you can even start making payments while you’re still in school.  This can give you a valuable head start.  Many loans start accruing interest even while you’re in school.  By beginning your repayment early, you can reduce the amount of interest you will have to pay.  Even small payments, can cut down the total interest that accrues.  This will ultimately get you closer to paying off your loan principal.

Great Lakes Customer Support

Great Lakes offers assistance via Facebook and Twitter – as well as by phone and email.  This can be a great option of you just have a quick question.  Customer Support can help if you’re struggling to make your monthly payments or simply want to talk to someone knowledgable.  Understanding all your options can save you money and provide valuable peace of mind.  You should never have to pay for help with your student loans.  Great Lakes customer support can help you understand and decide on federal student loan consolidation, payment plans, service member benefits, and more.

How to Contact Great Lakes Loans