Life is full of choices.
Unfortunately, your student loan servicer is not one of those choices.
That is right – your loan servicer for your federal student loans is essentially “luck of the draw.”
But this does not mean that your student loan servicer can provide you with poor service.
Because you DO have the option to switch if you are unhappy with your current situation.
You can make the switch simply by refinancing your student loans.
In fact, student loan refinancing can save you TONS of money over the life of your loan.
You save money by replacing your existing student loan debt with a new, lower-cost loan.
Additionally, it does not cost you a dime to refinance your student loans.
Today, we are here to examine one of the most prominent student loan servicers.
Do you have a loan being serviced by Great Lakes?
- If so, pay close attention.
- If not, still pay close attention to see if you can relate.
What is Great Lakes?
Great Lakes, or Great Lakes Educational Loan Services, Inc., is one of the most well-known student loan services in the United States.
The company has been in business for over 50 years.
Great Lakes handles payments for millions of outstanding student loans.
These loans include ones issued by the Department of Education, as well as private student loans.
The free services offered by Great Lakes include things like:
- Tracking your loan balance and assisting with billing
- Changing repayment plans
- Applying for loan forgiveness programs
- Loan consolidation
Although Great Lakes is one of the largest loan servicers…
…does that make them your best option?
Many people think so based on name-recognition alone, but we are not so sure.
The company boasts an A+ rating on the Better Business Bureau.
But upon further investigation, Great Lakes also receives a significant number of customer complaints.
If you look at Consumer Affairs and the Consumer Financial Protection Bureau, you will find many similar complaints.
We cannot verify that all complaints are legit…
…but where there is smoke, there is fire, right?
So, let us know if you have experienced any of the Common Complaints Against Great Lakes firsthand.
Because after analyzing many of these complaints, we noticed several unsettling trends.
These trends seem to go against the Great Lakes promise of “Doing what’s right.”
Are these complaints all true?
Repayment with Great Lakes
This section will give you a general idea of how Great Lakes operates.
When you take out a student loan, you begin with the standard repayment plan.
This plan divides your payments equally over 10 years.
The standard repayment plan minimizes interest but may result in higher payments.
However, if you cannot make these higher payments…
…Great Lakes offers several repayment and postponement options.
Here are the repayment and postponement options:
- Graduated Repayment Plan
The graduated repayment plan starts with lower payments that increase over time.
These payments increase by 20% every 2 years.
The final two years of payments will be less than or equal to three times your original payment.
This plan is an excellent plan if you expect your pay to increase over the next 10 years.
Graduated repayment does not minimize interest, but is more practical in relation to your earning power.
- Income-Driven Repayment Plan
The income-drive repayment plan depends on your financial situation.
The federal government offers 4 income-driven repayment plans:
- Pay as You Earn (PAYE)
- Revised PAYE
This plan is best if your debt is high compared to your income.
The basis for this plan is your income, family size, home state, and federal student loan type.
- Deferments and Forbearances
During your repayment, there may come a time when you have trouble making payments.
In this instance, deferments and forbearances are a godsend if you need to postpone payments.
You can use a deferment to defer payments for up to 3 years.
Deferment is available for the following situations:
- Back in school at least part-time
- Unemployed (or working less than 30 hours per week and seeking full-time work)
- Actively serving in the U.S. military or Peace Corps
- In a graduate fellowship program
- Temporarily having a financial hardship
You can use a forbearance if you are unable to postpone your payments by using deferment.
Forbearance is approved at your servicer or lenders discretion.
Your servicer or lender may set the time period.
Common Complaints Against Great Lakes
Now that you understand what Great Lakes does…
…we want to talk about the issues customers are having with the company.
However, these issues are not exclusive to Great Lakes.
If you do not use Great Lakes, these complaints may still sound familiar.
So, read on, and we will tell you how you can resolve all of your problems once-and-for-all.
Without further ado…
Here are the most common complaints against Great Lakes Educational Loan Services, Inc:
1. Failure to Apply Loan Payments
You work hard for your money. You put plenty of that money toward your student loan.
And sometimes, you pay extra on your loan.
You do this to lower your principal and save money on interest payments.
How do you pay off your student loans:
- Snowball method: In order of balance size?
- Avalanche method: In order of highest interest rate?
The more practical method seems to be paying down the higher rate first.
And Great Lakes promises to allocate your extra payment to the loan with the highest interest rate.
Great Lakes has not been following through with this claim 100% of the time.
Numerous borrowers are claiming that their “extra payment” is not being applied to the loan with the highest interest rate.
Instead, the money is being applied to a different loan (i.e., the wrong loan).
Everyone makes mistakes – no big deal, right?
But, when borrowers informed Great Lakes of the erroneously applied payments…
…the payments were still applied to the incorrect loan.
Borrowers have even reported providing specific instructions regarding their payments only to have the payment misapplied.
Paying off student loans is hard enough!
You should be rewarded for your discipline to pay down your loans.
If not rewarded, paying down your loan should not lead to headaches and confusion.
Mistakes are one thing, but there is no excuse for the same recurring issue.
Here is What to Do:
We recommend logging into your student loan account and checking after making payments.
If you notice your payment is misapplied (or not at all), contact Great Lakes immediately.
Even if the company cannot fix past payments, they must fix things going forward.
2. Turning Off Auto Pay
Auto-pay is an absolute life-saver. You can set it and forget it…
…or can you?
Auto-pay is great for loan servicers because they know they will get their money each month.
In fact, certain loan servicers will reduce interest for borrowers that enroll in auto-pay.
Great Lakes offers a 0.25% interest rate reduction for auto-pay borrowers.
Are you currently enrolled in auto-pay? Would this rate reduction incentivize you to enroll?
Regardless, multiple borrowers have reported their auto-pay being inexplicably turned off.
This error results in borrowers missing their payments and rate reduction.
What is the purpose of auto-pay if you must continuously check that it is working?
Here is What to Do:
Contact Great Lakes if your auto-pay is not working.
There may be several reasons for this, including change of bank account or system-wide outage.
Be sure to correct the error and make the payment as soon as possible.
3. Failure to Process Income-Driven Repayment Plans
Income-Drive Repayment (IDR) plans depend on your current financial circumstances.
For this reason, IDRs can be hugely beneficial because you pay what you can reasonably afford.
But how useful is an IDR if your application never gets processed?
The failure to process your application can set you back months as a borrower.
These applications require tax documents, forms, and other information.
Significant processing delays (or losing your application entirely) are a common complaint being levied against Great Lakes.
Borrowers have reported long wait times and evasive answers from customer representatives.
Some even re-applied for an IDR only to see the same result.
This result is worrisome because borrowers need these plans to manage their loans.
And, through no fault of their own, they are left without a paddle.
Here is What to Do:
Keep in contact with Great Lakes.
Be 100% positive that your forms made it to your servicer.
Better yet, once you submit the forms, follow-up for confirmation that they received your documentation.
You can request forbearance if your due date is coming and your plan has not been switched yet.
4. Putting Borrowers in the Wrong Repayment Plan
For borrowers, being placed in the correct repayment is very important, especially those in danger of defaulting.
Thus, when the servicer places the borrower in the wrong plan, it can cause significant issues.
For example, an income-driven repayment plan can be costly for those that do not require the plan.
On the other hand, the standard repayment plan can be impossible for those that require an income-driven repayment plan.
Regardless of the repayment plan you choose, your plan needs to be applied correctly.
Several customers have reported being placed in the wrong repayment plan by Great Lakes.
Here is What to Do:
You should always follow-up on your accounts to ensure they are correct.
Do not assume that you are enrolled in the correct plan.
If you did not request a change in your plan, contact Great Lakes immediately.
5. Providing False Information to Credit Bureaus
You need to guard your credit with your life.
Your credit impacts your ability to purchase a car, buy a home, get a job, and access funds, in general.
Therefore, you need to make payments on time, every time.
But what happens when you are doing everything right, but your credit is still getting hit?
There is nothing more frustrating than an erroneous negative mark on your credit.
Multiple borrowers claim that Great Lakes falsely reported their account as delinquent or in default.
These reports can seriously mess up your credit score and should not be taken lightly.
If the complaints are accurate, borrowers with good-standing loans are being punished without cause.
Here is What to Do:
You should always monitor your credit.
If you notice an error, be sure to contact Great Lakes immediately.
The company should be able to remove negative remarks.
If not, you can get a note added to your credit report.
6. Attempting to Collect from People Who Do Not Have Loans with Great Lakes
This is undoubtedly one of the stranger complaints we came across.
Customers allege that Great Lakes, or their collection agencies, have attempted to collect loans that people never took out.
Many servicers make the mistake of contacting the wrong person.
We realize that mistakes do happen.
These mistakes can be a result of same (or similar) names, phone numbers, and addresses.
However, at least one customer stated that they found a loan on their credit report that they did not take out.
Great Lakes reported the loan, but the company did not provide adequate information identifying the real borrower of the loan.
How is this possible?
Here is What to Do:
If you find a loan on your credit report that you do not own, contact Great Lakes and the credit bureau immediately.
Additionally, there have been other reports of customers being contacted by collection agencies on loans in which they are not the responsible party.
If you receive collections call by mistake, contact Great Lakes immediately to report the matter.
Check Your Great Lakes Student Loans
As you may have noticed…
…you should be checking your student loans frequently.
If you catch the above mistakes early-on, you may have time to do some damage control.
If you wait too long, the mistake (even if it is not your fault) will be more challenging to fix.
You can view your Great Lakes Loans directly on their website: https://mygreatlakes.org/educate/login
Refinance Your Great Lakes Student Loans
You should not need to check your student loans daily.
Perhaps your lack of confidence in Great Lakes requires you to check your student loans too frequently.
If this is the case, you can refinance your student loans in search of better service.
When you refinance your student loans, you take out a new loan to replace your Great Lakes student loans.
These loans may even come with lower interest rates.
If you are entirely lost, consider hiring an advisor (e.g., a CFA) to help get you back on track.
If you are ready to refinance on your own, we recommend you check out these resources:
Student Loan Refinance Marketplaces
You can use student loan marketplaces to compare student loans and find the one that is best for you.
Both services are completely free and highly intuitive.
You can use Credible to compare your refinancing options in less than 5 minutes.
Credible was very helpful when I refinanced my student loans because I could quickly see if the change was worthwhile.
The online application process is easy to use and fast.
Additionally, you can get up to a $1,000 bonus for making the switch.
LendingTree is an excellent resource for comparing student loans.
You can see all your student loan options in one place.
You can also compare your refinancing options in less than 5 minutes.
Additionally, you can use LendingTree’s free resources to understand your student loans and make the best choice possible.
You can find programs for new loans and refinancing your existing loans.
Student Loan Refinance: Lenders
After checking with the marketplaces, you can use these companies to refinance your student loans.
SoFi is one of the most well-known lenders and offers some of the lowest interest rates.
The company has saved lenders thousands of dollars with flexible loan terms and low-interest rates.
SoFi offers fixed rate and variable rate loans with 5, 7, 10, 15, and 20-year repayment terms.
There are no hidden fees. You get access to live customer support 7 days a week.
Lastly, there are members benefits, which include free career coaching, financial advice, unemployment protection, and more!
Oh, and did we mention…
LendKey is a student loan refinancing lender that offers loan between $5,000 and $300,000.
The company operates by pooling money from community banks and credit unions to offer low-priced student loans.
LendKey rates are based on your credit score.
Additionally, you can receive a discount for enrolling in auto-pay.
It is important to note that LendKey only refinances for borrowers that graduated from college.
If you meet this criterion, you can get a $300 bonus for refinancing loans under $150,000.
And if you are really in debt, you can get a $750 bonus for refinancing loans over $150,000.
Is it Time to Make the Change?
If you are familiar with the stories above…
…it may be time to make the change.
If you are fed up with Great Lakes as your loan servicer, you should do your research and find a company that can help you.
You can learn how to save money and find a better loan servicer without professional guidance.
This route simply takes more time and patience.
Have you used Great Lakes as your student loan servicer? If so, what was your experience?
Let us know with a comment below!