Great Lakes Loans Review: Rates, Options, and Public Opinion


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Deciding to invest in your education is one of the best choices you will make. While a college or a graduate degree is expensive, there are resources available to help manage the cost, such as student loans from the federal government and private loans from traditional lending institutions. If you take out a student loan from the federal government, when it comes time to pay back your loan, you will deal with loan servicing companies like Great Lakes Loans Servicing.

Great Lakes Student Loan Forgivenes...
Great Lakes Student Loan Forgiveness Guide 2022

Even though you don’t have to repay federal student loans immediately, you shouldn’t wait to understand your responsibilities as a borrower. While student loans backed by the U.S. federal government have more favorable terms than private loans, you are still taking out a loan and have a legal obligation to repay the amount you borrow with interest.

What Is Great Lakes Loans Servicing?

Great Lakes Loans is a company that services student loans owned by the federal government. In layman’s terms, Great Lakes Loans Servicing is a middleman between the borrower (students) and the lender (the U.S. government). There are a limited number of organizations approved by the Department of Education to service student loans, and one of those contractors is Great Lakes Loans Servicing.

The federal student loan servicing section of Great Lakes Loans recently merged with Nelnet, a publicly traded company that is also a servicer of student loans owned by the federal government. While Nelnet and Great Lakes Loans plan to continue operating separately, the new organization is now the largest on the list of approved contractors that service federal government student loans. The parts of Great Lakes Loans that were not included in the Nelnet acquisition include its student loan guaranty operations, education philanthropy, and a line of student success solutions for college.

Services That Great Lakes Loans Provides

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1. Collect and Keep Track of Payments

As a servicing contractor for the U.S. Department of Education, Great Lakes Loans collects and keeps track of payments for federally owned student loans.

2. Pick or Switch Repayment Plans

As part of its servicing agreement with the Department of Education, Great Lakes Loans helps borrowers pick or switch repayment plans to best suit their unique situation.

3. Customize Loan Payments

Should a borrower want to apply an extra payment to one particular student loan, Great Lakes Loans will help to make sure it is applied correctly.

5. Help Borrowers Qualify for Loan Forgiveness

Great Lakes Loans also helps borrowers qualify for loan forgiveness programs, such as those for teachers and public workers.

4. Process Requests for Forbearance or Deferment

If a borrower wants to apply for forbearance or deferment, Great Lakes Loans will help them through the process—for free. There are many companies out there that prey on borrowers with student loan debt and promise to help for a fee. Great Lakes Loans will process all forbearance and deferment requests for free.

Rates and Fees

Great Lakes Loans does not determine the rates or fees associated with federal student loans. That is managed by the U.S. Department of Education.

How Great Lakes Loans Compares to Other Student Loan Servicers

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There are only a handful of contractors that the federal government has picked to service student loans, and these organizations must strictly follow the terms and conditions of each loan. However, while these organizations are primarily responsible for managing loan repayment, they also handle deferments and forbearances when applicable.

To help you know what to look for when dealing with your student loan servicer, we chose three different organizations and compared them to Great Lakes Loans.

  • MOHELA Loan Servicing
  • Navient
  • Cornerstone

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Features

Fees: $

Loans Serviced (3 out of 5 Stars)

Great Lakes services Federal Family Education Loan Program (FFELP) loans, Federal Direct Loan Program (Direct Lending) loans, and private loans.

Rates and Terms Available (3 out of 5 Stars)

While Great Lakes Loans doesn’t determine the rates or terms of student loans, they do help active duty and veteran service members understand the benefits and programs available to help repay their federally owned student loans. For example, the Servicemembers Civil Relief Act (SCRA) caps interest on student loans owned by the federal government at six percent.

Customer Service Quality (2 out of 5 Stars)

Despite having a Better Business Bureau rating of A+, Great Lakes Loans has a high number of complaints on the BBB website. The top complaints are: failing to apply loan payments correctly, turning off auto-pay without the borrower’s consent, placing the borrower in the wrong repayment plan, failing to process income-driven repayment plans, reporting false information to credit bureaus, and attempting to collect payment from people who never took out loans.

Great Lakes Loans has customer service representatives that borrowers can speak to Monday through Friday from 7:00 AM to 9:00 PM Central Time by calling (800) 236-4300. You can also fill out a form on the Great Lakes Servicing website or send them snail mail (no payments) at PO Box 7860, Madison Wisconsin 53707-7860.

Forbearance and Forgiveness (3 out of 5 Stars)

One benefit of federal student loans is that, under certain circumstances, the government may forgive a part, or all, of the loan. Great Lakes Loans can help process student loan forbearance and forgiveness for teachers, public service workers, students of schools that closed, and those with permanent disabilities.

PROS

  • Great Lakes Loans has mobile apps for Android and iOS devices
  • A robust Resource Center on the Great Lakes Loans website provides helpful information
  • Information about managing student loans if a disaster hits is available on their website

CONS

  • Does not offer a 0.25% reduction in interest rate for auto-payments
  • A high number of complaints on Better Business Bureau Website

For more information:

MOHELA Loan Servicing

Features

Founded in the 1980s as a private organization that the State of Missouri sponsored to do public good, MOHELA services millions of borrowers as one of the major contractors hired by the government to service federal student loans. MOHELA stands for the Missouri Higher Education Loan Authority. It has headquarters in St. Louis, Missouri; an operating center in Columbia, Missouri; and an office in Washington, DC.

Fees: $

MOHELA doesn’t determine the fees associated with federal student loans. That is managed by the U.S. Department of Education.

Loans Serviced (2 out of 5 Stars)

MOHELA is one of the loan servicers that the U.S. Department of Education uses to administer FFELP loans, Direct Loans, and Perkins Loans. Besides federal student loans, MOHELA also services private loans, including Direct Loans that were managed by Aspire Resources.

Rates and Terms Available (3 out of 5 Stars)

MOHELA doesn’t determine the rates or terms of student loans (the federal government does that), but they do offer several repayment and postponement programs such as graduated repayment plans, income-driven repayment plans, deferments, and forbearances.

Customer Service Quality (3 out of 5 Stars)

MOHELA manages many student loans, making customer service problems inevitable. However, the number of customer complaints with the Better Business Bureau about MOHELA has dropped from 65 in the last three years to eight in the last 12 months. Some recurring complaints about MOHELA include excessive phone calls, issues with transfers to and from MOHELA, and confusion about public service loan forgiveness.

Forbearance and Forgiveness (3 out of 5 Stars)

MOHELA grants mandatory forbearances to borrowers under the following circumstances: if they are serving in a medical or dental internship or residency program, if the student loan debt is 20 percent or more of a borrower’s total monthly gross income, if a borrower served in a national service position and received a national service award, if a borrower qualifies for teacher loan forgiveness, if a borrower qualifies for partial repayment of loans under the U.S. Department of Defense Student Loan Repayment Program, if a borrower is a member of the National Guard and is activated by a governor, and during federally declared natural disasters in the area where a borrower lives.

PROS

  • If you enroll in auto-debit, MOHELA will give you a 0.25% reduction on your interest rates
  • MOHELA has mobile apps in the Google Play store and Apple App store
  • Hours of operation are Monday – Thursday from 7:00 AM to 9:00 PM CT and Friday from 7:00 AM to 5:00 PM CT

CONS

  • Many complaints with the BBB in the past three years

For more information:

Navient

Features

Navient is a servicer of federal and private student loans. The company’s NaviRefi student loan refinancing product is only available by an invitation to existing Navient customers.

Fees: $

Navient doesn’t determine the fees associated with federal student loans. That is managed by the U.S. Department of Education.

Loans Serviced (1 out of 5 Stars)

The NaviRefi program serves only borrowers who have Navient as their loan servicer. At other companies, student loan refinancing options are available to all qualifying borrowers, regardless of the loan servicer.

Rates and Terms Available (3 out of 5 Stars)

While Navient does not determine the rates or terms of federal student loans, the NaviRefi program stands out for its flexible repayment options, interest rate reduction programs, and help for borrowers who experience difficulty making payments.

Customer Service Quality (1 out of 5 Stars)

Navient has multiple lawsuits pending. In January 2017, the U.S. Consumer Financial Protection Bureau and the Illinois and Washington attorneys general sued the company. Pennsylvania’s attorney general sued in October 2017. The California and Mississippi attorneys general sued in June and July 2018, respectively.

The lawsuits allege that since at least January 2010, Navient has mis-allocated payments, steered struggling borrowers toward multiple forbearances instead of income-driven repayment plans, and provided unclear information about how to re-enroll in income-driven repayment plans and how to qualify for a co-signer release.

Forbearance and Forgiveness (2 out of 5 Stars)

Navient borrowers with federal student loans may be eligible for federal student loan forgiveness programs, such as Public Service Loan Forgiveness or forgiveness through an income-driven repayment plan.

PROS

  • NaviRefi participants receive a 0.25% interest rate reduction by enrolling in auto-pay
  • Flexible repayment options in the NaviRefi program
  • Borrowers need not have graduated to qualify for enrollment in the NaviRefi program

CONS

  • Multiple ongoing lawsuits against the company
  • NaviRefi program doesn’t have the option to add a co-signer
  • NaviRefi program is by invite only
  • Navient is a for-profit company

For more information:

CornerStone

Features

CornerStone Education Loan Services is a not-for-profit organization that services federally owned student loans for the U.S. Department of Education. The 35-year-old company is part of the Utah Higher Education Assistance Authority and is headquartered in Salt Lake City, Utah.

Fees: $

CornerStone doesn’t determine the fees associated with federal student loans. That is managed by the U.S. Department of Education.

Loans Serviced (2 out of 5 Stars)

CornerStone services the following federally-owned loans: Direct Subsidized, Direct Unsubsidized, Direct PLUS, Direct Consolidation, and Perkins.

Rates and Terms Available (3 out of 5 Stars)

CornerStone doesn’t determine the rates or terms of the loans it services, but it does offer borrowers alternative payment plans, deferment or forbearance, and forgiveness and discharge options.

Customer Service Quality (1 out of 5 Stars)

The primary issue customers faced when dealing with CornerStone is a lack of communication and ongoing issues despite outreach.

Forbearance and Forgiveness (3 out of 5 Stars)

CornerStone has forbearance and forgiveness forms available for download in English and Spanish on their website.

PROS

  • CornerStone offers a 0.25% interest rate reduction if you enroll in auto-pay
  • Offers in-person help at their Salt Lake City headquarters
  • Customer service representatives are available Monday through Friday
  • CornerStone’s website offers financial literacy primers and information on alternative payment plans

CONS

  • Long wait times and dropped calls when calling customer service
  • No response from emails and website contact form submissions
  • The website is dated and difficult to navigate

For more information:

Conclusion

The U.S. Department of Education now allows borrowers to consolidate their student loans and pick their servicing company. By using a Direct Consolidation Loan, borrowers can combine multiple federal student loans into one loan so they make a single payment instead of multiple payments. In addition, consolidating your student loans can also give you access to additional loan repayment options and forgiveness programs.

It’s important to remember that student loan servicing companies do not determine the terms and conditions of your federal student loans—the U.S. Department of Education does. So, if you are consolidating your loans to change servicing companies, it’s important that you ensure it won’t result in a higher interest rate. A Direct Consolidation Loan has a fixed interest rate for the life of the loan, and your new rate is the weighted average of all the loans being consolidated rounded up to the nearest one-eighth of one percent. Since there is no cap on the interest rate of a Direct Consolidation Loan, you should be certain that consolidation will help you pay off your student loans faster, regardless of which servicing company you choose.

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