Great Lakes is a great education financing company and has been for quite several times. The company is also known by Great Lakes Education Loan Services. By the way, is Great Lakes a Federal loan? Find out that answer by reading the following text.
Is Great Lakes a Federal Loan?
Great Lakes is a loan servicer located in Wisconsin, Madison for both federal and private student loans. According to research, it contracts with more than 6,000 schools and 1,000 lenders including the United States Department of Education (DE) to manage loans for millions of borrowers.
So, is Great Lakes company a Federal loan? Actually, as a loan servicer, Great Lakes, is neither a private nor a federal loan. The Great Lakes company actually services both private and federal loans, so the kind of loan you have will not change after you start paying it off with Great Lakes.
Student Loan Repayment Options
The student loan repayment plans available to you will depend on your finances and whether you have private or federal loans. Great Lakes does not actually play a role in determining repayment choices, but rather makes sure the borrower is being charged the appropriate amount given the plan she or he has selected.
Any people who have private student loans serviced by Great Lakes probably have different repayment options depending on their lender. If you are struggling to make your payments, then you are able to contact your lender to know what they can offer. Several private lenders are going to allow for repayment plans similar to what the government offers. But, need to note that, unlike for federal loans, they are not obligated to offer any breaks or alternative payment choices.
If you are repaying federal loans via the Great Lakes company, on the other hand, you are going to have access to federal income-based repayment choices including REPAYE (Revised Pay As You Earn), PAYE (Pay As You Earn), IBR (Income-Based Repayment), ICR (Income-Contingent Repayment), as well as federal loan consolidation and deferment. If you do not select an alternate plan, the Standard Repayment Plan for federal loans is going to charge fixed payments over a ten-year loan term.
Here are the income-based repayment choices that you may have the option of selecting for your federal loans serviced with the Great Lakes company:
REPAYE (Revised Pay As You Earn) offers the potential of the lower monthly payments and loan forgiveness. Monthly payments on REPAYE will be 10% of your discretionary income, which is recalculated each year based on your family size and income. If your income is relatively high, then your monthly payment on REPAYE may be more than it was on the Standard Repayment Plan, however could be much lower if your paychecks are smaller. On REPAYE (Revised Pay As You Earn), any outstanding balance is forgiven after 20 or 25 years of repayment. But, probably you have to pay income tax on any amount which is forgiven.
PAYE (Pay As You Earn) is really similar to REPAYE. However, it is intended for those with high debt relative to their income. The similar payments are going to be 10 % of discretionary income and outstanding balances are forgiven after 20 years. Those on PAYE (Pay As You Earn) will never pay more than they would on the Standard Repayment Plan. The PAYE costs the borrowers more, because lower monthly payments mean it will take longer to pay off the loan, and thus more interest accrues.
IBR (Income-Based Repayment) is another choice for those who are looking to lower their monthly payments, because IBR payments are always lower than the payments on the standard 10-year plan. On IBR (Income-Based Repayment), monthly payments are 10 or 15% of discretionary income. Your payment could change each year your family size or income changes. IBR (Income-Based Repayment) is meant for those with a high debt-to-income ratio so that will be able to help you manage monthly payments, however will mean you pay more in interest over the life of the loan. Like with the other plans, your outstanding balance is going to be forgiven after 20 or 25 years of repayment
ICR (Income-Contingent Repayment) is an option which can help you pay your loans faster as your income goes up over time. Your monthly payment on ICR (Income-Contingent Repayment) will be 20 percent of discretionary income or the income-adjusted amount you will pay for a fixed loan term of 12 years. Your monthly payment with ICR (Income-Contingent Repayment) may be more than it will be with the standard repayment plan, and any unpaid balance is forgiven after 25 years.
Tips For The Best Great Lakes Borrowing Experience
Here are some tips for the best Great Lakes borrowing experience:
- Take advantage of the Great Lakes’ online tools
Federal repayment options can be varied. Luckily, Great Lakes knows that the borrowers can struggle to choose the right repayment choice and they have made a Repayment Planner to make the option easier. The Repayment Planner allows you to view the potential impact of each program your loans are eligible for, as well how your length of repayment and interest paid will change. You are able to access the Repayment Planned by logging into your Great Lakes online account.
- Start paying as soon as possible
Even though the student loan repayment may be far from your mind while you are in school, it is a great idea to start thinking about it early. With the Great Lakes company, you will be able to start making payments while you are still in school. Most loans start obtaining interest even while you are in school, so beginning repayment early can cut down on the total interest that accrues and get you closer to paying off your loan principal.
- Leverage the Great Lakes customer support
If you are struggling to make your monthly payments or want to talk through all of your choices with someone knowledgeable on the topic, then the Great Lakes customer support can help you. Here you should never have to pay for help with your student loans. The Great Lakes team will help you understand and decide on federal student loan consolidation, service member benefits, payment plans, and more.