Do you have a loan being serviced by Great Lakes? Great Lakes Higher Education Corporation is one of the largest loan servicers in the country. (The other big ones are FedLoan, Navient, and Nelnet.) Great Lakes is responsible for handling payments for millions of borrowers with student loans issued by the Department of Education as well as borrowers with private student loans.Though Great Lakes is a nonprofit and a major player in the student loan industry, they aren’t immune to consumer complaints about their practices. Despite a Better Business Bureau rating of A+, they have a high number of complaints on the BBB website. Consumer complaints are also numerous on Consumer Affairs as well as the Consumer Financial Protection Bureau website. Great Lakes’ motto is “Doing what’s right.” But are they?
We’ve taken a look at some of the publicly posted complaints and noticed trends in the questionable practices of Great Lakes. Here are complaints about Great Lakes Student Loan Servicing that stood out to us.If you’re not quite sure where to start or what to do, consider using a service like . LoanBuddy will walk you through exactly what you should do with your loans – from lowering your payments to finding student loan forgiveness options. If you know you want to leave Great Lakes and are considering refinancing, check outhere and find the lowest rate today. If you refinance with Credible you can get a bonus of up to $750. Check out the other best places to refinance your loans here.Note: If you had Great Lakes, but now have Ascendium, here’s what you need to know: Ascendium Student Loans.
Paying ahead or extra on your student loan can make you feel good. You might be knocking off a chunk of your principal and avoiding some interest from piling up. Paying off high interest loans first is a known debt payment technique called the avalanche method and may help you manage your debt better.However, things don’t always go as planned. Great Lakes has a rule, like all federal loan servicers, that “after all interest is satisfied” any extra payments borrowers make will be applied to the loan with the highest interest rate.However, many borrowers claim that when they paid more than their required payment, Great Lakes did not follow through on this claim. The money was applied to the wrong loan. When they called, emailed, or wrote letters to inform Great Lakes that they wanted the extra payments to be applied to the high interest loans, the payments were still misapplied.One borrower on the CFPB website wanted to pay off a specific loanand specified as such, but the money was still applied to the wrong loan.These good faith efforts of borrowers to get ahead on their loans and quickly pay down the loans with the highest interest seem to be rewarded with misdirection and confusion.You can do your best to prevent the problem by logging into your account and seeing if the right payment application method is selected. However, that isn’t a guarantee things will be done right.In fact, you may even need to get a student loan debt lawyer involved to help you sort out the mess.
Auto-pay seems like a good idea for the busy borrower, right? Set and forget. It’s a great idea for servicers too because auto-pay is the closest they can get to guaranteed payments. Most servicers reward borrowers with reduced interest as long as they are in auto-pay — Great Lakes offers a 0.25% interest rate reduction. That’s even more incentive to set up auto pay for someone who tends to forget to pay their bills.However, several borrowers have posted complaints about Great Lakes inexplicably turning off the auto-pay, causing them to miss a payment and lose their interest discount. The reason was not clear for this sudden switch.Again, this seems like a good faith effort to pay back loans is being punished.
For the many people who can’t afford their payments, enrolling in the right payment plan can mean the world. Especially if they are in danger of defaulting. But when their servicer makes a mistake when placing them in a plan, it can be disastrous.Unfortunately, this has happened more than once at Great Lakes. Borrowers relate how they received notices that they were in a different payment plan or payment status than they had asked to be in.One borrower claims she was merely browsing her payment plan options online, decided to stick with the one she currently had, and left it at that. She was surprised when she later found out Great Lakes was processing a payment plan switch that she never asked for.Several borrowers claim to be put into forbearance for months on end because their income-based repayment plan applications took so long to be processed, which is the subject of our next point.
An IDR plan can be a financial life-saver. It can even be a requirement, like if you’re hoping to receive Public Service Loan Forgiveness. But an IDR offers no relief if you don’t even know if your application has been accepted. In fact, a failure to process IDR applications may set qualified borrowers back months in their path to forgiveness — through no fault of their own. Long delays are a frequent complaint of Great Lakes borrowers. (This issue is similar to claims that have been made against FedLoan.)Many complaints are from consumers who applied for an IDR plan only to wait many months for a result, if any came at all. When the IDR applicants called Great Lakes to check on the situations, answers from representatives were evasive. Some borrowers re-applied, hoping for a result, but still nothing happened.One borrower was facing the capitalization of the interest on his loan. Capitalization is when the interest on the loan gets added to the principal. The borrower was told if he applied for an IDR by a certain deadline, the capitalization wouldn’t happen.He applied by the deadline, but the interest was still capitalized. When he contacted Great Lakes to inquire, they told him his IDR application had to beby the deadline for his capitalization to be avoided, which it had not been. This is unfair to the borrower not just because the processing time could be lengthy, but because the borrower has no control over it.When the complaints were filed most of these issues were unresolved, so it’s hard to tell if or when these IDR applications were ever processed.
Last year, Ascendium spun-off from Great Lakes and handles FFEL Loan program loans that were previously handled by Great Lakes.It’s kind of confusing, so we put together a full guide on Ascendium Student Loans here.
You can reach out to Great Lakes Customer service in the following ways:Phone number: (800) 236-4300Hours of operation: 7-9. Mon-Fri (CST)General mailing address:Great LakesPO Box 7860Madison, WI 53707-7860Email/online contact form: Contact form
If you don’t want to be at Great Lakes any longer, you don’t have a lot of options. However, you can refinance your student loans if it makes sense for you.When you refinance your student loans, you take out a new private student loan to replace your Great Lakes student loans. These loans don’t have any of the Federal repayment plan or forgiveness options, but they may have a lower interest rate.If you want to refinance, check out . They are like the Kayak of student loans. You can easily compare your refinance options in minutes. It takes about 2 minutes to see if it’s worth it, and you can get up to a $750 bonus when you do. Check out Credible here.Some other popular lenders include:SoFi – SoFi is one of the most popular student loan lenders. They have competitive rates and terms, and they also offer a bonus of up to $200. Check out SoFi here.ElFi – ElFi is one of the less well known lenders, but they’ve been around a long time. They have very competitive rates and offer a bonus of up to $350. Check out ElFi here.
These stories can be a bit unnerving, but they also may ring true for people who have Great Lakes as a loan servicer. If you find Great Lakes unhelpful, you may want to do your research and find other organizations who can help you figure out your loan situation.If you’re not quite sure where to start or what to do, consider hiring a CFA to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out here.