If you have borrowed money through Great Lakes Student Loan, it would be better to take your time reading this post, because there are some good and bad news that you might be interested in. Great Lakes Student Loans servicer is one of the giant loan servicer company in the US, where the other competitors are FedLoan, Nelnet, Navien. Unlike the other many student loan servicing companies, fortunately, Great Lakes is not the worst one to deal with. Great Lakes Student Loans servicing has a range of advantages that you can take the benefit of them.
In this article, we are going to review the Great Lakes Student Loans, and we will guide you with what repayment options they provide. To find the best repayment plan for your budget, it would be better to take an in-depth look for each option in detail.
Great Lakes Student Loans Review
Great Lakes Higher Education Corporation is one of the most outstanding student loan servicing companies in the US among the other giants such as Navient, Nelnet, and FedLoan. Great Lakes is a not-for-profit organization which is directly working with educational institutions and lenders. Great Lakes Higher Education Corporation is not offering student loans; it is just intermediary institution which guarantees the loans to the borrowers. Federal Government uses Great Lakes to realize student loan activities.
There is also a significant distinguishing characteristic between the payment structure of Great Lakes and standard federal loan collection. Thus, for standard federal loans, you are required to make payments in adjustment a 10-year plan with a fixed amount for each month. However, for Great Lakes Student Loans, the service allows you to choose an alternative repayment plan which reflects your financial situation in the most convenient way. So you do not feel the burden of repayments on Great Lakes Student Loans.
How to find the best repayment plan?
If you have taken federal loan via Great Lakes Student Loans services, then you are going to have several repayment options. The first option is the standard repayment plan which consists of 10-year payments with a fixed amount for each month. If you do not choose the particular repayment plan, your Great Lakes Student loan will automatically be applied on the standard repayment plan.
- Income-driven repayment - is another option for payment on your loan debts. The income-driven repayment plan is adjusted for your disposable income. Additionally, it allows you to extend your repayment period to up to 25 years. If you can keep making your payments consistently during that time, at the end of the payment term, the remaining amount of our debt will be forgiven. Income-driven repayment plan has own subcategories such as Pay As You Earn, Revised Pay As You Earn, Income-based Repayment, and Income-Contingent Repayment.
- Pay As You Earn (PAYE) - it is intended for the borrowers who have a very high amount of debts in relative to their income. Based on PAYE, your payment will be 10% of your discretionary income and will last 20 years. After this period, any amount left will be forgiven. However, it worth to note that, due to lower monthly payments, the length of payment expands, and that is why for those on PAYE, overall interest increases. Thus, it costs to borrower more than who on Standard payment.
- Revised Pay As You Earn (REPAYE) - It is very similar to the PAYE program, so it allows the borrower to take the benefit of both reduced monthly payments and even certain amount of loan forgiveness. For those on REPAYE, Great Lakes apply 10% monthly payments which are calculated based on your discretionary income. This calculation is repeated each year and varies by depending on total family size and income. It means that if your income is relatively higher, you are obliged to make payments higher amount than the standard repayment plan. After the period up to 20 or 25 years, the left amount of your loans are forgiven. But it is better to keep in mind that tax is levied on any amount of forgiven loans.
- Income - Contingent Repayment (ICR) - It is another option for those who find it difficult to pay their Great Lakes Student Loan debts. It is very beneficial for borrowers who expect to get a higher income in the future. So, you have a choice to repay your loans in a way such as higher monthly rates ( with 20% of your discretionary income) or fixed amount of monthly payments for 12 years period. IBR allows you to pay your loans as faster as your income increases. And after 25 years regular payments the left amount of your debts is forgiven.
- Extended Repayment Plan- allows you to extend your repayment period up to 25 years. Plus, through Extended Repayment Plan, you will pay a lower monthly amount for your Great Lakes Student Loan debts.
- Graduated Repayment Plan - if you think your income is going to increase in the future, this plan is the most convenient for you. It is because, Graduated Repayment Plan allows you to lower your monthly payment, but it will increase your payments after 10 years period.
- Income-based Repayment (IBR) - if you want to reduce your monthly payments, another alternative plan is IBR. This program allows you to pay 10 or 15 % of your discretionary income. The repayment amount could change because each year your family size and income are considered. Due to it decreases your monthly payments; as a result, overall length period of loans is expanded which means you pay more interest on the whole amount of credits.
There is one important thing to keep in mind that these repayment options are intended for only federal loans. If you have private loans, unfortunately, you are not going to be eligible for these repayment alternatives. However, if that is the case, it would be better to take a look at refinancing student loans. It will give you a chance to change repayment conditions no matter what type of loan you have.
Great Lakes Repayment tool
One of the great resources that Great Lakes provides is offering repayment planner tools. Great Lakes has stable and excellent online portal provided with effective and useful tools. These tools help you to calculate and determine your estimated prediction with your debts. So if you would like to change your repayment plan, through this tool, you can estimate the difference between these various options.
Final note
It worth to note that, changing the repayment plan which Great Lakes Student Loan provides, has a considerable impact on your income. According to the tax legislation, you are going to pay a new tax rate by your income after changed repayment plan. Changing repayment plan could affect your income, so tax regulations may not be convenient for your situation.
That is why you would like to make a wise decision on your Great Lakes Student Loans; you are going to need to consult with a tax specialist before deciding to shift your repayment plan. In this case, Student Loan Resolved specialist could help you to make a smart choice. If you have any question or more information about repayment plans, please do not hesitate to call our Helpline.
