Great Lakes is one of four servicers approved by the Department of Education to handle federal student loans. In 2018 alone, Great Lakes worked with over 7.5 million borrowers and managed more than $232 billion in student loans, making them one of the largest servicers in the nation.
Less than two years ago, Great Lakes was purchased by Nelnet, which is also one of the DOE’s approved servicers. This left many borrowers wondering how it would impact their loans or their service with Great Lakes. Thankfully, not much has changed since the acquisition.
If you’re one of the millions of borrowers who has Great Lakes as a servicer, you should know that refinancing and consolidating Great Lakes student loans is still an option for managing your debt effectively. Here’s how.
Refinancing your student loans can give you access to better interest rates and repayment terms than you currently enjoy through Great Lakes. Of course, getting these better rates and terms depends on your credit history, income and the amount of debt you already owe to other lenders. And it means you’ll be switching lenders once you’re approved for refinancing.
Because Great Lakes is a federal servicer, you won’t be able to refinance your student loans through Great Lakes or any of the other servicers approved by the DOE. However, you can refinance your loans through a private lender, such as a bank or other financial institution.
Banks and other outside lenders typically offer similar rates as the Department of Education. But if your credit is good and you make a decent income, you might be able to secure a loan refinance at a 2-4% rate – or extend your repayment terms to make monthly payments more affordable.
The important thing is to give yourself as many options as possible by speaking with multiple lenders about refinancing. This way, you can see which private lender offers the best rate and terms to help you get out of debt more quickly, or will give you the flexibility you need to make repayments more manageable.
Refinancing your student loans can be a great way to save money if you can find a lower interest rate. However, when you go with a private lender, you lose the protections and benefits that come with federal student loans.
For example, private lenders don’t offer loan forgiveness to borrowers who work in certain professions or provide a public service, such as serving in the military or volunteering through non-profit organizations. By switching to a private lender, you also won’t have access to the Total and Permanent Disability Discharge (TPD), which forgives student debt for serious injuries or disabilities. What’s more, you won’t be able to use student loan deferment or forbearance if you ever get in a temporary financial bind.
If you’re looking to refinance your loans to make them more affordable, you might consider a new repayment plan offered by the DOE instead. These plans can extend your repayment terms for up to 30 years and offer all the benefits of Direct Loans, including loan forgiveness.
Have multiple student loans you’re paying on each month? Consolidating your Great Lakes loans is also a great option to simplify the repayment process and help you retain the benefits of having a federal loan.
Through the Direct Consolidation Loan program, you can combine multiple student loans into a single loan and a single monthly payment. This also means you’ll pay one interest rate, versus different interest rates across all your loans. Plus, you’ll also have an opportunity to change your servicer, if that’s currently on your radar.
Most federal loans qualify for consolidation – and going through the process is fairly simple. Once you’ve made sure your loans qualify for consolidation, you can apply for a Direct Consolidation Loan through the DOE website. Your application will then be given to a servicer who decides if you meet the requirements for consolidation.
If you’re approved for a Direct Consolidation Loan, you’ll get to choose who you want your federal lender to be. In addition to Great Lakes, current approved lenders include Navient, Nelnet and FedLoan. If you’re happy with Great Lakes as your servicer, however, you can choose to stay with the lender.
Interest rates on Direct Consolidation Loans are calculated by averaging the interest rates on all your loans and rounding them up to one-eighth of 1%. This means you’ll likely pay the same interest rate you’ve been paying previously. But remember, by consolidating your loans you will be extending your repayment period, meaning you could be paying more over the life of the loan than you would under the standard 10-year repayment plan.
Whether you choose to refinance or consolidate your loans, or keep Great Lakes as your servicer, our student loan experts can help you find the most affordable repayment options available. Simply fill out our online form or call (800) 771-6358 for more information or to get started right away!