Navigating the complexities of loans, particularly student loans, can feel overwhelming. For years, Great Lakes Higher Education Corporation & Affiliates (Great Lakes) served as a major servicer of federal student loans. Many borrowers relied on them for repayment information, assistance with deferment and forbearance options, and general guidance. The purpose of this article is to provide information on how to locate resources related to Great Lakes, and what options may be available now, considering their transition to a different servicing model. Understanding the current landscape for student loans and identifying alternative avenues for support are crucial steps for borrowers. We will explore the implications of this shift and provide resources to ensure borrowers can continue to manage their student loan repayment effectively.
The Transition from Great Lakes: What Borrowers Need to Know
Great Lakes no longer services federal student loans. Their contract with the Department of Education concluded, and accounts were transferred to other servicers. This transition is a significant change for borrowers who were accustomed to Great Lakes' platform and customer service. Borrowers must identify their new loan servicer to avoid any disruption in their repayment process. Failure to do so could lead to missed payments and potential negative impacts on credit scores.
Identifying Your New Loan Servicer
The most important step is determining which company is now servicing your student loans. There are a few ways to achieve this:
- Check Your Email and Mail: Your new loan servicer should have sent you a notification about the transfer. Look for emails and physical letters from the Department of Education or your new servicer.
- Visit the Federal Student Aid Website: Log in to your account on the Federal Student Aid website (studentaid.gov). This website provides comprehensive information about your federal student loans, including your current servicer.
- Contact the Federal Student Aid Information Center: If you're having trouble locating your loan servicer, you can contact the Federal Student Aid Information Center (FSAIC) for assistance.
Once you've identified your new loan servicer, create an account on their website and familiarize yourself with their platform. Ensure your contact information is up-to-date to receive important notifications and updates regarding your loans.
Common Loan Servicers and Their Contact Information
Since Great Lakes has transferred its accounts, it's crucial to know the main student loan servicers currently operating. Some of the largest servicers include:
- Nelnet: A major loan servicer handling millions of student loan accounts. You can find their contact information on their website.
- MOHELA (Higher Education Loan Authority of Missouri): This servicer often handles loans associated with Public Service Loan Forgiveness (PSLF). Their website provides contact details and resources for PSLF applicants.
- Aidvantage: Another significant servicer offering various repayment options and assistance. Check their website for the latest contact details.
Knowing these servicers and having access to their contact information is essential for effective loan management.
Understanding Loan Repayment Options
Navigating loan repayment can be complicated, but understanding your options is key to managing your debt effectively. Federal student loans offer a variety of repayment plans tailored to different financial situations.
Types of Repayment Plans
Here's a breakdown of the most common repayment plans:
- Standard Repayment Plan: This plan involves fixed monthly payments over a 10-year period. It's the fastest way to pay off your loans, but it may not be the most affordable for everyone.
- Graduated Repayment Plan: Payments start low and gradually increase every two years. This can be helpful for borrowers who expect their income to rise over time.
- Extended Repayment Plan: This plan allows you to extend your repayment period up to 25 years, resulting in lower monthly payments but more interest paid over the life of the loan.
- Income-Driven Repayment (IDR) Plans: These plans base your monthly payments on your income and family size. Common IDR plans include Income-Based Repayment (IBR), Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE), and Income-Contingent Repayment (ICR). IDR plans can significantly lower your monthly payments and offer loan forgiveness after a certain number of years.
Choosing the right repayment plan depends on your individual circumstances. If you're struggling to afford your payments, exploring IDR plans is highly recommended. Contact your loan servicer to discuss your options and determine the best plan for your needs. The SAVE plan is the newest IDR plan, offering potentially lower monthly payments than previous options.
Deferment and Forbearance: Temporary Relief Options
If you're facing temporary financial hardship, deferment and forbearance can provide temporary relief from making loan payments. These options allow you to postpone your payments for a certain period, but it's important to understand the differences between them and the potential consequences.
Deferment vs. Forbearance
Deferment: Deferment allows you to temporarily postpone your loan payments under certain circumstances, such as:
- Enrollment in school at least half-time
- Unemployment
- Economic hardship
For subsidized federal student loans, the government pays the interest that accrues during deferment. However, for unsubsidized loans, interest continues to accrue, which can increase your total loan balance.
Forbearance: Forbearance also allows you to temporarily postpone your loan payments, but it's typically granted for broader reasons, such as financial difficulties or medical expenses. Unlike subsidized loans in deferment, interest always accrues during forbearance. This means your loan balance will increase over time.
Before choosing deferment or forbearance, consider the long-term implications. While these options can provide immediate relief, the accrued interest can significantly increase the total amount you owe. Explore alternative repayment plans, such as IDR plans, before opting for deferment or forbearance.
Public Service Loan Forgiveness (PSLF)
The Public Service Loan Forgiveness (PSLF) program is designed to forgive the remaining balance on your Direct Loans after you've made 120 qualifying payments while working full-time for a qualifying employer. Qualifying employers typically include government organizations, non-profit organizations, and certain other public service organizations.
Eligibility and Requirements
To be eligible for PSLF, you must meet the following requirements:
- Have Direct Loans (or consolidate other federal student loans into a Direct Consolidation Loan).
- Work full-time for a qualifying employer.
- Make 120 qualifying payments under a qualifying repayment plan (typically an IDR plan).
It's crucial to certify your employment annually to ensure you're on track for PSLF. The Employment Certification for Public Service Loan Forgiveness form (ECF) can be submitted to your loan servicer. MOHELA is currently the servicer that handles the PSLF program, so it's likely your loans will be transferred to them if you're pursuing PSLF.
PSLF can be a significant benefit for those working in public service, providing substantial loan forgiveness after a decade of qualifying employment and payments. Understanding the requirements and staying on track is essential for maximizing this opportunity.
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