When the time to repay your student loan comes, you may be surprised that you do not deal directly with the US Department of Education. This is because the Federal Government issues out billions of dollars in student loans, but they do not supervise this directly.
They instead authorize many servicing companies which then act as go-betweens for processing and answering any loan related questions that the students may have.
Who are they?
Great Lakes is one of these companies and it is, in fact, one of the largest handlers of student loans, in that; 1 in every 4 students is probably using their services. It is therefore important to understand who they are, their limitations and how they function.
Let's get started:
Now, this is a company that was started in 1967, and they do not originate loans. Their work is to manage your student loan that has been offered by the federal government.
They do not charge you anything to do this, as this is a non-profit company which is not publicly traded. In the last 50 years, they have been able to work with over 6,000 universities and colleges and more than 1,000 private lenders.
It has been able to handle more than 23% of all federal student loans, and currently, they are servicing more than 8 million borrowers whose debt amounts to $220 billion. This shouldn’t be seen as a measure of how popular they are, because students do not really have a say as to which company shall manage their loans.
In recent years, the massive amount of student debts has been a hotly discussed topic, especially in political circles and many politicians have come up with a wide range of solutions to the problem.
One of the solutions suggested is the use of only one platform for the servicing of all federal loans.
Great lakes, therefore, decided to join forces with Nelnet, in order to bid for this contract. They formed a company known as GreatNet, which is one of three vendors that are bidding for the job.
What do they do?
Great Lakes mostly manage your student loan. They open accounts for borrowers, process their payments monthly, communicate with them concerning their loans, and also help borrowers with any changes concerning their repayment plans, or in case they need to defer payment or apply for forbearance if you happen to be experiencing any economic hardships.
The company will also certify a borrower that needs loan forgiveness.
Once you set up your account on their website, you can keep using the portal to check your monthly statements, make your payments, print tax documents, change your repayment plans, etc.
If you sign up for automatic repayment, you are entitled to a discount of 0.25% on your repayments.
In addition, the company has got a mobile app, which you can use to access your account, receive reminders for payments and confirmations as well. This is available on all Android powered mobile phones and iOS systems as well.
Limitations of Great lakes:
This company has received numerous negative comments from students that have used them. This is because they fail on many levels, which can be attributed to the huge number of student loans they are currently servicing.
Their main limitations include;
Errors with Income driven plans:
These take a long time to process, and they require you to provide your tax documents and other types of forms which are even more difficult to find. If you happen to be married while borrowing, the process is even more difficult for you.
An income-driven plan makes it easy for a student to repay their student loans if you have a high debt compared to your income. It is normally based on your family size, your income and the type of federal student loan you have.
You must complete an income-driven repayment plan request available at studentLoans.gov. This provides great lakes with specific information that they use to qualify you.
You will need to recertify your loan and the specific situations each year. They may end up reducing your monthly instalments.
Great Lakes have had many problems when trying to process the forms for an income-driven plan, and in some cases, they even lose them. This is extremely worrisome for borrowers who need these plans for their plans to become manageable.
What can you do about this?
If you have applied for an income-driven plan, ensure to keep in close contact with your loan servicer, and once you submit the forms, ensure that they have been received.
After submission, ensure to keep calling and checking up on the status of your application. This should do the trick. If they haven’t received the forms, send them again. Ensure to include a request for forbearance in case your due date is drawing near so as to ensure that your account does not become past due.
Wrong repayment plans:
Some borrowers have actually complained of being placed in the wrong payment plans. This is mostly due to the large volume of loans that Great Lakes processes, but it can be quite inconveniencing when their systems do not show the right payment plan for you.
To understand just how bad this can be, some borrowers have had forbearance added to the wrong accounts, and leading to their accounts becoming overdue. You may even find that your loan becomes due on a date that it is not supposed to become due. These are the types of problems you are likely to find with this loan management system
Now, there is absolutely nothing wrong with a repayment plan, so long as you chose it yourself. Remember that you only choose what you can be able to handle, and having the company change that without your knowledge can be quite problematic for you.
What can you do about this problem?
The best way to ensure you do not fall, a victim of this problem, is to constantly check on your account. This ensures that you are able to detect any problems as soon as they arise, and you do not end up getting caught unawares. Remember that rectifying the problem may also take a long time.
In case you notice errors, contact the company immediately, and have them rectify the problem before your next due date. This should also be followed up frequently until you see on your account that the right changes have been made.
Turning Auto-pay off without your knowledge:
This is yet another problem that has been reported by Great Lakes clients. That the company will turn-off your auto-pay plan without any notice. An auto-pay plan is extremely important because it ensures that your repayments are always up to date. This is a system that offers you alarms and notifications whenever a repayment is due.
You can even set it up on your mobile phones to be sending you messages on time, and allowing you to ensure that your loan never gets into arrears.
By switching off this function, a client who relies on it for payment will find their accounts in arrears, which may attract unwanted and unnecessary charges, that would have been avoided, if the system had been working efficiently, and notified you of the repayment date drawing near.
It also makes it hard for the students to trust the system, as they do not know when it can happen for them. It is, therefore, a huge disadvantage that the company should ensure that they work on, in order to keep their clients happy.
What can you do about this?
Just like every other problem, ensure to keep checking your account as frequently as possible. If you notice that your auto-pay has been suspended without your knowledge, you must contact the company immediately and request them to re-install it with immediate effect.
Failure to do this will result in your loans attracting late payment charges which are not ideal. Ensure that, even after calling the company, you have checked the system often, so that you can confirm that the correct changes have been made and that your account is up to date.
Now, other than that, you should also check to confirm whether the problem is on your side. Ask yourself a few questions such as; have you changed accounts recently? Did you forget to update the company with your new account details, did you change jobs? Did you change locations? Etc. these could also contribute to the auto-pay turn off problems.
Failing to apply for payments:
Well, of all the problems, this has got to be the worst one yet. You send money for loan repayment, and the company fails to apply the payment to your loan. You will then find that your loan is in arrears, due to negligence on their part.
You can also find instances where students wish to pay off larger amounts of money on their loans, and the company fails to apply the same to their loans.
The systems at times fail to set-up the repayment plans appropriately, and this can only lead to frustrations from the students. Some borrowers were even told by Great Lakes that their payments were not being applied to the right loans.
Can you imagine such a situation where you send money and it is not used to pay up your loan? It can be quite discouraging and irritating, which is why you will find that Great Lakes is not all that popular as a loan management company.
What can you do about this problem?
First things first; Always ensure that you are in constant contact with the company and that you are constantly monitoring your account as often as possible. This helps you to identify when there are issues and ensuring that they are rectified and corrected as soon as possible.
If for example, you notice that you sent some payment and your loan has not been repayment, either they have not received the payment, or they have applied it to a different loan. This is quite dangerous and you need to contact the company immediately for them to correct the problem and pay your overdue loan.
You can also log onto their website; Greatlakes.com and ensure that they have updated your loan status to reflect repayment has been done.
Sending wrong information to the credit Agencies:
Wow, does it get any worse than this? Having the wrong information sent to the credit agencies will definitely affect your credit report and even your credit score.
You need a good credit report to be able to borrow more in the future or to refinance your loan. When the wrong information is sent to these agencies, you shall be wrongly represented and it will mess with your creditworthiness for a long time to come.
Always ensure to be checking your credit report regularly, and not only when you need to borrow some money. This will ensure that you detect problems in good time, and make the necessary arrangements for these mistakes to be rectified.
When you notice a problem on your credit report that is not necessarily correct, ensure to call the Great Lakes offices, and ask them to send the right information concerning your credit history.
Many of borrower's accounts have been reported as being in default or delinquent. This definitely causes very many issues as outlined above, and it leads to blemishes on your credit report that will affect you greatly in the future when looking for a mortgage, car, or business loan because lenders rely on your credit report to determine whether you qualify for a loan or not.
What can you do about this?
It is vital and important for you to constantly keep track of your credit report. Have a look at it frequently and identify all of the information that is being reported. Keep all of your payment receipts and other types of documents that prove you are on the right track handy, just in case you need to dispute one or two issues.
Also, if you notice a negative remark that shouldn’t be there, consult with the originating company such as the Great Lakes company, and request them to remove such information as it is misleading and not true.
If they claim that you did not pay a specific loan, ensure to have the documentation such as receipts to prove that you did, in fact, pay for the loan, so they can remove such information from the report.
In case they are unable to remove such information, there should be a note attached to your credit report to show that you had disputed one or more transactions.
Make it a point to ask for your credit report often in order to check for such discrepancies.
Collecting loan payments from people whose loans are not being serviced by Great Lakes:
Okay, have you ever received a call from a debt collector, concerning a loan that you did not even take? This is very common and it must be the most irritating thing ever! Now, imagine being called by a big company such as Great lakes asking you to pay up a loan that you never even took?
Many people have complained about this. They claim that they receive phone calls from the company, requesting them to pay back their overdue loans, yet they never took out any loans with the company, and they do not even intend to do the same.
Now, the reason behind this is that people tend to have similar names and close enough addresses that causes the companies to get mixed up.
However, it is a very scary situation. You may look at your credit report and find a loan there that you never even took and have no clue what is happening. Again, getting reports expunged from the credit report is a whole other story.
So, what can you do?
If you happen to receive a call from Great lakes by mistake, you must ensure to report it immediately. Make a point of getting in touch with the credit bureau to report the mistake. Both the bureau and Great Lakes company are responsible for correcting this mistake, and ensuring that your credit report does not include loans that you did not take out.
The truth of the matter is that you do not get to choose the company that will be responsible for managing your student loan, but as you can tell from most of the suggestions, it is up to you to be vigilant and ensure that you counter check and even cross check each and everything in your account.
Ensure to frequently request for your credit report in order to analyze everything that has been reported, and to ensure that the information that has been included in the report represents the true state of affairs.
Now, the best advice you can get concerning your finances is to ensure that you have a filing system that keeps a record of everything. When you pay your loan installments, keep the receipts, when you withdraw money, ensure to keep a record of it, because you never know when you may need this evidence.
You should also ensure to report any discrepancies you notice immediately to the relevant authorities so that the necessary action can be taken.