Lori Meadows
As a student loan servicer, Great Lakes is a non-profit organisation that manages federal student loans for the U.S. Department of Education. It is not a lender. Great Lakes offers a 0.25% interest rate reduction on federal direct student loans when set to autopay. The company also has a Knowledge Centre that helps students and former students learn more about student loans and the best ways to pay them back. While Great Lakes previously accepted credit card payments, it no longer does so as per the U.S. Department of Treasury regulations. Great Lakes currently accepts debit cards, savings or checking accounts, and wire transfers.
| Characteristics | Values |
|---|---|
| Can you pay student loan with credit card Great Lakes? | No, Great Lakes does not currently accept credit card payments. |
| Can you pay student loans with a credit card? | Legally, private student loan companies can accept credit card payments, but most don't. Federal student loan servicers cannot accept credit card payments due to U.S. Department of Treasury regulations. |
| How to pay student loans with a credit card? | Intermediaries will write a check to your lender in exchange for your credit card payment plus a transaction fee (usually around 2.5%). |
| Why pay student loans with a credit card? | You may not have enough cash in your checking account, or you may want to take advantage of rewards from your credit card. |
| Downsides of paying student loans with a credit card? | Credit card companies charge much higher interest rates than federal student loan lenders or private student loan lenders. Transferring your entire balance to a credit card will almost always cost more money. |
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What You'll Learn
Great Lakes is a student loan servicer, not a lender
Great Lakes is also responsible for administrative tasks associated with your student loan, including processing a change of address, changing your bill's due date, and providing you with tax-filing statements. As a federal student loan servicer, Great Lakes cannot accept credit card payments. They are bound by U.S. Department of Treasury regulations that forbid it.
However, legally, private student loan companies can accept credit card payments, but most don't. If you want to pay your student loan with a credit card, you can go through an intermediary. Intermediaries will write a check to your lender in exchange for your credit card payment plus a transaction fee. Transaction fees vary between intermediaries but most lie in the 2.5% range.
Using an intermediary service to pay your student loan with a credit card can be beneficial if you don't have enough cash in your checking account or if you have an excellent rewards credit card. However, it's important to consider the potential downsides, such as higher interest rates and additional fees.
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Great Lakes does not accept credit card payments
Great Lakes is a student loan servicer, or a company that facilitates student loan payments. It is a non-profit organisation that manages federal student loans for the U.S. Department of Education. It is not a lender. As per U.S. Department of Treasury regulations, federal student loan servicers cannot accept credit card payments. This means that Great Lakes does not currently accept credit card payments.
If you have a Great Lakes account, you can make payments using their online portal, MyGreatLakes. You can log in to your account using your username and password. Once you have accessed the portal, you can click on 'Make a Payment' and then 'Pay Now' to access the Payment Center, where you can pay with various forms of payment, such as debit or credit cards, and bank wire transfers.
If you wish to pay using a credit card, you can do so through an intermediary service, such as Plastiq, which will write a check to your lender in exchange for your credit card payment plus a transaction fee. While this can be beneficial if you are awaiting payday or if you have a rewards credit card, it is important to note that credit card companies charge much higher interest rates than federal student loan lenders. Therefore, transferring your entire balance to a credit card will almost always cost you more money.
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Intermediaries can be used to pay with a credit card
Student loan servicers like Great Lakes Higher Education Corporation & Affiliates are bound by US Department of Treasury regulations that forbid them from accepting credit card payments. However, legally, private student loan companies can accept credit card payments, although most don't.
Using an intermediary service, you could move some of your student loan balance to a credit card. However, this strategy only works if the card has a 0% introductory rate, if it can save you money, and if you are sure that you can pay off the balance before an interest rate kicks in.
For example, Claudia used the intermediary service Plastiq to put $2,000 toward her student loan, which had a 6% interest rate. She used her credit card to pay Plastiq the full $2,000 plus the 2.5% transaction fee of $50. This left her with credit card payments of $170.83 per month for twelve months instead of paying $172.13 per month to her loan company. In this case, it made sense for Claudia to use the balance transfer approach because her loan’s interest rate exceeded 4.6%.
However, it is important to note that credit card companies charge much higher interest rates than federal student loan lenders. Therefore, transferring your entire balance to a credit card will almost always cost you more money. Additionally, using an intermediary to make student loan payments with your credit card can be risky. You could quickly fall behind on credit card payments and end up owing more money.
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Credit card companies charge higher interest rates
You cannot pay your student loan with a credit card through Great Lakes. Great Lakes is a student loan servicer, not a lender, and federal student loan servicers are bound by U.S. Department of Treasury regulations that forbid them from accepting credit card payments.
Now, onto why credit card companies charge higher interest rates.
Credit card companies charge high-interest rates to protect themselves if the cardholder racks up a bunch of debt and never pays it off. When a borrower opens a credit card, the card issuer doesn't know where the money will be spent, how often it will be used, how much will be used, or when it will be paid back. Credit cards are designed for large-scale consumption, and issuers do business with all sorts of consumers. Given this uncertainty, the high-interest rate acts as a way for the card company to still make consistent money.
Additionally, credit card interest rates are variable and can change occasionally. Some cards have multiple interest rates, such as one for purchases and another, usually higher, for cash advances or balance transfers. The interest on your credit card is also calculated daily, which is why credit card balances can grow rapidly and sometimes get out of hand.
While credit card companies do charge high-interest rates, there are ways to avoid paying them. For example, if you pay off your balance in full each month, you won't be charged interest. You can also find a low-interest credit card, although it's not ideal to carry a balance, it can save you money.
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Great Lakes offers a 0.25% interest rate reduction on federal direct student loans with autopay
Great Lakes is a student loan servicer, not a lender. It is a non-profit organisation that manages federal student loans for the US Department of Education. It is headquartered in Madison, Wisconsin, and has operating centres across the country.
Great Lakes offers a 0.25% interest rate reduction on federal direct student loans when set to autopay. This is a common incentive offered by many student loan servicers. Autopay helps students manage their finances, and it is free and easy to use.
To set up autopay with Great Lakes, you must first sign up for account access on their website using your Social Security number. You will then be able to establish your user ID, password, and personal identification number (PIN). With these credentials, you can set up autopay, assess repayment options, calculate payoff amounts, and more.
Great Lakes also has an extensive Knowledge Centre that provides educational resources for current and former students, as well as parents, to help them understand student loans and navigate repayment options.
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Frequently asked questions
No, Great Lakes does not currently accept credit card payments. Federal student loan servicers are bound by U.S. Department of Treasury regulations that forbid them from accepting credit card payments.
Credit card companies charge much higher interest rates than federal student loan lenders. Transferring your entire balance to a credit card will almost always cost you more money.
If Great Lakes is your student loan servicer, they can help you set up an income-driven repayment plan, forbearance, or deferment. They can also help you determine whether you qualify for student loan forgiveness.
You can pay online using a debit card, wire transfer, or directly from your checking account.
