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  • Writer's pictureNathan Zarcaro

Great Lakes Loan Forgiveness: 4 Options for Borrowers in 2023

Updated: Apr 2, 2023

My Great Lakes, more formally known as "Great Lakes Educational Loan Services," is one of the federal government's student loan servicing companies. Similar to companies like Nelnet or MOHELA, Great Lakes is contracted by the government to manage some federal borrower's outstanding student loan debt.

As a federal loan servicer, Great Lakes does not have any repayment or forgiveness programs that are unique to them. Rather, the forgiveness programs here are strategies that can be used by federal student loan borrowers with Great Lakes loans.

What is Great Lakes Educational Loan Services?

As one of ten companies contracted by the Department of Education to service federal student loans, Great Lakes is hard to avoid as a borrower. Actually owned by Nelnet, together these two companies service approximately 40% of federal student loan debt outstanding.

Great Lakes was supposed to be decommissioned as a federal loan servicer by the end of 2020, but due to the pandemic and other factors, still plays a key role in the federal loan process.

Options for Great Lakes Student Loan Forgiveness

Federal borrowers have a few main options to pursue Great Lakes student loan forgiveness. At this time, they are:

  1. Teacher Loan Forgiveness

  2. Income-Driven Repayment

  3. Public Service Loan Forgiveness

  4. Perkins Loan Cancellation

1. Teacher Loan Forgiveness

The first way to say goodbye to your Great Lakes loans is reserved for America's teachers. Teacher Loan Forgiveness carries a maximum benefit of $17,500 - reserved for those that teach math, science, and special education.

The program is available to Great Lakes borrowers that have both Direct Loans, as well as loans within the FFEL Program.

Typically, you must:

  • Be fully licensed

  • Be "highly qualified," with a college diploma and full certification

  • Teach five consecutive and complete academic school years, though exceptions are granted in the case of pregnancy and other factors

If you're unsure whether your position and/or school district qualifies, you'll want to reference the Teacher Cancellation Low Income Directory.

Those educators that complete their five years can then proceed on and complete the Teacher Loan Forgiveness Application, available by logging into your Great Lakes account.

2. Income-Driven Repayment

The most popular path to student loan forgiveness - both with Great Lakes and nationwide - is income-driven repayment. You'll pay 10% to 20% of your monthly discretionary income for 20 to 25 years, and then, your remaining loan balance will be forgiven.

You'll have to leave your standard repayment plan (or other current plan) to take advantage of IDR, and only certain loan types are eligible for each of the four programs.

As a reminder, these four programs are Income-Based, Income-Contingent, Pay as You Earn, and Revised Pay as You Earn.

And while each program has different eligibility criteria based on your loan type, you generally can increase your access to IDR by consolidating your federal loans first.

Keep in mind though, that if you pursue Great Lakes forgiveness via IDR, your forgiven balance could be treated as taxable income.

3. Public Service Loan Forgiveness

Those that qualify for income-driven repayment may qualify for a much more lucrative program in PSLF, if they work for the government or a qualifying 501c(3) nonprofit.

PSLF, a program where you will make payments under one of the IDR plans, is for Direct Loans and allows you to receive tax-free forgiveness after just 10 years of payments, rather than the 20 or 25 years of payments required under IDR alone.

The program requires that you make 10 years of payments - 120 payments total - while working for a qualified employer.

The federal government's PSLF help tool can help you track whether you work for a qualifying employer, but generally, the following types of employers count:

4. Perkins Loan Cancellation

Great Lakes borrowers also can qualify for Perkins Loan Cancellation if they still have outstanding Perkins Loans. The Perkins Loan program was ended in 2017, but the cancellation program remains.

Like PSLF, cancellation is granted based on employment, and is open to:

  1. Firefighters

  2. Public defenders/attorneys

  3. Law enforcement, including corrections officer

  4. Teachers

  5. Many more careers

Perkins Loan Cancellation typically follows a 5-year schedule in which you'll receive:

  • 15% forgiveness after first and second year

  • 20% forgiveness after third and fourth year

  • 30% forgiveness after the fifth year

Refinancing Great Lakes student loan debt

If none of the above forgiveness programs are for you, refinancing your loans with a private lender may be a better path for you. We usually recommend that you start with Splash Financial or LendKey, since they are student loan marketplaces that will compare your rates across many different lenders.

With Splash in particular, you can receive an interest rate quote on your Great Lakes (and other) loans in less than 3 minutes without negatively impacting your credit.

Great Lakes loan discharge

Under certain and specific instances, you also may qualify to have your loans discharged immediately, meaning that you are not responsible for making any additional payments on any of them.

These programs include the following:

  • Bankruptcy discharge - Discharging student debt through bankruptcy is extremely difficult to do, but not impossible.

  • Closed school discharge - If you attended a school that closed while a student (or shortly thereafter), you may qualify for loan discharge. Great Lakes automatically notifies borrowers.

  • Death discharge - If a borrower of a student loan dies, the loan is discharged immediately after a valid death certificate is provided. This also holds true if a student is a dependent on a Parent PLUS loan.

  • False certification discharge - In an event where your college or university incorrectly certified your eligibility to borrow money via federal loans, your loans may be discharged. Both Direct Loans and FFEL Loans are eligible.

  • Total and Permanent Disability Discharge - If you've lost your ability to work full-time due to an injury, you may be eligible to have the remainder of your loans cleared.

More information about all of these programs can be found through the Great Lakes website.

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About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and has worked for industry leaders in both finance and healthcare.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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