Yesterday, our office announced that AG Ferguson filed a lawsuit against StudentLoanProcessing.US (SLP), a student loan debt adjusting firm, and its president James Krause for violating Washington’s Debt Adjusting Act and Consumer Protection Act.
“This firm charged exorbitant and illegal fees for services that student loan borrowers can obtain for free,” said Ferguson.
A total of 88 Washington consumers, with an average student loan debt of approximately $58,000, used SLP’s services. SLP has received roughly $132,000 in fees from these consumers.
Many student loan debt adjustment firms have sprung up as a result of the $1.2 trillion debt burden carried by nearly 40 million American borrowers. Most offer to help students fill out and submit paperwork to DOE to consolidate their federal student loans.
Here’s the good news. There are free federal programs that will help with student loan debt consolidation:
Apply for U.S. Department of Education federal repayment programs for free
For most federal borrowers, the consolidation process is fairly straightforward: The borrower fills out a two-page application, verifies his or her employment and income, and submits the package to the DOE. This service is done through the DOE for free and typically takes four to six weeks. Learn more here.
Free student loan debt assistance
Ferguson urges current and former students never to pay upfront for help with student loan debt relief. For information on legitimate sources of free assistance, contact the Consumer Financial Protection Bureau or the National Consumer Law Center.
For problems with your student loan servicer or a debt collector contact the U.S. Department of Education’s Student Loan Ombudsman at 1-877-557-2575 or www.ombudsman.ed.gov, the Consumer Financial Protection Bureau, or file a complaint here.