Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

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.

Comments (1)

Subject: Thank you!
Comment: 
Wow, thank you! I almost called these guys after hearing their ad. They sounded like they could help me somehow get through my frustrations with FedLoan, who handles my two student loans, through the Public Employees Student Loan Forgiveness Act. FedLoan has overcharged me, forced me to fill out the IBR paperwork three times this year, and really is a nightmare to work with. Anyway, I nearly called StudentLoanProcessing because they sounded like they could do all this nightmarish work for me - heck, I would even be willing to pay a small fee to have them handle this craziness I have to deal with every year around tax time. It sounds like the fees were way too high and they were ripping people off. Just another part of the problem, not part of the solution. Regarding the Ombudsman, I looked into filing a complaint when I realized that FedLoan based a payment on gross salary, not take-home, and would refund it immediately (the process would take up to three months and force me to stay in forbearance for some reason). According to the CPBD and the Ombudsman's website, complaints must be on active situations, and you must attempt all solutions with your lender first. If everything has worked out, you can't file a complaint. In my case, not wanting to stay in forbearance because I was concerned it would impact my repayment plan, I agreed to let the overpayment (by over $200) slide. And it all went to interest. Sucks.
Posted By : Liz Ellis at 04/10/2015 at 3:01pm

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