Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

Nov 10 2015

Washington consumers will receive full restitution

SEATTLE — Following a legal victory in August, Attorney General Bob Ferguson today announced a $418,000 judgment has been entered against a student loan debt adjusting company that overcharged Washington state students and collected unlawful fees.

StudentLoanProcessing.US (SLP) and its president, James Krause, will pay $144,896 to refund its customers for illegal charges and an additional $124,000 for costs, attorney’s fees, monitoring and future enforcement of the Consumer Protection Act. Another $150,000 in penalties will be suspended as long as SLP abides by the terms of the agreement.

All 86 Washington student victims will receive full refunds of the money they paid to SLP. The Attorney General’s Office will distribute the refunds. The Consumer Financial Protection Bureau has an ongoing lawsuit against the company.

“Students graduate from Washington universities with an average of nearly $25,000 in debt,” Ferguson said. “This firm preyed on students who sought their help. I will not tolerate the financial abuse of already overburdened Washington students. I’m pleased this agreement offers a measure of justice for the victims.”

Ferguson brought a lawsuit against SLP and Krause for violating Washington’s Debt Adjustment Act and Consumer Protection Act by charging illegal fees for debt adjusting and failing to inform customers of important rights as is legally required.

In an order dated Aug. 14, King County Superior Court Judge Mariane Spearman found the company had violated the law. She found SLP had violated the Consumer Protection Act more than 2,700 times. SLP charged an up-front fee for its debt adjusting services of at least 10 times the legal limit, collected monthly payments in excess of the legal limit, debited its customers’ bank accounts for payments on void contracts, and failed to make legally required disclosures in its contracts with Washington 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. The same services SLP and other student loan debt adjustment companies offer are available — for free — through the U.S. Department of Education (DOE).

Apply for U.S. Department of Education federal repayment programs for free

For most federal borrowers, the process for consolidating loans and applying for income-driven repayment plans 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 process is done through the DOE for free and typically takes four to six weeks. Learn more at Federal Student Aid's website. Income-driven repayment plans allow borrowers to pay a percentage of their discretionary income.

Free student loan debt assistance

Ferguson urges students with questions about consolidating federal student loans to contact the Department of Education’s Loan Consolidation Information Call Center at 1-800-557-7392 before applying for consolidation. The Department of Education also provides technical assistance as borrowers fill out the consolidation application online. 

Ferguson also urges current and former students never to pay up front for help with student loan debt relief. For information on sources of assistance, contact the Consumer Financial Protection Bureau or the National Consumer Law Center.

For problems with your federal student loan servicer or a debt collector contact the U.S. Department of Education’s Student Loan Ombudsman at 1-877-557-2575 or online, or file a complaint with the Consumer Financial Protection Bureau or the Attorney General’s Office.


The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.



Peter Lavallee, Communications Director, (360) 586-0725; PeterL@atg.wa.gov