As a result of a legal victory in August, Washington State Attorney General Bob Ferguson announced that a $418,000 judgment has been entered against a student loan debt adjusting company that overcharged Washington state students and collected unlawful fees.
According to the Attorney General’s Office (AGO), StudentLoanProcessing.US (SLP) and its president, Peter 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.
The AGO says that all 86 victims from Washington State will receive full refunds of the money they paid to SLP. The refunds will be distributed by the Attorney General’s Office.
“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 that 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 the U.S. Department of Education (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 DOE, and typically takes four to six weeks to complete.
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.
