In the painful world of student loan debt, there’s nothing harder than dealing with fraudulent companies looking to prey on those in need of help. Recently, Student Loan Processing.US was dragged into federal court for being one such malicious company. Much like the usual scam practices expected from this kind of business, promises of relief were made but never delivered upon. Worse yet, desperate students were left in even worse financial affairs. But that’s about to change.
On Tuesday, a federal court judge issued an order to the company to shut down within 45 days. Additionally, Student Loan Processing.US will reconcile its ill-gotten finances by repaying students who used the company’s “services,” along with any other damages found by the court.
This has been a lengthy process which started in 2014, the last hallmark case to finally shut the company down. Initially investigations began with the Consumer Financial Protection Bureau, who discovered student-borrowers were charged without receiving services from the company, along with hidden monthly costs attached to their education loans and a false claim they were affiliated with the Department of Education.
Richard Corday, Director of the CFPB, remarked that student-borrowers looking for aid with loans were instead exploited for totals which breached the millions collectively. James Krause, owner of the currently investigated company, is facing severe penalties as well. For the CFPB, this is yet another entry in a long list of companies like Student Loan Processing.US.
Typically, the CFPB finds a chain of similar traits among predatory businesses. Many will boast services or consolidations to lure uncertain student-borrowers into paying upfront fees. The associated fee is supposed to cover the actual service that’s never received. In other cases, scam companies will charge for free services offered by the Department of Education such as direct consolidation, even going so far to claim an authentic affiliation with the Department of Education.
The CFPB continues to investigate more of these cases every year, and remain critical of the processes which led to so many scam companies popping up. From private bank lenders and servicers not clarifying better payment plans to the severity of financial debt, the ingredients created a dire financial situation. Desperate for help, those in need turned to answers which, unfortunately, left them with no solutions and even more crippling debt.
For now, Student Loan Processing.US will be barred from entering the loan market again and will be responsible for more than $300,000 in damages. It’s a message that exploiting graduated students won’t be taken lightly.