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CFPB Takes Action to Shut Down Illegal Student Debt Relief Scheme
Wednesday, March 16, 2016 6:40 AM

Student Loan Processing Website/Owner Charged Student Loan Borrowers Millions in Illegal Fees

Tuesday, the Consumer Financial Protection Bureau requested that a federal district court enter a final judgment and order that would shut down a student debt relief scheme that charged borrowers millions of dollars in illegal upfront fees for federal student loan services. If approved by the court, the proposed judgment would ban the company, Student Loan Processing.US, and its sole owner James Krause, from any future involvement in debt relief and student loan services. The order would also require the company to pay refunds to thousands of harmed consumers and a civil money penalty.

“Student Loan Processing.US and its owner, James Krause, preyed upon students looking for loan repayment help and fleeced them out of millions,” said CFPB Director Richard Cordray. “The Bureau is taking action to shut down the unlawful operation permanently and to prevent the company and its owner from participating in the student lending and debt relief industries ever again.”

Student Loan Processing.US is headquartered in Laguna Nigel, CA, with an office in Dallas, Texas. The company also operates under the name IrvineWebWorks, Inc. and runs websites at,, and The student debt relief company has been in operation since at least May 2011, and its customers are located throughout the United States. James Krause is the company’s founder, president, and sole owner.

According to the CFPB lawsuit, Student Loan Processing.US illegally marketed and sold services promising to advise and assist borrowers applying for Department of Education student loan repayment programs. The company charged consumers an initial enrollment fee for its services of 1 percent of the borrower’s federal student loan balance plus a monthly maintenance fee of at least $39 per month for the entire repayment term of the borrower’s federal student loan.

During initial enrollment calls with customers, the company’s representatives failed to disclose the recurring monthly fee before collecting payment information from the customer. The complaint alleges that the defendants also misrepresented the amount and duration of that fee.

If the proposed consent judgment is entered by the court, Student Loan Processing.US and Krause must:

  • Shut down illegal operations.

  • Cancel all contracts with consumers and stop charging them.

  • Stop participating in the debt relief and student loan industries.

  • Ensure student loan borrowers do not miss important repayment benefits.

  • Pay a civil penalty. 

The proposed final judgment and order filed today follows a Feb. 5, 2016, court ruling in favor of the CFPB on its claim that the defendants violated the Telemarketing Sales Rule by charging customers an advance fee before providing the debt relief service they advertised. That ruling also found in favor of the CFPB on its claims that the defendants violated the Telemarketing Sales Rule and the Dodd Frank Act’s prohibition against deceptive acts or practices by collecting payment information from customers before disclosing the total cost of the company’s services.

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