Does bankruptcy affect my ability to get new student loans?

Yes, and no.

Bankruptcy does not discharge your student loan obligations (except from some fairly rare cases).  This means that lenders generally understand that your current bankruptcy isn’t going to affect the requirement that you pay them back in the future.

This means that you will still be able to get Federal Stafford subsidized and unsubsidized loans.  You can still get Pell Grants.

However, some student loans require that you have healthy credit, and a bankruptcy will affect your ability to get PLUS loans (“Parent Loan for Undergraduate Students”).  A PLUS loan requires that you are creditworthy, and you will probably NOT qualify for the PLUS loan if you have an “adverse credit history,” including:  a recent foreclosure, recent bankruptcy discharge, charge-offs (especially of old student loan debt), a recent deed in lieu of foreclosure, a recent or ongoing wage garnishment, a recent repossession, and any tax lien or ORS lien (child support lien).

Additionally, although you can normally apply for and obtain private student loans, those lenders will run a credit check on you, and your bankruptcy may hurt your chance of taking out these loans.  This doesn’t really make sense since bankruptcy wouldn’t discharge those loans, but the bk is still taken into consideration before they will lend you money for school.

2 thoughts on “Does bankruptcy affect my ability to get new student loans?

  1. Josh

    Isn’t it true that the reason most bankruptcies don’t discharge student loan debt is because most people who file for bankruptcy do not ask for it?
    99.9% of those that have educational debt and file bankruptcy don’t ask for forgiveness according to a Harvard law school study.
    40% of those who do request for relief from student loans in bankruptcy are granted partial or total discharge of loans by the court.
    70,000 people each year that file bankruptcy qualify to discharge some or all of their student loans in their bankruptcy filing.

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