What Are Your Chances of Getting a Student Loan After a Bankruptcy Discharge?

With more and more younger people acquiring debt, and more and more adults going back to obtain a college degree, it is not unusual that some of these future students have filed a bankruptcy. So if an individual has filed bankruptcy, and needs student loans to pay for his or her education, ‘What are the chances he or she can get a student loan if he or she, or even his or her parent, has filed a bankruptcy?’

The answer to whether a student loan is obtainable post-bankruptcy discharge depends on the type of student loan, private or federal, the borrower is seeking. A shorter answer is while federal student loans are based on the borrower’s financial needs, private student loans take a borrower’s credit worthiness into consideration. In fact, 11 U.S.C. 525 forbids any federal agency that provides grants and loans to student borrowers from discriminating against him or her if he or she has filed for bankruptcy. Further, since private student loans are generally credit worthiness based, even if you have not filed a bankruptcy, if your parents have, using them as a co-signor on a private student loan may not be a good course of action.

Bottom-line, though, if you are considering filing for bankruptcy or have a bankruptcy discharge on your credit record, talk to your school’s finance office to determine what monies you are eligible for.