Whether a prior bankruptcy will affect your ability to get new student loans depends on the type of loan you're applying for. Your credit plays a role in eligibility for federal PLUS loans and private student loans, but it's not considered for other types of federal loans and grants.
For federal student loans and grants other than PLUS loans, the government won't consider your creditworthiness by running a credit check to determine your eligibility. So, if you're applying for a Federal Direct loan, the fact that you previously filed for bankruptcy will have no bearing on your eligibility for funds.
There are two types of PLUS loans, those taken out by parents who are borrowing money for their children's education and those taken out by graduate and professional students. (A Direct PLUS Loan made to a graduate or professional student is commonly referred to as a "grad PLUS loan.")
To receive a parent PLUS or grad PLUS loan, you must
And, unlike other Federal Direct loans, you must also pass a credit check to get a PLUS loan.
In most cases, you can't get a PLUS loan if you have an adverse credit history. (34 C.F.R. § 682.201(b),(c), 34 C.F.R. § 685.200 (2024).) An "adverse credit history" consists of:
You might be able to overcome one of the above adverse credit events, including the existence of a bankruptcy discharge within five years, if you:
With either option, you'll have to complete PLUS Credit Counseling.
Not all new student loans are issued by the federal government. Banks and other financial institutions also lend money to students. In fact, the number of private student loans (sometimes called "private label loans") is increasing as the cost of higher education increases (because often federal loans and grants aren't enough to cover the expense of going to college).
Private student loan lenders act like other creditors, which means your credit history is very important to them. If you filed for bankruptcy within the past seven or ten years (bankruptcies drop off your credit reports after seven or ten years, depending on the type of bankruptcy), that will negatively affect your credit scores. The lower your scores, the less likely you'll qualify for a private student loan. If you're able to get a loan, it will likely come with a high interest rate and fees.
However, if your bankruptcy is fairly old, and you've done a lot to rebuild your credit in the meantime, it might have little effect on your ability to get private student loans.
Before you apply for a student loan that's based, at least in part, on your creditworthiness, get copies of your credit reports from each major reporting agency (Equifax, Experian, and TransUnion) from the Annual Credit Report Service at www.annualcreditreport.com. Then, review your reports to make sure they're accurate. Having errors in your credit reports can hurt your credit scores, so you want to correct any issues as soon as possible.
To learn more about student loan debt and bankruptcy, read:
If you have questions about how filing for bankruptcy might affect your eligibility for student loans in the future (or whether you can discharge your existing student loans by filing for bankruptcy), consider talking to a bankruptcy attorney.
If you need information about how student loans work and your eligibility for such loans, you could also consider talking to a student loan attorney or debt settlement attorney who deals with student loans.