Can You Get Student Loans After Filing for Bankruptcy?
Yes, you can get student loans after filing for bankruptcy, but your eligibility depends entirely on the type of loan you need. While bankruptcy is a significant financial event, it does not permanently bar students or parents from accessing funds for higher education. The federal government and private lenders view bankruptcy differently, creating distinct paths for securing financial aid.
For most families, the good news is that federal student loans for undergraduates do not require a credit check, meaning a past bankruptcy has no impact on eligibility. However, PLUS loans and private student loans involve credit reviews where bankruptcy will be a factor. Navigating these rules requires understanding which doors remain open immediately and which ones may require additional steps, such as an appeal or a cosigner.
This guide covers exactly how bankruptcy affects your ability to borrow for college. You’ll learn the specific eligibility rules for federal and private options, how to appeal adverse credit decisions, and strategic timelines for applying. Whether you are a parent managing family finances or a student planning your future, this article provides the roadmap to funding your education without letting past financial challenges stand in the way.
Understanding bankruptcy’s impact on student loan eligibility
To navigate college financing effectively, it is essential to understand how bankruptcy appears on a credit report and why it matters differently to various lenders. Bankruptcy is a legal process that helps individuals repay or discharge debts under the protection of the bankruptcy court, typically filed under Chapter 7 or Chapter 13.
According to the Consumer Financial Protection Bureau, a Chapter 7 bankruptcy, which involves liquidating assets to clear debt, generally remains on a credit report for 10 years from the filing date. A Chapter 13 bankruptcy, which involves a repayment plan, typically stays on the report for 7 years. During this time, the bankruptcy serves as a signal to potential lenders about credit risk, but the interpretation of that signal varies.
The fundamental difference lies in how lenders evaluate creditworthiness:
- Federal Student Loans: The Department of Education does not use credit scores. Instead, for specific loan types, they look for “adverse credit history.” This is a binary determination—you either have it or you don’t—based on specific regulatory definitions.
- Private Student Loans: Private lenders use a traditional underwriting model that relies heavily on credit scores (FICO) and debt-to-income ratios. According to FICO, bankruptcy significantly lowers a credit score by 130 to 240 points depending on your starting score, posing a steeper hurdle for private lending.
It is also important to note that while bankruptcy affects your ability to get new loans, it rarely eliminates existing student loan debt. Most student loans are non-dischargeable in bankruptcy unless you can prove “undue hardship,” a rigorous legal standard. For more details on managing current debt, review our guide on student loan discharge in bankruptcy.
Lenders also distinguish between a recent filing and an older one. A bankruptcy discharged two years ago is viewed more favorably than an open case. Understanding these nuances allows you to target the funding sources where you are most likely to be approved.
Federal student loans after bankruptcy: your primary option
Federal student loans should be the first stop for any student or parent, especially those with a history of bankruptcy. The federal system is designed to prioritize access to education over credit perfection. For the 2025-2026 academic year, the rules remain clear and largely favorable for undergraduate borrowers.
The most accessible loans are Direct Subsidized and Direct Unsubsidized Loans. These loans do not require a credit check. This means your bankruptcy status, credit score, or credit history are completely irrelevant to your eligibility. As long as you meet basic federal criteria (such as U.S. citizenship or eligible non-citizen status) and complete the FAFSA, you can qualify.
According to StudentAid.gov, for dependent first-year undergraduates in 2025-2026, the aggregate loan limit is $5,500. Independent students (and dependent students whose parents are denied PLUS loans) can borrow up to $9,500 for their first year. These limits increase for subsequent years of study.
Direct PLUS Loans, which include Parent PLUS Loans and Graduate PLUS Loans, operate differently. While they do not use a credit score, they do require a check for “adverse credit history.” According to Federal Student Aid regulations, a bankruptcy discharge within the past five years is considered adverse credit history.
If you apply for a PLUS loan and your bankruptcy was discharged more than five years ago, you will typically pass the credit check, assuming no other adverse items (like wage garnishment, tax liens, or recent delinquencies) appear on your report. If the discharge was within the last five years, your application will likely be initially denied. However, a denial is not the end of the road; specific appeal routes exist to help families secure funding despite this determination.
| Loan Type | Borrower | Credit Check Required? | Bankruptcy Impact |
|---|---|---|---|
| Direct Subsidized | Undergraduate Student | No | None |
| Direct Unsubsidized | Undergraduate/Graduate | No | None |
| Parent PLUS | Parent | Yes | Denied if discharge is within 5 years (unless appealed) |
| Grad PLUS | Graduate Student | Yes | Denied if discharge is within 5 years (unless appealed) |
Source: StudentAid.gov (Credit requirements current as of 2025)
Because federal loans offer protections like income-driven repayment plans and forgiveness programs, maximizing these options is crucial. For a deeper dive into these programs, read our complete guide to federal student loans.
Appealing adverse credit determinations for PLUS loans
If you are denied a Parent PLUS or Graduate PLUS loan due to a bankruptcy discharge within the last five years, you have two specific paths to overturn the decision and secure funding. The Department of Education provides these options to ensure that credit history does not unfairly prevent access to education when families have the ability to repay.
You can appeal the decision by proving that extenuating circumstances led to the adverse credit history. This process involves submitting a request to the Department of Education along with supporting documentation. Successful appeals often involve events beyond your control that directly contributed to the bankruptcy, such as:
- Divorce or legal separation decrees
- Medical bills or proof of illness
- Documentation of job loss or reduction in income
The Department reviews these on a case-by-case basis. If you can demonstrate that the financial event was isolated and you have since regained financial stability, your appeal may be granted.
An endorser is similar to a cosigner. This is someone who agrees to repay the Direct PLUS Loan if you do not. An endorser cannot have an adverse credit history of their own. If you have a relative or friend with good credit who is willing to support your education, this is often the fastest route to approval.
The endorser must complete an endorser addendum on StudentAid.gov. Unlike private loan cosigners, the endorser is only responsible for the specific PLUS loan they endorse, not your entire financial profile.
If you qualify for a PLUS loan through either an appeal or an endorser, you must complete PLUS Credit Counseling. This is an online module on StudentAid.gov that takes about 20-30 minutes. It helps ensure you understand the obligations of the loan and how to fit the payments into your budget.
Timing Tip: The appeal process can take several weeks. If you anticipate a denial due to recent bankruptcy, start your application process as early as possible—ideally 2-3 months before tuition is due—to allow time for document submission and review.
Private student loans: credit score requirements and cosigner strategies
Private student loans fill the gap when federal aid isn’t enough, but they are generally harder to access after a bankruptcy. Private lenders are profit-driven businesses that assess risk primarily through credit scores. According to FICO, a bankruptcy filing typically results in a credit score drop of 130 to 240 points depending on your starting score, often pushing borrowers below the threshold for approval.
According to Credible’s analysis of private student loan requirements as of 2025, most private lenders require a minimum FICO score of roughly 650 to 670 to even be considered. Furthermore, a bankruptcy on your credit report is often an automatic disqualifier for many major lenders for a period of 2 to 7 years, regardless of your current numerical score. Lenders view recent bankruptcy as evidence of high default risk.
Because of these strict standards, students or parents with a recent bankruptcy on their record will almost certainly need a creditworthy cosigner to qualify for a private loan. According to Mark Kantrowitz, financial aid expert, “Most students will need a cosigner to qualify for a private student loan.” This is especially true for borrowers recovering from major financial events.
Applying with a cosigner changes the lender’s focus from your credit history to the cosigner’s. If your cosigner has a strong credit score (typically 720+) and steady income, you can often get approved at competitive rates, even with a bankruptcy on your own report. The cosigner agrees to be equally responsible for the debt.
When asking someone to cosign, be transparent about the responsibility. It impacts their debt-to-income ratio and appears on their credit report. To improve your chances:
- Choose a cosigner with a low debt-to-income ratio.
- Look for lenders that offer “cosigner release” programs, which allow you to remove the cosigner from the loan after you make a certain number of on-time payments (usually 12-48 months) and meet credit criteria.
If you must apply for a private loan without a cosigner, timing is critical. Wait until your credit score has recovered to at least the mid-600s. Additionally, some lenders have specific “aging” requirements, meaning they will only lend to you if the bankruptcy discharge was at least 24 months ago. Applying too early will result in a hard credit inquiry and a denial, which can further damage your score.
If you have a willing cosigner or have rebuilt your credit sufficiently, you can explore your options to see what rates are available.
Timeline strategies: when to apply for student loans after bankruptcy
Successful college financing after bankruptcy requires careful attention to the calendar. The date of your bankruptcy discharge—not the filing date—is the clock that lenders watch. Aligning your application timeline with lender rules can mean the difference between an automatic denial and an approval.
- Federal Direct Sub/Unsub Loans: No waiting period. Available immediately.
- Federal PLUS Loans: 5-year wait for automatic approval; immediate application possible with appeal/endorser.
- Private Student Loans: Varies by lender. Typically 2–7 years required without a cosigner.
For Direct Subsidized and Unsubsidized loans, you can complete the FAFSA and accept loans as soon as your school processes your aid package. There is no statutory waiting period. If you are in the middle of a Chapter 13 repayment plan, you may need court trustee permission to incur new debt, so check with your bankruptcy attorney before accepting the funds.
If you are a parent seeking a PLUS loan and are nearing the five-year mark since your discharge, calculate carefully. If the academic year starts in September, but your five-year anniversary is in October, applying in August might trigger a denial. In such edge cases, it might be strategic to use other funding sources for the first semester and apply for the PLUS loan for the second semester once the adverse credit history window has closed.
College is a multi-year financial commitment. You might need a cosigner for freshman year, but with diligent credit habits, you could qualify for private loans on your own by junior or senior year. Map out a four-year funding plan rather than just solving for the immediate semester. This perspective reduces stress and allows you to measure your credit recovery progress against future tuition bills.
Rebuilding credit to improve loan options
While securing funding for the current semester is the priority, simultaneously rebuilding your credit is the best investment for future years. Improving your credit score increases your chances of qualifying for private loans independently and eventually removing a cosigner from your obligations.
One of the most effective tools for rebuilding is a secured credit card. These cards require a cash deposit that acts as your credit limit. Because the deposit eliminates risk for the issuer, approval is high even shortly after bankruptcy. Use the card for small, necessary purchases—like gas or groceries—and pay the balance in full every single month. This positive payment history is reported to credit bureaus and begins to offset the negative impact of the bankruptcy.
If a family member has a credit card with a long history of on-time payments and low utilization, ask to be added as an authorized user. Their positive history for that specific account will appear on your credit report, potentially giving your score a quick boost. This strategy does not require you to ever use or even possess the card.
According to FICO, two factors drive the majority of your credit score recovery:
- Payment History (35% of score): Never miss a payment. A single late payment post-bankruptcy can be devastating to your recovery efforts. Set up autopay for all bills to ensure consistency.
- Credit Utilization (30% of score): Keep your credit card balances low relative to your limits. Aim to use less than 30% of your available credit; using less than 10% is even better.
Regularly check your credit reports to ensure the bankruptcy is reporting correctly (showing a zero balance on discharged debts) and that no new errors have appeared. You can access these reports for free at AnnualCreditReport.com.
Alternative funding options while rebuilding credit
If loans are not enough or if credit barriers prove too high for the full amount needed, alternative funding strategies can bridge the gap. These options do not rely on credit scores and can reduce the total amount you need to borrow.
Almost every college offers a tuition payment plan. Instead of paying the full semester bill in one lump sum, you split the cost into monthly installments over the course of the semester (usually 4-5 months). These plans typically charge a small enrollment fee ($30-$100) but charge no interest and require no credit check. This is often the smartest way to handle a funding gap of a few thousand dollars.
Financial aid offices have discretion to award emergency grants or additional aid based on special circumstances. If your bankruptcy was caused by a recent job loss or medical crisis, file a “professional judgment” review or financial aid appeal with the school. They may be able to adjust your Cost of Attendance or offer institutional grants that do not need to be repaid.
If financing a four-year private university is currently impossible due to credit constraints, consider the “2+2” strategy. Students can attend a community college for two years—where tuition is often covered entirely by federal grants and basic Direct Loans—while the family rebuilds credit. After two years, the student transfers to the university to complete the degree, by which time the family’s eligibility for private loans or PLUS loans may have been restored.
For more ideas on funding without loans, explore our guide to scholarships and financial aid opportunities.
Navigating college financing after bankruptcy is challenging, but it is far from impossible. By understanding the rules and leveraging the right resources, you can secure the education you or your child deserves. The path may require more paperwork and strategic planning, but the doors to higher education remain open.
- Federal Loans First: Maximize Federal Direct Subsidized and Unsubsidized loans immediately, as they do not require a credit check.
- Understand the Lookback: PLUS loans have a 5-year adverse credit lookback period. If you fall within this window, prepare to appeal or use an endorser.
- Private Loans Need Strategy: Expect to need a creditworthy cosigner for private loans until your own credit score recovers significantly.
- Rebuild Actively: Start rebuilding credit now with secured cards and on-time payments to improve your eligibility for future academic years.
Don’t let the stigma of bankruptcy prevent you from applying for aid. Complete the FAFSA, talk to your financial aid office, and explore all available options.
If you are ready to explore private lending options with a cosigner, you can check current rates to see what you qualify for.
Resources for students with bankruptcy history
Use these trusted resources to manage your application process and monitor your financial recovery.
- StudentAid.gov: The official portal for FAFSA, federal loan counseling, and PLUS loan appeal forms.
- AnnualCreditReport.com: The only federally authorized source for free weekly credit reports to monitor your bankruptcy reporting and recovery.
- College Finance FAFSA Guide: Step-by-step instructions for completing your federal aid application correctly.
- Income-Driven Repayment Options: Learn how federal loan payments can be adjusted based on your income after graduation.
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