Bankruptcy Financial Aid: Can I Still Get a Student Loan?

Yes, bankruptcy financial aid is possible, so don’t give up on your dreams of higher education. In Georgia, there is the HOPE scholarship and access to several public colleges. Although, the cost of a post-high school education is high, especially for debtors who are coming out of bankruptcy. This leads to the question of whether one can obtain public or private student loans after filing bafor nkruptcy. Often, a debtor who filed bafor nkruptcy did so due to a job loss or change of circumstances. Obtaining additional education is one way of increasing earning potential and marketability and even changing career paths.

Get ready, because there is some good news regarding student loan programs and the bankruptcy code.


Federal Student Loans and Bankruptcy

A past bankruptcy has no impact on your eligibility for obtaining federal student aid. Federal aid administrators cannot use a past bankruptcy as evidence of unwillingness to repay student loan debt. Provided that there are no loans currently in default that were through a bankruptcy discharge proceeding, you are in the clear. (Generally, federal loans for educational purposes cannot be discharged through bankruptcy unless the debtor shows “undue hardship,” which is a very high bar.)

If you do have outstanding education loans that are in default, these must be cleared up before you can receive additional financial aid. If you are in need of financial aid and have defaulted on old loans, the best course is to contact the lender and set up a payment plan. Once you do this, you will be eligible for additional aid. It should also be noted that schools are allowed to consider credit-history post-bankruptcy financial aid in their decision-making process.

PLUS loans, which are loans that are offered to parents of students or to graduate students, are a different situation. Are you a parent applying for a PLUS loan or graduate student applying for a Grad PLUS loan with an adverse credit history? For example, have you filed bankruptcy within the past five years? You may be denied. Usually, a debtor can still get a loan if he/she gets an endorser with strong credit.


Bankruptcy Financial Aid

Private lenders, on the other hand, can and do consider a past bankruptcy when deciding whether to issue a loan. Many lenders have eligibility criteria that will not allow them to lend money to people who have had a bankruptcy within the past seven to ten years. Nonetheless, a parent’s bankruptcy will have no impact on a child’s eligibility to receive a private loan unless the parent is required to cosign on the loan for the borrower.

Private loan companies consider some types of former debtors better risks than others. For example, a Chapter 7 bankruptcy is perceived as more adverse than a Chapter 13 bankruptcy, especially if the Chapter 13 filer had a 100% payout plan. Even so, the fact that person who filed a Chapter 13 can refile quickly is also taken into consideration and may have a negative impact.


Bankruptcy and Financial Aid with CMC Law

If you are considering filing for bankruptcy and plan to further your education, it is crucial to discuss your options with a qualified attorney. Don’t let bankruptcy affect pursuing a college degree. Your current financial situation shouldn’t steer you away from getting ahead in life.

CMC Law is here to help. For a free consultation please contact the Law Offices of Charles Clapp at (404) 585-0040.


Charles is absolutely a brilliant attorney! He is a critical thinker and determined problem solver. He is very accessible, even via text. If he is in court, his ability to multi-task, you can feel safe and secure in knowing he is handling any issues or concerns. I entrust him with my future, he is a uniquely talented attorney who always challenges himself to achieve the absolute best outcome for his clients.



I was very satisfied with Mr. Clapp services. He is a man of his word and did everything he told me he would. I would highly recommend him.



I came to Mr. Clapp by referral with a complicated case involving both personal and business debts that were out of control. Mr. Clapp evaluated the situation and gave me options that I was not even aware of. He knows his stuff, executed flawlessly, and I have been able to start over. I highly recommend Charles Clapp if you have debt or bankruptcy issues. Listen to his advice, he knows his stuff. I consulted with several other bankruptcy attorneys prior to retaining Mr. Clapp, and they did not have the same breadth of knowledge that Mr. Clapp brought to my case.



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