Student Loans after Bankruptcy

Students or prospective students often want to know if they can still secure student loans after filing for bankruptcy. Student loans are guaranteed loans. This means that the U.S. government has promised lenders that the money they lend to students will be paid back.  Because of this, an applicant’s credit rating has no bearing on the approval of federally-backed student loans. In fact, the only people who are denied guaranteed federal student loans are those who have defaulted on previous student loans and have failed to make payment arrangements with their guarantor or those convicted of felony offenses.

Denied for a Student Loan

There are, however, also private lenders who provide student loans.  These are more like traditional student loans because they are backed only by the signature and/or collateral of the borrower.  Lenders do tend to rely on credit reports when granting these types of loans.  Although some lenders have slightly more relaxed credit requirements for those applying for student loans, a recent bankruptcy will likely cause an applicant to be denied.

If your bankruptcy is more than ten years old and you’ve rebuilt a fairly decent credit history since then, it’s possible, however, that you will still be able to secure a student loan from a private lender.  It depends on each lender’s individual credit criteria.  Those who are unsure of their current credit rating are encouraged to check their credit bureau report prior to applying for non-government subsidized student loans.