Can I File Bankruptcy on SoFi or Laurel Road Student Loans?


Dear Steve,

I have $180k in parent plus student loans debt serviced by mygreatlakes.

If I refinance this debt with a private lender like sofi or laurel road, can it be more easily discharged in a future bankruptcy or is it still considered a federal student loan and subject to the more strict discharge rules?



Dear Scott,

If you refinance federal loans with private loans the federal loan status does not carry. It is a new loan paying off and replacing an old loan.

However, unless there are underlying reasons why the loans could be discharged, like job loss, health issues or debilitation of some kind, then defaulting on the loans and letting them expire past the statute of limitations is the logical approach. How long that will take is dependent on the laws in your state.

When you default it will hurt your credit and you may be sued.

Keep in mind with Parent Plus loans you do have the option of moving them into a Direct Consolidation Loan and opting to repay them on the Income Contingent Repayment plan. Private student loans will not give you such options.


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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