Can I Apply for New College Loans if I’m Already in a Bankruptcy? – Nicole

“Dear Steve,

Already in a chp 13 plan, no problems there.

How would enrolling in a grad school program affect my CH 13 plan? I have tried to email/call my atty with no response to this.

I am needing either loans and or scholarship. My employer will also reimburse for a small amount of the 20-35K it will take for my masters.

Will any financial aid affect me? Please advise.


Dear Nicole,

As long as you can continue to fund your chapter 13 bankruptcy plan I can’t see how it would affect it at all. If you were no longer able to fund it as scheduled you’d either need to modify the repayment plan or convert it to a chapter 7 bankruptcy. Both of those options would cost you an additional attorney fee.

Bankruptcy is not an exclusion for government backed student loans. The only issue I am unsure about is if the bankruptcy needs to be discharged for eligibility on future loans. Talk to your college financial aid office about this.

As a result of the Bankruptcy Reform Act of 1994, a student may not be denied SFA loans, including Perkins Loans, solely on the basis of a bankruptcy determination. – Source

Please post your responses and follow-up messages to me on this in the comments section below.


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1 thought on “Can I Apply for New College Loans if I’m Already in a Bankruptcy? – Nicole”

  1. Hi Steve, 
    I just came across your site while searching thru the internet. I work in the student loan industry. There are several reasons why you would be denied a loan a student loan. Chapter 7,11, or 12 bankruptcy that has not been discharged for at least 5 year, foreclosure, accounts 90 or more days delinquent, accounts in collections, charge offs, wage garnishment, voluntary surrender or repo, and tax liens, there might be more but I have brain fog. A chapter 13 is not a denial reason however, if the credit check that is run shows an account in collection that is included in the bankruptcy it will trigger a denial. If denied the person has 3 options – endorsement, talk with Financial for other funding options or appeal the decision. If the borrower chooses to appeal then they would need to provide documentation stating the account has been corrected or included in a chapter 13. On studentloans.gov there is a learn more tab which explains “extenuating circumstance” ie: credit denials.  


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