Can You Apply for Student Loans After Bankruptcy?

You can apply for student loans after bankruptcy, and for most federal aid your filing cannot be used against you. Under 11 U.S.C. § 525(c), neither the government nor a lender making federally backed student loans can deny you a student loan solely because you filed for bankruptcy.¹ The practical picture depends on which loan you want: basic federal Direct Loans are wide open, PLUS Loans involve a credit check with a five-year lookback, and private loans sit outside the federal protection entirely.

Direct Subsidized and Unsubsidized Loans

These are the loans most people mean when they talk about federal student aid, and they are the easiest to get after bankruptcy. The Department of Education does not run a credit check for Direct Subsidized or Direct Unsubsidized Loans, so a bankruptcy on your record — active case or old discharge — does not affect eligibility.¹

You apply by filing the Free Application for Federal Student Aid (FAFSA). Approval turns on things unrelated to credit: a high school diploma or equivalent, at least half-time enrollment in an eligible program, and meeting citizenship requirements.²

For the 2025–2026 academic year, the fixed rate on Direct Subsidized and Unsubsidized Loans for undergraduates is 6.39 percent. Graduate and professional students borrowing Direct Unsubsidized Loans pay 7.94 percent.³

Clear Any Defaulted Federal Loans First

Section 525(c) blocks discrimination based on the bankruptcy itself. It does not wipe out a separate problem: if you had federal student loans in default before you filed, and those loans were not discharged, you remain ineligible for new federal aid until the default is resolved.⁴ Filing bankruptcy on its own does not cure the default on a non-dischargeable student loan.

Two paths restore eligibility:

Loan rehabilitation. You agree in writing to make nine reasonable monthly payments within a 10-consecutive-month period. The amount is based on your income, generally 10 to 15 percent of your discretionary income divided by 12.⁵
Direct Consolidation. You roll the defaulted loan into a new Direct Consolidation Loan. This restores eligibility faster but may affect benefits tied to the original loan.

If a defaulted loan is listed as part of an active bankruptcy case, your loan holder must confirm the debt is dischargeable before your school can process new aid.⁴ Contact your loan servicer and your school’s financial aid office early so this does not delay enrollment.

Get Court Permission if You’re Still in Chapter 13

If your Chapter 13 repayment plan is still active, taking on new debt requires approval. Most Chapter 13 plans prohibit debtors from borrowing without written permission from the bankruptcy trustee or the judge.⁶ The trustee looks at whether the new obligation could jeopardize your ability to finish the plan.

The mechanism is a motion for authority to incur debt, filed with the bankruptcy court.⁷ Explain the type and amount of the loan, the program you plan to enroll in, and how you will handle the new payment alongside your plan obligations. Borrowing without approval can violate your plan and put your case at risk.

If your bankruptcy has already been discharged under Chapter 7 or Chapter 13, none of this applies. You apply on the same terms as any other borrower.

PLUS Loans and the Five-Year Lookback

PLUS Loans, available to parents of dependent undergraduates and to graduate or professional students, work differently. The Department of Education runs a credit check, and a recent bankruptcy can trigger a denial.⁸

Under 34 CFR 685.200, you have an adverse credit history if a bankruptcy discharge appears on your credit report within the five years before the report date. The same five-year window applies to foreclosures, repossessions, tax liens, wage garnishments, and write-offs of federal student aid debt. Separately, debts totaling more than $2,085 that are 90 or more days delinquent or in collections within the past two years also count as adverse.⁸

If your discharge is more than five years old and nothing else on your report is adverse, the credit check should not block you. The 2025–2026 fixed rate on PLUS Loans is 8.94 percent.³

Overcoming a PLUS Loan Denial

A denial for adverse credit is not final. You have two routes back to approval, and either one requires you to complete mandatory PLUS credit counseling before the money is disbursed.⁹

Adding an Endorser

An endorser functions like a cosigner. This person agrees to repay the loan if you do not, and they must not have adverse credit of their own. The endorser fills out an Endorser Addendum online and goes through a separate credit check. If the endorser also has adverse credit, they cannot serve.¹⁰ For Parent PLUS Loans, the endorser cannot be the student you are borrowing for.

Appealing With Extenuating Circumstances

You can appeal if the adverse determination was made in error, is missing information, or relies on outdated data. The Department of Education points to situations like errors on your credit report, accounts that do not belong to you, or identity theft.⁹ You submit documents supporting your claim and showing how you are resolving the adverse accounts. Appeals go through studentaid.gov.

The Required Counseling

If you qualify through an endorser or an approved appeal, you must complete a special PLUS credit counseling session before the loan disburses. It is separate from standard entrance counseling.¹¹ Any PLUS borrower can take it voluntarily, but it is only mandatory when you were initially denied and then approved by one of these alternative routes.

Private Student Loans After Bankruptcy

Private lenders — banks, credit unions, and online lenders — are not covered by the same protection that applies to federal aid. Section 525(c) reaches government loan programs and lenders making federally guaranteed or insured student loans; purely private loans fall outside its scope.¹ A private lender can legally deny you based on a past bankruptcy or a low credit score.

Private lenders lean on credit scores. A Chapter 7 bankruptcy typically stays on your credit report for up to 10 years from the filing date; a Chapter 13 may appear for up to seven years. Through that window, most private lenders treat the filing as a significant risk. Approval usually requires a score in the mid-600s or higher, a threshold many borrowers cannot meet in the first few years after filing.

The common workaround is a creditworthy cosigner. The cosigner’s income and credit can offset the risk the lender sees in your profile, but the cosigner also takes full legal responsibility for the debt if you cannot pay. Some lenders offer cosigner release after a set number of on-time payments, though qualifying for release means meeting the lender’s credit and income standards at that later date, which can still be hard while the bankruptcy remains on your report.

If you go private, compare interest rates carefully. Borrowers with adverse credit, or with cosigners who have only moderate credit, often see rates well above federal loan rates. Exhaust your federal eligibility — Direct Subsidized, Unsubsidized, and PLUS — before turning to private options.

Steps to Strengthen Your Application

File the FAFSA early. Some aid, including grants and work-study, is awarded first-come, first-served, and an early filing gives your school time to work through any bankruptcy-related issues.
Check your credit reports. Duplicated debts, or discharged accounts still showing as active, can hurt a PLUS credit check or a private loan application. Dispute the inaccuracies with each bureau before you apply.
Resolve any federal loan defaults. If you have defaulted federal loans that survived the bankruptcy, use rehabilitation or consolidation before applying for new aid.⁵
Get trustee approval if you are in Chapter 13. File a motion to incur debt before accepting any student loan funds.⁶
Chase grants and scholarships first. Pell Grants, state grants, and institutional scholarships do not have to be repaid, and every dollar you win is a dollar you do not have to borrow.

1
Office of the Law Revision Counsel. 11 USC 525 Protection Against Discriminatory Treatment
2
StudentAid.gov. Eligibility for Federal Student Aid Infographic
3
Federal Student Aid. Interest Rates for Direct Loans First Disbursed Between July 1, 2025 and June 30, 2026
4
Federal Student Aid. NSLDS Financial Aid History
5
Federal Student Aid. Getting Out of Default
6
United States Courts. Chapter 13 – Bankruptcy Basics
7
Central District of California United States Bankruptcy Court. Motion for Authority to Incur Debt Ch 13
8
eCFR. 34 CFR 685.200 – Borrower Eligibility
9
Federal Student Aid. What to Do if Youre Denied Based on Adverse Credit History
10
Federal Student Aid. What Is an Endorser Addendum
11
Federal Student Aid. Direct Loan Counseling