06.05.09 | Parent Plus Loans and Bankruptcy
You might think that if you have recently filed Ch. 13 bankruptcy that this will automatically disqualify you for a Parent Plus loan. Some parents even count on this, so their child can get more in the unsubsidized Stafford loan.
Well this is not always the case. I have found recently that Direct loans approves people who have a bankruptcy status because they do not consider it to be an adverse action on your credit report. I had a lengthy exchange with a very frustrated mom who searched for answers as to why she got approved for this loan when the terms of her bankruptcy clearly stated they couldn’t take on any more debt. To read the exchange click here.
Also keep in mind that I have found most FFEL lenders will not approve someone for a Plus Loan with a recent bankruptcy showing, so clearly they US Dept of Education and the private lenders do not use the same criteria for Plus loan approval.
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