FAQ #3: Will bankruptcy hurt my chances of co-signing for my children’s student loans?

Generally, any time a loan is applied for, the lender will evaluate the creditworthiness of both guarantors. An adverse credit history of one co-signer may result in the denial of the loan. However, the ability of a parent to co-sign their children’s loans (including student loans) largely depends on the lender and the type of loan.

For example, a parent may be able to co-sign for Stafford Loans (federally guaranteed student loans) shortly after bankruptcy, but will have difficulty co-signing a PLUS loan if less than 5 years have passed since discharge. These requirements are built into the lending structure for student loans, and reflect the individual requirements for each financing option. In other words, it depends on the loan and you should consult with a college financial aid expert or an attorney.

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