For many parents, getting their children through school and ready to apply for college is a significant priority. Once the children are ready to start the application process, the question of how they (and their parents) are going to pay for the expenses is front and center. For parents who have filed for bankruptcy, there can be a concern as to how this will impact their child’s eligibility for Federal Student Aid.

What is a FAFSA?

The FAFSA, or Free Application for Federal Student Aid, is the form that parents and children fill out to apply for federal grants, loans, and work-study funds for college. The FAFSA program is overseen by the U.S. Department of Education and is a critical source of funds for millions of students. The information the parents and children include in the child’s FAFSA will determine his or her eligibility for federal grants and federal loans.

Student Loans and Bankruptcy

Children of parents who have filed for bankruptcy will not be prohibited from filing for federal student loans on that basis. Because the child is the obligated party, a parent’s credit or bankruptcy history will have no bearing on their ability to apply for and be approved for the individual loans available through their FAFSA.

Student Grants

Your child’s FAFSA will also be reviewed to consider their eligibility for certain types of grants. A parent’s bankruptcy should not impact the child’s qualification for this type of assistance.

Parent/Plus Loans

A common type of loan associated with college debt is the Parent/Plus loan. This type of loan allows parents to borrow money for their child’s education through a federal student loan program at a fixed interest rate. However, if you have “adverse credit history,” including having declared bankruptcy in the past five years, you will not be eligible to take out this type of loan.

In sum, your bankruptcy will not impact your child’s ability to apply for his or her own loans to pay for college or to be eligible for certain types of grants. However, if you have filed for bankruptcy in the last five years, you will not be able to secure a Parent/Plus loan to assist with their expenses.

We understand the importance of managing your debts while planning for your child’s future and can help you explore your options. Please contact us online or by phone if we may be of assistance.    http://bestmichiganlawyer.com/contact .