Question: Only the Stafforad-type loans that can only provide up to around $7K/year disregard bad credit.

The heavily relied-upon PLUS loans require 5 years of no adverse history.

Something isn’t right when someone can easily get car loans and credit cards right after a bankruptcy, but be denied something more important.

What is more unfair is that these PLUS loans are government-insured (Uncle Sam is your cosigner), and protected from discharge in bankruptcy unless there is an extreme hardship.

A 2 year adverse history would be much fairer, or the availability of a higher-interest rate option like is done with car loans.

Answer: I agree in general but disagree specifically because:

1. Per 11 USC sec. 525(c:

“A governmental unit/loan program/person engaged in the business of making guaranteed/insured student loans may not discriminate against someone solely because they have filed for bankruptcy.”

Excluding any with BK for five years unconditionally is a clear contradiction!

2. These loans cannot be discharged by BK execpt for extreme hardship.

3. Most other credit can be obtained MUCH sooner after a BK, including unsecured credit cards which cause far more BK’s than student loans. It is generally agreed that two years out of a BK with subsequent good history is good enough for most things. no, not if the bankruptcy was not the SOLE consideration. they still have the right to consider the applicant’s payment history prior to the bankruptcy. bankruptcy may discharge the debts, but it doesn’t wipe out a bad credit record. duh.

if you screw up your credit, be prepared to pay for that mistake for at least 7 years, bankruptcy or not.

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