I inadvertently stumbled across this older thread, but felt the need to comment given that many have commented throughout the years (it is still relevant) and the thread contains a number of misconceptions and potential pitfalls for those relying on the advice contained herein.
1.) Be weary of debt management companies. Many of them will try to tell you to settle your debts. What they don't tell you is that it will show up as a settlement on your credit report (i.e. marked paid for less than the original principal), adversely affecting your score and affecting the potential for private student loans. Moreover, once the amount of debt exceeds a certain dollar value, then the creditor is required to issue a 1099 and report it to the IRS as income. In short, you can end up increasing your tax liability, potentially creating other problems.
2.) Federal Stafford Loans are not dependent on your credit score and negative items (so as long as you haven't defaulted on a student loan) will have no bearing on these whatsoever.
3.) Federal Grad Plus Loans are dependent on your history. Applicants with an adverse history will be denied. See 34 CFR 685.200(c)(1)(vii)(B). An adverse history includes a delinquency of 90 days or more on any debt, or any default determination within five years to include foreclosure, repossession, tax liens, wage garnishment, chargeoffs, or default on student loan. Bankruptcy discharges within a five year period are also disqualifying. Note, however, that current Department of Education policy does not consider a Chapter 13 bankruptcy as an "adverse credit history" although Chapters 7, 11, 12, and 15 are. If you file for bankruptcy, it may be worth consulting with a Chapter 13 bankruptcy expert. Under Chapter 13, the debtor must make structured payments to creditors in a payment plan that lasts a minimum of three years and a maximum of five years. If you are in a Chapter 13 bankruptcy in medical school (very difficult to do because you must have income to continue the Chapter 13), you can acquire student loans, but must receive court approval to incur any new debt.
If a student does have an "adverse credit history," it is always noteworthy that he or she can have a qualified co-signor (who is able to pass the requirements above) and still receive Grad Plus Loans. In order for this to apply to previously defaulted student loans, the old loan must be rehabilitated. Appeals for "extenuating circumstances" can also be had, but this is a pretty daunting standard. For instance, being laid off from a job or other (non-medical) loss of income usually good enough.
I hope this post is helpful to others in the future. Please note that nothing in this post should be construed as legal advice and it is being provided to aid in your own research of the subject matter. Nothing in this post should be substituted for the advice of competent counsel or other qualified professional(s).