Parents - Bankruptcy

[245399]

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I am an accepted MD student for the class of 2014.
My parents are strongly considering filing for bankruptcy.
How would this effect my federal, private, and institutional financial aid; including scholarships, grants, loans, need based awards, etc?
Thanks guys.

 

[sgtbrushes]

I've only done the financial aid process for undergraduate, and I am married, so it's worked a little bit differently, so please, someone else correct me if I'm wrong, but most federal loans are income-based, not credit-based. Your "credit" is based off the fact that you will have a six-figure income for a very long time, following your residency. You're a sure bet (not sure what the statistic is, but the vast vast majority of students at medical school go on to have no problems paying back their student loans in a timely fashion).

 

[TMP-SMX]

It depends on the numbers. Though new this past year was the ability to say your parents are displaced workers meaning they were laid off. This only applies to ignore assets for EFC calculation if AGI is below $50,000. Now parental assets and income don't apply for Stafford loans only the student and spousal income/assets matter. However, for need-based aid like scholarships and Perkins loans the parental EFC does apply so I'd assume being displaced may help for need-based aid. As far as I know bankruptcy is irrelevant besides the associated numbers on the taxes.

 

[dragonfly99]

Your parents bankruptcy should not affect your ability to get aid, because for grad school, it is YOU applying for the aid. For Stafford loans, which is what most med students use to pay their tuition, your parents income information is not even necessary.

If anything, your parents having no money will help you get more aid, if you happen to go to a school that gives need-based aid. This (free money like grants, etc. for students w/financial need) is not even given at all at a lot of grad schools and medical schools. The financial aid process is quite different for med school vs. undergrad. For med school people generally rely on 100% loans anyway. You start w/Stafford loans and then if you cannot get enough to cover all your expenses, you have to go get a private loan. For private loans, it would be your future income that would be looked at...as mentioned above I think that med students are typically looked on as a good risk, particularly if you yourself don't already have a ton of debt and are not delinquent on any loans that you already have.

 

[MrsCasanova]

I agree with all of the above comments. You are applying not your parents, and I don't think they need your parents credit info unless you are under 19.