Skip to content

    Have a child who’s graduating from high school this year? They’re likely not waiting another decade to attend college. They’re going soon — and they need you to help pay for it.

    Unfortunately, if you’re trying to pay for college after bankruptcy, that’s easier said than done. Bankruptcies stay on your credit for at least 7 years — nearly double the time it takes most students to complete their undergraduate degree and move into the workforce.

    So you don’t have time to waste — and with your tarnished credit and low FICO score, not to mention your status as a non-W2 self-employed professional, coming into cash isn’t as easy as it is for other parents. It’d likely be an uphill battle for any traditional bank to lend you cash, let alone the amount you need to cover four years of higher education.

    Fortunately, all hope isn’t lost. You still have a few options for making your kiddo’s college dreams come true.

    Ways to Pay for College After Bankruptcy

    • Refinance your mortgage – If you own a home, you might consider a cash-out refinance as an option. This would allow you to leverage the equity you already have in the property and turn that into a lump sum of cash you can put toward tuition, books, housing, or other costs of your son or daughter’s school. Keep in mind that because of your credit history and non-traditional job, you might need to look for a lender who specializes in these areas. (Beyond by Embrace Home Loans is a good option to consider!)
    • Take out student loans or grants – Grants and loans are a great way to cover at least some of your child’s higher education costs. Just go to to learn about which ones your child might be eligible for, and be sure to consider school-specific programs, too, if your student has chosen a university already. You can also look into scholarship programs if they’re a particularly good or high-achieving student.
    • Hire your child to work for you – This one helps in a roundabout way. For one, it gives your kid cash that they can use toward school expenses, while also likely lowering your personal and business tax burden (be sure to consult your financial advisor to be sure, though). You can then put those savings toward tuition and other college costs. This won’t hurt their chances at federal aid either. FAFSA allows students to make up to $6,300 per year and still be eligible for various grants and loan programs.
    • Join the gig economy – There are lots of opportunities to make easy, extra income in today’s society. Drive for Uber or Lyft when you have free time, become a personal shopper with Shipt or Favor or even rent out a room on Airbnb if you have the extra space. All of these options can give you added income to put toward tuition and pay for college after bankruptcy.
    • Tap your 401K –You can always tap your 401K or other savings accounts if you want to pay for college, but just keep the long-term consequences in mind and speak with your tax advisor before making any decisions. Not only will your account be earning less with a lower balance, but you also might not be able to put as much back in as you take out. If you’re nearing retirement, this can be a scary possibility. Always talk to your tax advisor if this is something you’re considering.
    • Ask friends and family –You can always ask grandparents and other family members to help out with college tuition — even as a personal loan. If you go this route, make sure to get in writing how much you’re expected to pay back, the deadline and any interest they want. You can also throw a graduation party and request gifts in the form of cash (or gift cards to bookstores, university shops, etc.) or set up a GoFundMe or other crowdfunding campaign to help outsource some of those college costs.

    The Beyond program at Embrace Home Loans is designed with small business owners just like you in mind. Whether you’re trying to pay for college after bankruptcy, have low credit, or just can’t get the loan you need because of your non-W2 status, Beyond is here to help. Contact a loan officer to learn more about the program today.

    Your mortgage options for a smooth journey home.

    Get expert guidance and personalized solutions for a stress-free mortgage experience.