Student loans are rapidly becoming a reality for most. Unfortunately, when splitting up comes into the picture, there is no divorcing your debt. Any student loans will need to be addressed during the division of assets and debts in your divorce.
In general, a student loan is the separate responsibility of the party that received the education. The other party may request reimbursement from the party that received the education for payments made toward the education during the marriage. They may request one-half of the total payments made with community funds plus interest, offset by any contributions made to their own education or training.
In determining how to treat the student loan debt, the family court will look at whether both parties have benefited from the education. Because the debt was incurred to enhance one party’s future earning capacity, the other party may have financially benefited through an increased household income. Likewise, the education may allow the party to work and reduce the party’s need for spousal support.
Another factor the court will take into account is the length of payments made during marriage. There is a rebuttable presumption that the community has benefited when community contributions were made to the education more than 10 years before the divorce proceedings began. Conversely, there is a rebuttable presumption that the community has not benefited when community contributions were made to the education less than 10 years before the divorce proceedings began. The other party can rebut the presumption with evidence that the community has or has not benefited.
The division of assets and debts in a divorce can be complicated. You should contact an experienced mediator like Carol Delzer at Family Law Center for assistance in determining an equal division and drafting a family law agreement.