Student Loans and Divorce: What Happens to the Debt?

If you are in the process of getting a divorce, you know how emotionally and financially taxing the process can be. Doing things like dividing up assets and debts, determining custody, and figuring out how to do it all without losing your cool can be incredibly stressful.

If either you or your spouse has student loan debt, it can be even more complex, particularly if that debt was incurred after the marriage.

Student Loans in Divorce

During a divorce, assets and liabilities are split either equitably (according to what is fair, which may not be 50-50) or equally (arbitrarily 50-50). The split depends on whether your state is a community property state, meaning you can expect a 50-50 split, or an equitable distribution state which was the other scenario mentioned earlier.

But while knowing the basic laws of your state is helpful, the real question boils down to when student loan debt was incurred: either pre- or post-marriage.​

Pre-Marital Student Debt

Student loan debt does not magically become shared debt or community property once a couple is married. Student loan debt “stays” with the individual who took out the loans if it was incurred before the marriage.

For example, if you took out student loans for dental school before you were married, then don’t expect to have your ex-spouse footing half of the bill. He or she will not be responsible for any debt incurred pre-marriage. The only exception is if you had a prenuptial agreement that specified the student loan debt would become a marital debt.

Post-Marital Student Debt

If you took on student loan debt after you were married, then the division of debt becomes more complicated.

In the example above, if you started dental school after you were married and took out student loans, then it would technically be a marital debt. The way it is divided would depend on the laws of your state of residence. If you live in a community property state, the debt may be divided 50-50. Additionally, the value of the degree may also be considered a marital asset and subject to division.

If you live in an equitable distribution state, the court will consider a number of factors in deciding how to distribute the debt. This is also where professional help or mediation during your divorce may come in handy.

Perhaps your spouse supported you financially, took over all household duties, or delayed his or her own education in order to help you through dental school. These are a few examples of something that could offset the distribution of student loan debt, and this offset by itself could vary considerably.

If some of the borrowed money was used for living expenses, it could be attributed to the spouse who did not obtain the degree. Or, if one spouse doesn’t have significant earning power and cannot realistically pay the debt, then this could sway the equitable distribution to the spouse with greater earning power.