What Happens To Your Student Loans When You And Your Spouse Divorce?

These days, it is not unusual for people to graduate with $60,000, $100,000, or even $200,000 in student loans. If your partner also has student loans, your debt burden as a couple can be enormous. As you consider divorce, one of the questions that looms over you the most might be what happens to that enormous amount of debt. In fact, some couples even avoid divorcing because they're scared they'll be burdened with astronomical student loan debt when they do! Avoiding divorce due to fear is never wise, so here's a look at what will happen to your student loans should the two of you decide to split.

When did you take out the loans?

What happens to the student loans depends largely on whether or not the court will consider them marital debt. Basically, if you took the loans out before you were married, they won't be considered marital debt. If you took them out after you were married, they'll be considered marital debt. Generally, when you divorce, you'll be responsible for any non-marital debt that is in your name. All marital debts, regardless of whose name they are legally taken out under, will be split between the two of you. 

So if you graduated with $20,000 in student loan debt and got married a year later, that $20,000 is your responsibility after you divorce. If you went back to school after you were married and took out $10,000 in loans, that debt will be split between you and your spouse after you divorce.

How was the loan money used?

If the student loans were a marital debt, the court will also consider how the money was used. If it was used only to pay tuition to the school, then the court may decide the person who took out the loans is more responsible -- because they benefited from the money long-term due to the education it provided. If the money was instead spent on living expenses, then both spouses benefited -- so the court is more likely to split the debt.

How do your earning abilities compare?

Finally, the court will compare your earning potentials. If you do not have a good job because you set aside your career goals while your spouse went back to school, you may be assigned less of the student loans. Your spouse may be assigned more of the loans because they are able to earn more, thanks to the education the loans allowed them to obtain.

As you can see, determining who pays student loans after a divorce is complex. Speak to a divorce lawyer to learn more about what will happen in your own unique situation.