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How Divorce Affects Your Student Loan Debt

Cody Cobb

Going through a divorce is emotionally draining. And on top of that, there's the added stress of dividing all of your assets and debt and determining who gets what. When it comes to your student loan debt, you might wonder if you'll have to pay it all off yourself or if your spouse will ultimately be held responsible for some of it too.

All debt acquired before marriage remains separate property. So if you accumulate $100,000 in student loans before marriage, for example, that debt remains all yours even after you get divorced.

[Read: 4 Tips for Families Navigating College Financial Aid Amid Divorce.]

But if your debt was acquired after you got married, things get a bit more complicated. Such debt is considered marital debt. Every state looks at marital debt as either community property or equitable distribution.

In community property states, both marital assets and debt are divided equally between both parties. Community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. So if you live in any of those nine states, you and your spouse will have to evenly split all student loan debt that was acquired after marriage. California is an exception; even though it's a community property state, student loans are considered separate property.

Every other state follows the equitable distribution model. With equitable distribution, the courts review on a case-by-case basis and then decide the fairest way to divide the debt.

Here are a few things that courts will consider when determining how student loan debt is divided.

How was the money used? If all of your student loans were put toward your education, such as for tuition, fees and education materials, then the debt is more likely to be considered all your responsibility.

[Read: What Expenses You Should Cover With Student Loans.]

However, if the student loans were also used to cover shared living expenses with your spouse, then it's more likely to be considered shared debt, and your spouse might be held responsible for some of the debt.

What role did your spouse play? If your spouse played a supporting role in your education, like taking care of the house or driving you to campus, for example, then many courts might believe that he or she has already paid dues and therefore isn't liable for any of the debt.

Do you and your spouse have equal earning power? Another thing to consider is how much money both you and your spouse earn. If your spouse is making very little income, then the courts are less likely to hold him or her responsible for much of the debt. This is especially the case if a spouse put a career on hold to support you in your endeavors.

Did you receive a degree? In some states, a degree earned during a marriage is considered marital property. If this is the case, then any debt incurred while earning your degree is considered marital debt, which means it's the responsibility of both you and your spouse.

[Read: 3 Important College Funding Questions to Answer During a Divorce.]

Did your spouse co-sign a student loan? Most private student loans require co-signers. If your spouse co-signed a private student loan for you during your marriage, then he or she is legally responsible for the debt as well, even after divorce.

Dividing student loan debt can be complicated, so the best thing to do is consult with a lawyer before you start the divorce process. That way, you know exactly what to expect.

In addition, talk to a student loan counselor, contact your student loan servicer or review the U.S. Department of Education's StudentLoans.gov site for answers. You should be able to review existing and new repayment options that might be available to you to tackle the debt. For example, with the loss of a second income, you may be eligible for a lower student loan repayment plan. It's worth the research to find out what you can expect for your financial future.

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