A college education can increase earning potential and access to professional opportunities. However, students must make a substantial investment in their education before reaping the rewards of the degree.
Adults with student loans typically carry an average of more than $39,000 in debt when they graduate. Those financial obligations can put intense pressure on a household budget and may ultimately contribute to disputes between spouses during a marriage and during divorce negotiations. Understanding what happens to student loans during a divorce can help people pursue appropriate solutions accordingly.
Not all loans are marital debts
Numerous factors influence whether or not the courts may include student loans in the pool of marital property and financial obligations. The timing of taking on the debt is a top consideration. Generally speaking, student loans from before the marriage are not part of the marital estate and are therefore not part of the equitable property division process.
Student loans taken out during the marriage are less of a black-and-white issue. Generally speaking, if the other spouse co-signed for the student loan, then the debt is likely marital and may influence the overall property division process.
If the spouse returning to school used their student loans to cover not just tuition but also household expenses, then the student loans may be part of the marital estate. Additionally, the courts may consider the benefit to the marriage derived from the student’s education.
Reviewing relevant records with a skilled legal team can help people determine if student loans may complicate the property division process in an upcoming divorce. Legal guidance is often necessary when handling complex financial issues, such as the allocation of marital debts.