How student loan debt is divided when you divorce

Many people in California know that the state uses a community property approach to dividing assets and debts. In most cases, debts incurred and assets obtained during the marriage are split equally when couples divorce. Some divorcing partners wonder about special types of debt like student loans and if the same rules apply.

Loans taken out before the marriage

If one or both spouses have student loans that were signed before the marriage became official, they are responsible for their own debts. For example, if a spouse took out $30,000 in student loans the year before getting married, that individual would be responsible for repaying it if the couple decides to divorce.

Loans taken out during the marriage

In many cases, the spouse who takes out the student loans during a marriage is responsible for repaying them after the divorce. If the person develops skills that lead to better career opportunities, there can be lifelong financial benefits that the other spouse may no longer enjoy. Courts often consider it unfair to expect a less-fortunate spouse to pay for the other’s improved earning ability. However, there are some exceptions. Under Section 2641 of the California Family Code, there may be exclusions to the rule if one or both parties substantially benefitted from the employment or education of the spouse with the student loans. Spousal support factors and other factors are considered in each case when it comes to dividing student loan debt.

Because finances and other factors vary in each case, there is no universal answer about how student loan debt will be handled. However, California’s laws provide clear guidance for legal representatives to assist people in determining when special debts like student loans may or may not be divided.