The cost of education has skyrocketed over the past twenty-five years in the United States. Whether attending college, university, and/or graduate school, most individuals obtain federal or private student loans to finance a portion or all of their secondary education. Should a party incur student loan debt prior to entering into a marriage, said debt will most likely be considered a pre-marital liability in a divorce action. Therefore, the student loan debt would not be included in the marital estate subject to equitable division. What happens when one spouse takes on student loan student during the course of the marriage then becomes a party to a divorce?
It is not uncommon for one spouse to further his or her education during the marriage. If the spouse obtaining the education incurs student loan debt to assist with financing the schooling, then said student loan debt could arguably constitute a marital debt in the event of divorce. Accordingly, the post-marital student loan debt may be considered when equitably dividing the marital property of the spouses. The specific facts of each particular case will likely dictate whether or not post-marital student loan debt qualifies as a marital debt.
Due to the recent change in presidential administrations, there has been discussion of President Biden taking action to potentially cancel a portion of federal student loan debt for qualifying individuals. Although no action has taken place to date, any potential cancellation of federal student loan debt could affect the finances of parties to a divorce action.
If you are contemplating divorce and either you or your spouse has student loan debt, it is important that you consult with an experienced family law attorney. For more information, please contact Simpson Legal Group, LLC, at (712)256-9899.