Who Pays the Student Loans in a Divorce?
As the cost of higher education continues to rise, more people depend on student loans to complete their college and graduate-level education. Consequently, more married couples are entering into marriage with student loan debt or taking out student loans during the marriage. For those separating or divorcing, a common question is: how does marriage affect repayment of my own or my significant other’s student loans?
California is a community property state, and the general presumption is that debt incurred during the marriage is considered community property, and debt incurred before marriage or after the date of separation is considered separate property. Further, according to Family Code Section 2627, the spouse who incurred the student loans must be assigned the payment of said loans. However, if the community substantially benefitted from the education loan, the loan can be divided between the parties, and both would be responsible for repayment.
For the Court to determine the community has substantially benefitted from the student loans, there must be evidence such as a higher standard of living, a substantial increase of assets, etc. as a result of the spouse’s education paid by community property. The community is presumed not to have substantially benefited from the education if the loans were taken out less than 10 years from the beginning of the divorce or legal separation.
In the event the community paid for part or all of the spouse’s education and substantially benefited from said education, the community would be entitled to reimbursements. Reimbursable expenses are expenses directly related to the spouse’s education, including tuition, books, fees, and supplies. However, this does not include ordinary living expenses such as housing, food, and medical expenses.
If you have questions about student loans and divorce or other property division issues in family law, having an experienced family law attorney by your side can help protect your rights and property. Contact The Reape-Rickett Law Firm at (888) 864-6166 to meet with a skilled attorney.
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Santa Clarita Magazine has set a high standard for excellence in advertising for over 29 years. A family owned and operated business, Santa Clarita Magazine has grown with the Santa Clarita Valley since 1990 and become the #1 place to advertise locally.