Whose Student Loans Are Whose
Student loans incurred before the marriage are generally the separate debt of the spouse who took them. Student loans incurred during the marriage are more complex: in community property states, they may be community debt; in equitable distribution states, courts consider who benefited from the education and each party's earning capacity.
The trend in most courts is to assign student loan debt to the spouse who received the education, on the theory that they also received the enhanced earning capacity. But this isn't universal -- some courts split education debt if both spouses benefited from the increased household income during the marriage.
Federal vs. Private Student Loans
Federal student loans are always in one person's name and remain that person's responsibility. They cannot be transferred or divided in divorce. Even PLUS loans taken by a parent are that parent's sole obligation. Private student loans may have cosigners, creating joint liability similar to other cosigned debts. The cosigner remains liable after divorce regardless of the decree.
Student loan default can complicate divorce settlements. If one spouse's loans are in default, the resulting garnishment, tax offset, or credit damage affects the household's finances during divorce negotiations.
Bankruptcy and Student Loans in Divorce
Student loans are generally not dischargeable in bankruptcy, making them particularly problematic in divorce. If one spouse files bankruptcy after divorce, the student loans survive. If a cosigned private loan was assigned to one spouse in the divorce, the non-assigned cosigner remains liable even if the assigned spouse files bankruptcy.
The only avenue for student loan discharge in bankruptcy is the undue hardship test (Brunner test in most circuits). This is a high bar but not impossible. If student loan debt is the primary financial obstacle in your divorce, explore all options: income-driven repayment, forgiveness programs, and in extreme cases, the hardship discharge.
Frequently Asked Questions
Are student loans always assigned to the person who got the education?
Usually but not always. Courts consider the totality of circumstances: whether the non-student spouse sacrificed career opportunities to support the student, whether both spouses benefited from the education, and each party's financial situation. The student spouse almost always gets the loans, but some courts order the other spouse to contribute.
Can student loan payments count toward alimony or support?
Not directly. Student loan payments are a separate obligation from spousal support. However, courts may consider student loan obligations when calculating the support amount -- a spouse with large student loan payments may have less income available for support.
What happens if we both have student loans?
Each spouse keeps their own federal student loan debt. For private loans, liability follows the loan agreement. Courts try to achieve an equitable overall division, so one spouse's larger student loan burden may be offset by receiving more marital assets or less of the marital debt.
Check your bankruptcy discharge eligibility with our free screening tool.
Free Discharge Screener