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How student loans are divided in a divorce

On Behalf of | Oct 14, 2021 | Divorce, Property Division

One of the most common sources of debt for people in New Jersey, and elsewhere around the country, is student loans. If you’re going through a divorce, you and your spouse both may have student loan debt. During the property division process, you will have to decide how your student loan debt is going to be divided.

Dividing student loan debt can be complicated

Since New Jersey is an equitable distribution state, dividing marital property in a divorce can be complicated. Marital assets and debts are divided equitably, not equally. That means that several factors will be considered when dividing student loan debt, including:

  • Who acquired the debt
  • Who benefitted from the debt
  • The earning potential of each spouse

If you acquired student loan debt that was used to pay for living expenses while you were married, your spouse may have benefitted from the debt. Your spouse may also have more of an obligation to help you repay your student loan debt if his or her earning potential is higher than yours.

On the other hand, student loan debt that was used solely for your educational expenses may have only benefitted you. If your earning potential is also higher than your spouse’s, the debt could become your responsibility after a divorce. A divorcing couple that both went to college during their marriage and have similar student loan debts may simply make their own payments after divorcing.

Student loan debt acquired before marriage

In most cases, debts that you acquired before you were married will not be considered marital property. If you completed your degree before getting married, repaying your student loans may be your obligation alone. You may want to talk to an attorney about dividing student loan debts from a degree that you started before marriage but completed afterward.