How are Student Loans Divided in a Florida Divorce?

Petition for divorce

If you are engaged in a divorce and you or your spouse has a significant amount of outstanding student loans, these may be a crucial part of your divorce negotiations. Student loans provide a substantial amount of education that provides future dividends; however, the loans also provide a significant amount of debt for many years. Therefore, it is important to understand how these specific debts are classified, distributed, and properly assess their value. Discuss the student loans obtained by you or your spouse, with your attorney to evaluate your options regarding these debts.

In every divorce case, the parties must engage in the process of equitable distribution. This process includes classifying all assets and liabilities possessed by either spouse as marital or non marital and subsequently engaging in a division of the marital property in a fair manner considering the circumstances. Therefore, the first step in determining the division of a student loan debt is defining its classification.  

Generally, marital property is any asset or liability obtained during the course of the marriage, while a non marital asset or liability is one obtained before the marriage. Therefore, the easiest way to classify a student loan debt is to look at the date the loan was obtained. Further, you will want to decipher the benefits the loan provided to each spouse.

If you or your spouse obtained a loan to attend college during the duration of your marriage, both parties are responsible for the outstanding debt owed on this loan. Although it may seem unreasonable to require the spouse who did not obtain the education to be responsible for a portion of the loan, the court has stated that is it unreasonable to believe that the funds from the loan were used solely for the education. Rather, some of the funds are used to replace the income of the spouse who is seeking the education and pay the necessary living expenses of the couple. Further, by obtaining a loan, the couple did not have to expend marital funds to pay for the education. Therefore, even though the spouse did not receive the educational benefit, they did receive the monetary benefit of the loan and are therefore responsible for a portion of it.

However, even if the loan was taken out prior to the marriage and is considered to be a non-marital debt only attributable to one spouse, this amount of debt may still be accounted for in your equitable distribution process. In addition to immediate benefits the loan provides, it may be prudent to assess the long-term benefits of the student loan as well. For instance, when a student loan is taken out it is most likely for the overall purpose of obtaining an education to raise your employability and income level. Therefore, with a higher earning level or anticipated higher earning level, the court may take this into account when determining the division of this debt and the ability of repayment. Further, this increase in income may also come into the award of alimony or child support. However, if the repayment of this debt causes a significant decrease in the available funds to the party the court will need to reevaluate the distribution of certain awards or other debts and assets.

These loans can be distributed equally, unequally, or be the burden of one spouse. However, when determining which distribution method is best, ensure you present the court with evidence of the time period of when the loan was taken out, the immediate benefits provided from the loan, and the long term benefits provided to the educated spouse.

Student loan debt can be a crippling factor in the lives of many individuals, and therefore can also be a highly litigious topic in a divorce proceeding. Before determining how you and your spouse will distribute these debts, consult a lawyer to ensure you understand the classification and value of these debts and determine an equitable distribution of these student loans in your specific case.

Speaking to an attorney at our Pensacola office is free of charge, and we accept calls 24 hours a day, 7 days a week. Call us at (800) 822-5170 or complete an online contact form to get in touch with a member of our team today.

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