Students have been racking up loan debt at an exponential pace over the past decade or so. In the year 2011, the total student loan debt balance for those under the age of 30 reached past $300 billion. It took one more year for those in the age range 30 to 39 to reach above that $300 billion threshold, but that age group hit in 2012 and the under 30 stayed above the line that same year.
A lot of couples wait to get married until both have graduated, after they have incurred the debt mentioned above. When they say “I do” to one another, they often repeat those words with the idea that “what’s mine is yours” — or is at least 50 percent yours in Texas. But is this true where those massive student loan debts are concerned?
Student debts aren’t backed by something that can be taken away during divorce or in the case of default. They are unique in that the individual who went to school gets to keep the education no matter what.
Generally, student loan debts incurred prior to marriage belong to the spouse that took them out. There are some exceptions to the rule that a spouse takes their pre-marital student loan debt with them, like a couple that has drafted a prenuptial agreement clearly stating otherwise.
Student loan debt that is borrowed during the marriage isn’t necessarily treated the same way, and definitely depends on the jurisdiction, and, again, whether a prenuptial agreement controls. Texas is a community property state that assumes assets and liabilities acquired during the marriage belong to each spouse equally, 50/50.
Property division, like any other divorce issue, a definitive answer can really only be made based on the specific circumstances — and with the assistance of a Forth Worth divorce attorney.
Most student loan debts don’t have an early payoff penalty, so some couples may work hard to get some of their debts off the books. What if both spouses entered the marriage with debt? Could divorce laws sway your decisions over which debts to pay off first?
Source: The Wall Street Journal, “Who Is Responsible for the Student Loans After Divorce?” Charlie Wells, April 13, 2014