Obtaining a higher education can often come with a steep cost and many people take out student loans to cover these expenses. Dealing with this debt can be a major concern when a couple chooses to part ways and terminate their marriage. Importantly, Ohio applies the equitable distribution doctrine when it comes to dividing marital property, assets, and debts between divorcing spouses. This rule also applies to dividing student loans in divorce.
Student Loan Debt Incurred Prior to the Marriage
In many cases, people get married with student loan debt already having been incurred. Under Ohio law, student loans that were taken out before the date of marriage would be considered separate debt. This means that the person who took out the debt would be solely responsible for repaying it.
Some people might take a few years off between high school and college, or they might decide to pursue a higher education when they are older. Dividing student loans in divorce can become more complicated if the loans were taken out after the spouses were already married.
Generally, separate debts are not subject to division in divorce, unless they were “commingled,” or somehow incorporated into marital funds. Generally speaking, the analysis for separate versus marital property also applies to separate versus marital debts.
Student Loan Debt Incurred After the Marriage
Debt acquired during a marriage is typically considered marital debt and is shared by both parties. In such cases, student loans in divorce and dissolution are divided in accordance with Ohio’s equitable distribution doctrine. But it’s important to understand that equitable does not necessarily mean an equal split of the debt — a court considers a number of factors in determining how student loan debt should be allocated between the parties, if at all.
For instance, if the student loan debt was taken out for directly-related educational costs, such as tuition and fees, books, and other educational materials, it is more likely that the debt would be considered that spouse’s separate responsibility. However, if the student loans were used to pay the couple’s living expenses, it is more likely that they would be considered a marital liability.
In addition to how the student loan money was spent, other factors a court might evaluate include the following:
- The length of the marriage
- Who benefitted from the student loan debt
- Which spouse’s name is on the student loan
- Whether the other spouse was a co-signer on the loan
- Whether the spouse who borrowed the money earned a degree
- Each party’s income and earning potential
- How other property and debts will be divided
Significantly, the divorce or dissolution decree will not change the name that appears on the loan or the person who is responsible for paying it back. If the debt is in your name, it will ultimately remain your responsibility to ensure it is paid. In the event the court assigns a portion of the loan repayments to your spouse, you will need to ensure they keep up with making their payments. In some cases, it may be best to maintain responsibility for the student loan debt but request more property or assets to make up for that greater debt.
Student Loan Debt Incurred for Children’s Education
For couples who part ways once their children are college-aged, student loans that they took out for their children may need to be addressed during the divorce proceedings. However, only one spouse can sign the promissory note on a Parent PLUS loan — and they are ultimately the person responsible to ensure the loan is repaid.
In cases where a Parent PLUS loan is assigned to one parent, the parties might consider this when dividing other marital property. For example, while one spouse might take responsibility for their child’s student loan payment, the other might take over a vehicle payment or various other bills. Mediation can be useful to assist the spouses with finding creative solutions to dividing children’s student loans in divorce.
The Effect of a Prenuptial or Postnuptial Agreement
If you and your spouse entered into a prenuptial agreement before the marriage — or a postnuptial agreement during the marriage — those terms should control how to divide student loans in divorce. A prenup or postnup can dictate who is responsible for the debt and whether it should be excluded from marital property. In addition, either of these documents can specify how the debt should be paid during the marriage.
Contact an Experienced Ohio Divorce Attorney
If you are considering parting ways with your spouse, it’s essential to have a knowledgeable divorce attorney who can help you navigate the legal process and obtain the best possible outcome. Located in Green, Ohio – halfway between the Akron (Summit County) and Canton (Stark County) courthouses – Melissa Graham-Hurd & Associates, LLC provides compassionate counsel to clients for a wide array of matrimonial matters, including dividing debt and student loans in divorce and dissolution. Contact Melissa Graham-Hurd and Associates to schedule a consultation to learn how we can help.
