Student Loans: Who Pays in A Divorce?

Student Loans: Who’s paying?

In determining whether student loans are marital debt, South Carolina family courts are required to consider a number of issues.

Was the student loan obtained prior to the marriage?  Some people incorrectly believe that once they marry that each person’s debt becomes the joint responsibility of both parties.  In many households, a husband and wife’s joint income will be used to pay off debts, but this does not convert the debt into the joint legal responsibility of both parties.  Generally, student loan debt that exists before the marriage remains the obligation of that person if the parties divorce.

The family court must also consider student loans that are incurred during the marriage.  Debts incurred during the marriage are generally presumed to be the responsibility of both parties; however, this presumption is rebuttable.  If one spouse claims that the student loans were not used for the benefit of both parties, then the debt may be considered solely the responsibility of the other spouse.  However, the family court may consider how the loan money was used before determining who should be responsible for the debt.    The court may consider if the loan was used for school related expenses (tuition and books) or the loan was used to pay for housing and living expenses.  If the loan was used for school related expenses, then it will most likely be the responsibility of the spouse that received the education.  If the loan was used to support the family and pay living expenses, then it will most likely be the responsibility of both spouses.

It is important to note that South Carolina family court judges have the ability to consider a number of factors in apportioning marital debt and have broad discretion in determining responsibility for debt.  In some cases, the person that took out the loan may not be required to pay for the debt in divorce.  For instance, if one spouse makes considerably more money than the spouse that took out the student loan, then the court may require the spouse that makes more money to pay.