People who are divorcing may wonder how it will affect their student loan debt. If they went into the marriage with the debt, it will probably be considered individual property and the person who took it out will be responsible for it. However, if the student loan debt was acquired after marriage, what happens to it is less straightforward. In Connecticut, an equitable distribution state, a court will look at several factors to decide whether student loan debt is shared property and how it will be divided.
A debt is more likely to be considered the sole responsibility of the student who took it out if the student used it all on tuition and other school-related expenses than if the couple used the loan for living expenses. A court may be less likely to hold a spouse responsible for the debt if the spouse was very supportive while the student was attending school. The earning power of both spouses may also be a factor in determining responsibility, particularly if a lower-earning spouse put a career on hold to support the spouse in school.
Some situations with debt may be very straightforward. For example, co-signing a loan for a spouse means both are responsible for the debt even after getting a divorce.
People who are negotiating asset and debt division might want to make sure they have provisions in place to deal with an ex-spouse who does not follow the divorce decree. If a debt is still in just one person’s name, that is the person creditors will pursue regardless of what the agreement says.