According to the Federal Reserve Bank of New York, in 2013 the outstanding student loan debt in the United States was approaching the $1 Trillion mark. With that crushing amount of student loan debt weighing down on American households, it is no wonder that the division of student loan debt can often be a significant issue in a divorce.
Under Nevada law, debt acquired during the marriage is presumed to be community debt. As such, our judge’s are mandated, absent a compelling reason, to divide these student loans equally between spouses at the time of divorce. Despite this rule, student loans are often viewed by judges as a different animal, and are often awarded solely to the spouse that received the education.
In a recent case, an Ohio court determined that this type of division, where one spouse is saddled with 100% of the student loan debt, is not necessarily equitable. In the Ohio case, the court determined that the idea that the spouse that received the education is the only spouse to maintain that benefit after the divorce, is flawed. The court reasoned that many factors should be considered when determining how student loan debt should be divided, among them: the idea that a marriage is a partnership where each partner is responsible for burdens acquired during the marriage; the benefit the non-educated spouse may get in receiving higher support related to higher income because of the education; and the unequal treatment that spouses who paid for tuition from existing marital funds would receive when compared to spouses in marriages where student loan exist.
While Ohio is not a community property state like Nevada, the same equitable principles apply in our divorces. If the court is not going to divide the student loan debt (again, only those acquired during the marriage) equally, it must give consideration to factors that support a compelling reason for the unequal division.