Student Loan Debt & Divorce in California

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Updated on October 2, 2022

If you are pursuing a divorce or legal separation in California, you may be wondering what will happen to your or your spouse’s student loan debt. While California is a community property state, the way the state handles student loan debt in a divorce is unique.

Read on to learn how to navigate these student loan laws while preparing for divorce.

Who is responsible for loan debt in a California divorce?

As a general rule, loans that have been taken out prior to marriage are the responsibility of the individual. For example, if you take out student loans before getting married,  a judge in California will most likely consider the loans your separate debt and hold you solely responsible for repaying.

Loans taken out during a marriage are treated differently. While equitable distribution states only hold borrowers and cosigners responsible for debts acquired during marriage, in the community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), this debt is seen as marital property or community debt. This means that in a divorce, both spouses would be responsible for student loans taken out during the marriage.

Learn more: Is Student Loan Debt Community Property?

Are student loans considered community property in California?

In most cases, California does not consider student loan debt community property. While California is a community property state, California law typically does not hold one spouse responsible for the other spouse’s student debt. If the marriage lasts less than ten years and the non-borrowing spouse is not listed on the loan, then they will likely not be required to pay off the debt.

There are some exceptions to this rule — particularly if a court determines that both spouses benefited from the student loans. For example, if the education received by one spouse led to gainful employment and increased family income, the court may argue that the non-student spouse should pay off a portion of the student debt.

The courts may consider the same factors when determining alimony or spousal support.

Related: $10k Student Loan Forgiveness

Can I be reimbursed if I paid off some or all of my ex-spouse’s student loans during the marriage?

Whether or not the non-student spouse is entitled to repayment will usually be determined by the courts. They will consider who benefited from the education paid for by student loans. If both spouses (i.e. the community) benefited from the student spouse’s education, it may be harder to get reimbursement. .

In most cases, California courts presume that loans taken out ten or more years before legal separation benefited the community in some way. Loans taken out less than ten years before legal separation are not typically seen as having been beneficial to the community, however this presumption can be overturned with evidence to the contrary.

In a case where a non-student spouse is deemed eligible for student loan debt reimbursement, they can receive repayment for any expenses related to the spouse’s education such as tuition and books.

Related: Student Loan Forgiveness Income Limit

How can I protect myself (or my spouse) from unexpected debt?

A prenuptial agreement is a good way to sort out financial responsibilities with your future spouse before the marriage. A postnuptial agreement serves the same purpose if you have already gotten married.

Consider speaking with a student loan lawyer or family law attorney about a prenup or postnup. Nuptial agreements help both parties plan property division in the case of divorce, and protect from unexpected marital debt.

Learn more: Student Loans and Prenups

Bottom Line

Whether you’re engaged to be married or preparing for a divorce, familiarizing yourself with the laws should be your first step. If you haven’t gotten married yet, speak with a family law attorney about whether or not a prenup might be right for you. A divorce lawyer or a student loan lawyer can also help you navigate these hurdles.

California’s unique divorce and student loan laws may seem complicated, but a couple can easily navigate them with the proper knowledge and preparation.

UP NEXT: How to Apply for Student Loan Forgiveness

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