Dividing Debts During Divorce: Student Loans

When going through a divorce, one thing parties are tasked with is dividing the marital estate.  This involves dividing marital assets, and allocating the responsibility of marital debts as well.  Debt that is incurred during the marriage is presumed marital.


But what if the debt is for student loans incurred by only one party during the marriage?  At first blush, it may not seem fair to require the spouse working during the marriage to be responsible for the student’s loans, or even be responsible for a portion of them.  At the same time, the student may not have income, or may have pursued his or her degree relying on the working spouse’s representation that he or she would help pay the loans.

Illinois courts assess several factors when equitably dividing the marital estate, including debts.  These factors are set forth in Section 503 of the Illinois Marriage and Dissolution of Marriage Act.  Each assessment is very fact specific depending on the circumstances of the case.  Factors the court will consider include:


  1. The duration of the marriage,
  2. The contribution of a spouse as a homemaker to the family unit,
  3. The value of the assets assigned to each spouse,
  4. The relevant economic circumstances of each spouse,
  5. The age, health, occupation, skills, employability, and needs of each spouse,
  6. The opportunity of each spouse to earn income or acquire assets in the future.


This list includes just some factors the court will assess in dividing assets and liabilities.  Additionally, it is important to note that an “equitable” division does not necessarily require mathematical equality.  Illinois courts have varied in their approaches and the ultimate outcome of who is responsible in allocating the responsibility of student loan debt.


For instance, in Marriage of Thornley, the court found that Husband should be solely responsible for the payment of his student loan debt.  In this case, Husband attended chiropractic school during the parties’ marriage while Wife worked and supported the family.  Wife’s income constituted the majority of the deposits into the parties’ joint accounts, from which some of Husband’s school expenses were paid.  They had some assets, including bank accounts and a brokerage account, and they had various credit card debts in addition to Husband’s student loan debt.


The trial court awarded Wife the brokerage account and other personal property, and all bank accounts in her name.  Wife’s assets totaled approximately $30,000.  The trial court also required her to pay all financial obligations in her name.


Husband was awarded a vehicle and bank accounts in his name, for a total value of approximately $5,000.  The trial court required husband to pay for all debts in his name, including his student loan of over $140,000.


The appellate court affirmed the distribution of assets and liabilities.  The court found that a significant amount of the 503 factors favored an unequal distribution in favor of the Wife.  It noted that Husband relied on Wife for support while attending school, Wife paid some of his school expenses directly, and that Husband had a significantly greater earning potential upon graduating chiropractic school.


In addition to using the factors in 503 to allocate student loan debt, Illinois courts have also used the maintenance factors set forth in Section 504, and included student loan monthly repayment estimates into maintenance.


In Marriage of Logsdon, the court ordered Husband to pay Wife maintenance, which was calculated based on his gross income and Wife’s estimated monthly loan payment.  In this case, Wife applied for graduate loans during the marriage and intended to borrow money only for tuition and books.  With some convincing from her Husband, Wife accepted additional loans for living expenses, which were used to pay marital bills and some of Husband’s premarital liabilities.


The trial court applied the 503 factors and allocated approximately 72% of the student loan debt to Husband, and approximately 28% to wife.  In doing so, it reasoned that Husband earned more than twice as Wife.  The court noted that Wife’s monthly loan payment was $1,041 per month, and to ensure that Husband paid his share of the loans, the court ordered him to pay his percentage of the loan as maintenance to Wife at a rate of $755 each month.


As you can see, the allocation of marital debts depends heavily on the surrounding circumstances of the case.  No one fact is determinative of the court’s decision.  If you have any questions about student loan responsibility during a divorce, please contact us.

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