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Student loan debt: when is it marital property?

On Behalf of | Apr 10, 2020 | Divorce

Ohio is an equitable property state, which means that marital assets and debt are divided in a way that a judge deems “fair” when a married couple gets a divorce. “Fair” does not always mean 50-50, meaning that it is not a given how assets could be divided by a judge if the parties are unable to reach an agreement on their own. However, generally speaking, if a spouse incurs debt before the couple is married, then the other spouse will not be held responsible; this includes student debt.

One exception to the general rule regarding student loans would be if a couple consolidated their student debt into one loan with both of their names on it. This will not come up for newer couples who hold federal student loans, since married persons have not been allowed to merge these loans since 2006.

Though federal student loans do not typically require a co-signer, private student loans often will, and there are many married people who have co-signed a spouse’s student loan. If that is the case, then both spouses will be held responsible for the debt if they get a divorce. However, if a married person takes out a student loan on his or her own, without a co-signer, then the other spouse will not bear the burden of taking on a portion of the debt after a split.

Student debt is just one consideration in a divorce. Other types of debt that could be harder to divide include credit card debt incurred during the marriage, as well as home mortgages. Ohio residents who are contemplating divorce should speak with a local family law attorney to help determine their liabilities and assets and to see if a negotiated settlement is possible.