07 Jul Student Loans During Divorce in Florida: What You Need to Know
Student Loans During Divorce in Florida: What You Need to Know
Student loans often represent a significant financial obligation. When couples in Florida divorce, one of the most pressing concerns is how student loans during divorce will be addressed. The answer depends on several factors, including the timing of the loan, the purpose of the debt, and Florida’s laws on equitable distribution.
Understanding Student Loans During Divorce in Florida
Florida is an equitable distribution state, meaning that marital assets and debts are divided fairly, though not necessarily equally, during a divorce (Fla. Stat. §61.075). This principle applies to both assets and liabilities, including student loans during divorce.
Is the Student Loan Marital or Non-Marital?
The first step in analyzing student loans during divorce is determining whether the debt is marital or non-marital:
- Non-marital debt: Incurred before the marriage and generally remains the responsibility of the individual.
- Marital debt: Incurred during the marriage, even if only in one spouse’s name, and typically subject to equitable distribution.
For example, if one spouse took out student loans before getting married, that debt is typically non-marital. However, if the loans were incurred during the marriage, they may be classified as marital. In Florida, courts generally consider student loan debt incurred during the marriage as a marital liability, which is subject to equitable distribution between the parties. However, specific factors and findings may justify an unequal distribution of such debt. Courts must make written findings to support any unequal allocation of student loan debt, and the presumption is that such debt is marital unless evidence demonstrates otherwise. Brutus v. Giles, 360 So. 3d 1223, Tsacrios v. Tsacrios, 282 So. 3d 1013.
Courts do not consider whether one party will benefit from the other party’s education when allocating student loan debt. For example, in Cooley v. Cooley, 253 So. 3d 1223, the court reversed an unequal distribution where the wife was assigned all marital student loan debt, emphasizing that the lack of benefit to the husband from the wife’s education was not a valid factor for consideration. Similarly, in Brutus v. Giles, 360 So. 3d 1223, the court reiterated that student loan debt incurred during the marriage is presumed marital unless specific findings justify unequal distribution.
How Florida Courts Assess Student Loan Debt
When determining how to divide student loans during divorce, courts consider several factors, including:
- Purpose of the loan: If the education primarily benefited the marriage (e.g., improved earning potential that supported the family), the debt may be considered marital.
- When the loan was taken out: Debts incurred during the marriage are more likely to be shared. (Banton v. Parker-Banton, 756 So. 2d 155, the court highlighted the importance of properly categorizing loans as marital or nonmarital based on when they were incurred and their purpose.)
- Other factors influencing the division of student loan debt include the economic circumstances of the parties, the duration of the marriage. (For instance, in Dunkel v. Dunkel, 358 So. 3d 806, the court found that a consolidated student loan for the benefit of the parties’ children was a marital debt and required joint responsibility for repayment.)
Florida law also requires courts to consider the overall equitable distribution scheme, including the contributions of each spouse to the marriage, interruptions to careers or education, and the financial needs of the parties, as outlined in Fla. Stat. § 61.075. These factors ensure that the division of student loan debt aligns with principles of equity and fairness.
Student Loans and Professional Degrees in Divorce
Florida does not treat a professional degree as marital property. You cannot divide the “value” of a law degree or medical license. However, the earning capacity resulting from that degree may influence alimony decisions under Fla. Stat. §61.08.
Student Loans Co-Signed by a Spouse
If one spouse co-signed a student loan, that individual may remain liable for repayment regardless of divorce. Courts generally lack authority to alter third-party contractual obligations between a lender and a borrower or co-signer.
Negotiating Student Loan Division in a Marital Settlement Agreement
Couples can proactively resolve student loans during divorce through a Marital Settlement Agreement (MSA). This is often preferable to leaving the decision to the court. An MSA can specify:
- Who is responsible for specific student loans
- Whether one spouse will reimburse the other
- How to allocate payments going forward
Common Mistakes in Student Loan Division
- Assuming debt follows the borrower: Marital timing matters more than whose name is on the loan.
- Ignoring tax consequences: Forgiven student loan debt may trigger taxable income, depending on federal policy changes.
- Not addressing co-signed loans: These can remain a joint obligation after divorce.
What Florida Courts Look for When Dividing Student Loans
Courts look for evidence showing whether the loan served a marital purpose. Useful evidence includes:
- Loan documents
- Tuition receipts and transcripts
- Evidence of how the degree impacted household income
Miami-Specific Considerations for Student Loan Division
In Miami-Dade County, judges are familiar with high student loan burdens, especially from private law schools, medical schools, and professional programs at institutions like the University of Miami and FIU. Judges often scrutinize whether the education primarily advanced the family’s well-being or was a personal benefit.
FAQs
Are student loans always considered marital debt in Florida?
No. Only loans taken out during the marriage are typically considered marital debt. Pre-marital student loans remain the responsibility of the spouse who incurred them.
Can student loans affect alimony in Florida?
Yes. If one spouse is burdened with significant student loan debt and limited income, it may influence the court’s alimony determination under Fla. Stat. §61.08.
What if my spouse co-signed my student loan?
Even if your spouse co-signed the loan, the court generally cannot relieve them of the obligation to the lender. However, an MSA can provide indemnification or reimbursement terms between spouses.
What happens if my ex-spouse doesn’t pay the student loan assigned to them?
If your ex fails to pay a loan the court assigned to them, creditors may still pursue both parties (if jointly liable). You can return to court for enforcement, including contempt or reimbursement.