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Divorce and Student Loans: How Debt Is Handled in a Divorce

By Nottage and Ward on September 15, 2023

More than half of students who attend four-year college leave school with student debt, and the total amount of student debt continues to grow. Along with home and auto loans, student loans are among the largest types of debt that most people will take on during their lives.

Americans now owe over $1.75 trillion in student debt. According to Forbes Magazine, students in Illinois with student debt owe an average of $ 37,223.

When a couple gets divorced, all marital property must be divided, including debt. The State of Illinois legally defines marital debt as a martial asset. The distribution of student loan debt that’s acquired while you are married depends on several factors, including income, allocated parent arrangements, and each spouse’s financial obligations.

How Marital Debt Is Divided in Illinois

Marital property includes most types of assets that were obtained after the marriage took place. There are some exceptions to this rule, including gifts and inheritances received by one spouse during the course of the marriage.

Illinois is an asset distribution state. Unlike many other states, courts in Illinois are not obligated to divide the couple’s assets evenly in a 50-50 split. Instead, the assets will be divided fairly based on several factors, including:

• The length of the marriage
• Each spouse’s income and earning potential
• Each spouse’s future needs
• Each spouse’s age and education
• Allocated parent requirements for children
• The financial contributions that each party made during the marriage
• Prenuptial and other agreements
• Current and future tax obligations

 How Illinois Courts Distribute Student Loan Debt

Any student debt that was taken on before the marriage took place is considered non-marital property, and it will not be subject to asset distribution. However, if the debt was refinanced during the marriage, it probably belongs to both spouses, especially if the other spouse cosigns the loan.

There are many considerations that the court may take into account when determining how student loan debt will be distributed during a divorce. In some cases, the judge will rule that one spouse’s pursuit of higher education was an investment in the marriage and rule that both parties should pay for the student loans.

In a situation where one spouse works to support the other through years of professional training, such as law school, medical school, or an MBA program, the spouse who received the additional training may now be earning a substantial income. In these cases, a judge may feel reluctant to force the spouse who did not receive advanced training to pay for their partner’s student loans.

Circumstances that may influence how a court determines the distribution of student loan debt include:

• How other marital debts and assets are divided
• Current differences in income
• When one spouse made sacrifices to help advance the other’s education
• The amount of money that was brought into the marriage due to education that a spouse received

How Your Illinois Divorce Lawyer Can Help

Couples going through a divorce often find ways to settle their disputes amicably. Many couples choose mediation to help overcome their differences.

At Nottage and Ward, LLP, our Chicago debt division lawyers will work to negotiate an equitable arrangement between you and your spouse. Although, we are always prepared to forcefully argue your case before the court if litigation becomes necessary.

Consult a Trusted Chicago Family Law Attorney

If you are thinking about divorce, there are important issues you will want to consider. That’s why it’s a good idea to speak with a knowledgeable Illinois family law attorney as soon as possible.

At Nottage and Ward, LLP, our Chicago attorneys have been helping families and children for over 30 years. We’re ready to answer your questions, and we can help you navigate through all divorce proceedings.

Nottage and Ward, LLP is listed by Martindale-Hubbell in its Bar Register of Pre-eminent Lawyers for outstanding legal service and success.

Call (312) 332-2915 to learn more about your legal options today.