Student loan debt obligations in a North Carolina divorce

The cost of higher education is steeper than it’s ever been, and most people don’t have the funds to pay for their tuition out of pocket. Consequently, the number of Americans with student loan debt is at an all-time high: around 45 million people.

In addition, the average American will experience their first divorce at age 30 – making it likely that they will carry significant student loan debt at the time of the marriage dissolution. What does this mean for the financial obligations of the divorcing spouse?

North Carolina views on student loan debt

North Carolina is an equitable distribution state – meaning that the court will determine how to fairly split assets (including debt) between you and your spouse in a divorce. The judge will decide what debt is “marital debt” – and should therefore be split by both parties.

In general, marital debt is considered debt that was accrued during the marriage. However, this is not the only factor that a judge can use to determine marital debt.

In 2015, the Court of Appeals of North Carolina made a landmark decision regarding student loan debt responsibilities in a divorce. The court ruled that the benefits one spouse enjoys from the other’s degree or higher earnings can make a case for marital debt.

In other words, if you accrued student loan debt before you were married, and your spouse enjoyed the benefits of your increased earning capacity as a result of your higher education, then they could share responsibility for your student loans.

The division of student loan debt – and many other assets in an equitable divorce state – are based on a judge’s determination of what is “fair.” Because this is so subjective, it is especially important to have an experienced family law attorney who can make a strong case on your behalf.