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Division of property depends on the state the divorce is filed in. Tennessee uses the equitable distribution model. This means that if you cannot come to an agreement with your spouse and the court must divide your debts and assets, the standard is a “fair, roughly equal distribution.” Other states follow a community property system where all marital property is evenly shared. Tennessee’s equitable distribution model allows flexibility for different types of debts and assets, like student loans.

As a general rule, a student loan’s owner depends on the timing. If the debt pre-dates the marriage, it is separate property. In the broadest sense, the student is the owner of the loan in most situations—even if the loan was acquired during the marriage.

However, There Are Exceptions To Every Rule:
It is possible for a court to consider a student loan as a marital debt that should be equitably divided. Issues to consider:

  • Did the loan go only toward classes or also toward living expenses?
  • Has the degree earned from the loan benefited both parties, and for how long?
  • What is the earning power of each spouse?

In most cases, student loans belong to the individual student, buteach situation is unique. If one spouse earns significantly more income than the other, the effect of debt payments on the post-divorce budget will influence the decision. Likewise, the court will carefully weigh how the degree itself helped the couple during the marriage. If both parties reaped significant benefits, the related student loan debt could be divided between both parties.

If there is dispute whether student loans are separate property or marital property, a potential solution is to trade assets—where a spouse agrees to own the entire debt in exchange for another concession among the marital estate. There are many options and many ways to divide property, some more complex than others. When ownership is unclear or contested, our office can explain different options and help to find solutions and compromises.

If You Have Questions About Student Loans & Divorce, Please Feel Free To Contact Our Office.
Ryan K McFarland • attorneymcfarland@gmail.com 1 (​931) 516-9009



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