As many people know from personal experience, the cost of a four-year education has risen over time. This has resulted in an increase in student loan debt.
Florida Law requires that the parties identify, value, and then divide all of their marital assets and liabilities. A marital asset or liability is one that has been incurred during the marriage.
One could identify student loan debt in various ways. One common sense way of looking at it is to suggest that the debt pertains to the degree—and a college or vocational school degree or certificate is an asset of sorts. Therefore, whoever keeps the education at the time of divorce should retain the debt that goes with it. This is what is commonly done with automobiles. If you get the car, you get the debt that goes with it.
However, this is not the way Florida law handles student loan debt. The law does not recognize a post high school education as an asset that is to be considered at the time of divorce. It does, however, recognize the student loan debt incurred during the marriage as a marital liability to be allocated between the parties.
What has ensued as a result of this aspect of Florida law is what may be considered an injustice by some. A spouse who is divorcing and will not benefit from the other party’s education obtained during the marriage is held responsible for a portion of the educational debt that was incurred during the marriage.
The problem is that the law does not place a value on the education received as an asset to be allocated during the marriage. Perhaps to value the education would cause additional problems. Experts such as economists would be required to testify as to the value of the education. One court considered the problem as follows:
In sum, while a variety of approaches have been utilized to find that a degree is property or to deny such a characterization, the majority view appears to be that an educational degree is not an asset subject to distribution because its value, as measured by future earning capacity, is too speculative to calculate.
The court went on to hold:
After careful consideration of the foregoing arguments, we conclude in accordance with the majority view, that an educational degree is not property subject to distribution as lump sum alimony because its value, which must be measured by future earning capacity, is too speculative to calculate. Hughes v. Hughes, 438 So 2d 146, (Fla 3rd DCA 1983).
There you have it: student loan debt incurred during the marriage is a marital liability that is to be allocated between the parties.