Going through a divorce can be complicated and expensive. The average cost ranges between $12,500 and $19,200, depending on whether there are children involved, according to Lawyers.com.
But according to our debt and divorce survey, student loan borrowers tend to have it worse than people without student loans. Here’s what we found.
Key findings
- Student loan borrowers take on more debt in a divorce. Fifty-eight percent of divorcees with student loans took on debt to help pay for attorney fees and other related costs during their divorce proceedings. Compare that with 48% percent of all divorcees who borrowed money to pay for a divorce.
- Couples with student loan debt are more likely to delay divorce because of cost. More than a third of respondents with student loans (35%) delayed their divorce because they couldn’t afford it, compared with 24% of couples without student debt.
- Student loan debt is a contributing factor in some divorces. Thirteen percent of respondents who had student loan debt going into their marriage claim that it eventually led to the end of their marriage.
- Divorce has caused the majority of divorcees to change their money habits. Almost 7 in 10 divorcees have changed how they manage their money after their divorce. This holds true for people with and without student loans.
The costs associated with divorce
The cost of a divorce can vary depending on how you handle it and what’s involved. For example, mediation can be cheaper than a litigated divorce where one or both sides contest the terms of the annulment. Common costs associated with divorce include:
- Lawyer fees
- Document fees
- Appraisal fees
- Accountant fees
- Parenting classes
- Custody assessment
- Court fees
Respondents to our survey spent an average of $18,652 on their divorce proceedings. Interestingly, student loan borrowers spent over $2,000 more than people without student loans on their divorce.
Besides paying these costs, you may be on the hook for some of your ex-spouse’s student loan debt, which could make your divorce even more expensive. Specifically, this is the case if you live in a community property state, which includes Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.
“If a person applies for that debt while they’re married, it’s considered community property,” said Taetrece Harrison, a New Orleans-based family law attorney at Harrison Law Group. “So, half the debt is yours, and half the debt belongs to the spouse. It doesn’t matter if the loan only has your name on it.”
If you get married, for instance, and your spouse takes out $50,000 in student loans to pay for graduate school, you could be forced by the court to split the student loans and pay half of it.
According to Harrison, it’s possible to create a payment plan with the court, but you may need to pay the full amount all at once.
Why student loan debt can lead divorcees to take on more debt
Class of 2017 graduates left school with $39,400 in average student loan debt.
With a 10-year repayment term and a 6.00% interest rate, that’s a monthly payment of $437. So it’s no surprise that 28% of student loan borrowers with federal loans in 2017 were on income-driven repayment (IDR) plans, according to the College Board.
These plans make it possible to get a lower monthly payment based on your discretionary income and family size rather than on the original repayment terms.
When you have monthly payments that you can’t afford or that are stretching your budget too thin, paying thousands of dollars for a divorce out of pocket can be difficult.
Based on our survey, 58% of student loan borrowers took out more debt to cover the costs of their divorce versus 43% of people without student debt. What’s more, 23% of student loan borrowers borrowed $10,000 or more for their divorce, and 10% took out $30,000 or more in loans.
Why delaying divorce can be costly
Student loan borrowers are more likely to delay their divorce because of the costs associated with an annulment. Of the people we surveyed, 35% of respondents with student loan debt had delayed the proceedings because of cost, while only 24% of people without student loans did so.
But delaying a divorce can come with its own costs. “People’s whole situations can change,” said Harrison. “There are a lot of different factors that come into place. Things may change financially for you where things get worse, and if you had gotten some assistance, you could have gotten a divorce when you wanted it.”
To avoid this problem from the get-go, Harrison recommended getting a prenuptial agreement. “The easiest time to get someone to agree with something is when you’re in love,” she said.
Here are some other potential issues that could come up:
- New and appreciated assets: Any assets that you accumulate before you file for divorce can still be considered marital property.
- Alimony: If you’re going to be on the hook for alimony, the amount and duration of your monetary support are partially based on the length of your marriage.
- Emotional costs: Nobody wins in a divorce, and delaying the end of a tumultuous relationship can be hard on you and your spouse. If children are involved, delaying the inevitable can also be hard on them.
- Moving on: Waiting to get divorced can make it difficult to move on. In fact, if you start a new relationship or move out before filing for divorce, that decision could be used against you, especially if it comes to a custody battle.
How student loans can lead to divorce
More than a third of student loan borrowers claim that debt and other money factors contributed to their divorce, whereas only 23% of divorcees with no student loans claim the same reasons. In fact, 13% of divorcees blame student loans specifically for ending their marriage.
Harrison sees how student loans could make other problems worse, but she doesn’t see them as the primary reason for someone wanting to leave a marriage.
“Usually there’s some relationship stuff that’s going on, and then on top of that, they start to complain about the debt,” she said. “I don’t think [student loan debt] would be the driving factor, but it’s definitely a secondary factor.”
That said, money problems of any kind can make for a rough marriage, and if you have oppressive student loan debt, the financial pressure can become unbearable.
Large debt balances and monthly payments can make it difficult to buy a home, save for retirement, or make it from paycheck to paycheck. And since it’s virtually impossible to get student loan debt discharged in a bankruptcy, you’re stuck with it whether you can afford it.
This feeling of being trapped can exacerbate all the other issues you encounter in marriage, money-related or not.
Another survey we did about student loans and relationships found other ways student loan debt can harm a marriage. For example:
- Thirty-six percent of student loan borrowers report having lied to a partner about money.
- Roughly a third of respondents claimed a decreased sex drive because of their student loans.
- Many student loan borrowers have delayed big relationship steps because of their debt, including starting a family and taking their first romantic getaway.
While student loan debt isn’t guaranteed to cause problems in a marriage, it can be a concern.
What you can do about your student loan debt
If you’re trying to manage student loans and marital problems, finding ways to reduce your debt burden can help relieve some of the pressure.
If you’re already considering divorce, you can still improve your monthly cash flow and reduce the amount of debt you need to take on as a result of the annulment. Consider these steps.
1. IDR plans
If you have federal student loans and aren’t already on an IDR plan, applying for one could reduce your monthly payment to between 10% and 20% of your discretionary income.
This option alone can ease a lot of short-term cash flow problems and make it possible to cover other essential expenses and work toward other financial goals. But keep in mind that private student loan companies typically don’t offer IDR plans.
2. Apply for a forgiveness program
Federal student loans also give you access to loan forgiveness, primarily through the Public Service Loan Forgiveness (PSLF) program and teacher loan forgiveness.
The PSLF program, for instance, offers forgiveness after you’ve made 120 qualifying monthly payments if you work for a qualifying government or nonprofit organization and meet other requirements.
While this may not necessarily solve short-term problems, it can be the light at the end of the tunnel that you need right now.
3. Student loan refinancing
Student loan refinancing companies allow you to consolidate your student loans into one new loan and potentially get a lower interest rate or monthly payment in the process.
These lenders offer both fixed and variable interest rates, but you typically need a great credit score and financial profile to get the lowest rates available.
Student loan companies also allow you to change your repayment term — some of the best lenders go up to 20 years — which can also help you lower your monthly payment.
One drawback to refinancing federal student loans is that you lose certain benefits, such as access to IDR and certain student loan forgiveness programs. But if you don’t need those benefits and you can get a lower rate or payment through refinancing, it can be worth it.
Whatever you choose to do with your student loans, it’s essential that you take the time to do your research and consider all your options.
By doing your due diligence, you can potentially improve your relationship with your spouse. And if not, you can at least improve your financial situation for the long term.
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This survey on divorce and student loans was conducted from June 25 to June 28, 2018, in partnership with SurveyMonkey. We collected 808 responses from adult Americans 18 and older who identified as divorced.
Interested in refinancing student loans?
Here are the top 9 lenders of 2022!| Lender | Variable APR | Eligible Degrees | |
|---|---|---|---|
 | 1.74% – 8.70%1 | Undergrad & Graduate | |
 | 1.74% – 7.99%2 | Undergrad & Graduate | |
 | 1.74% – 7.99%3 | Undergrad & Graduate | |
 | 1.89% – 5.90%4 | Undergrad & Graduate | |
 | 1.74% – 7.99%5 | Undergrad & Graduate | |
 | 2.05% – 5.25%6 | Undergrad & Graduate | |
 | 1.86% – 6.01% | Undergrad & Graduate | |
 | N/A7 | Undergrad & Graduate | |
 | 1.99% – 8.38%8 | Undergrad & Graduate | |
| Check out the testimonials and our in-depth reviews! 1 Important Disclosures for Splash Financial. Splash Financial DisclosuresTerms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. 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Earnest DisclosuresStudent Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team. 3 Important Disclosures for SoFi. SoFi DisclosuresFixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi. 4 Important Disclosures for Laurel Road. Laurel Road DisclosuresAll credit products are subject to credit approval. Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com. As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount. Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate. Interest Rate: A simple annual rate that is applied to an unpaid balance. Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%. KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. This information is current as of April 29, 2021. Information and rates are subject to change without notice. 5 Important Disclosures for Navient. 6 Important Disclosures for LendKey. LendKey DisclosuresRefinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution. Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810. As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay. 7 Important Disclosures for PenFed. PenFed DisclosuresFixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. 8 Important Disclosures for Citizens. CitizensBank DisclosuresEducation Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR). IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%. ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%. Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer. Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review. |
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