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Student Loans Cause Divorce

shutterstock 580230316
shutterstock 580230316

The national student loan debt has officially reached a record $1.5 trillion, and it isn’t going over well with the indebted. Needless to say, everyone is a little bit upset. Who can blame them, when the situation necessitates holding off on having kids, buying a house and even preparing for retirement? That is a lot to process. It also turns out that such “little” annoyances are not all that those who are in the hole because of their student loans have to contend with. The divorce rate has always been high in this country. But now, it seems, according to a study by SunTrust Bank, 1 out of 8 divorces is, in large part, caused by fights over student loan debt.

The stats

According to a report conducted by Student Loan Hero, “More than a third of borrowers said college loans and other money factors contributed to their divorce,” while 13 percent of divorced individuals have blamed their student loans outright as the reason for their divorces. These statistics come from a survey conducted with 800 subjects in June by Student Loan Hero.

The debt

Not only is student loan debt higher than it has ever been before, but it is also more difficult than ever to avoid. With the average individual debt that has yet to be paid weighing-in at around $34,000, this marks a more than 60 percent increase in the last decade (according to a report by Experian).

The number of people who owe student loan debts larger than $50,000 has increased by more than 300 percent, according to a report by the Consumer Financial Protection Bureau. “Student loans can really hold you back,” Jacqueline Newman, the managing partner of Berkman, Bottger, Newman & Rodd told CNBC. And “committing to someone with that kind of student debt [can] feel very unfair.”

The prenup

Newman advises people who are married to those with lots of student debt to enter into a prenuptial agreement in order to ensure that “any money put toward that debt during a marriage [will] be credited back off the top of the marital assets.”

Things that are covered under a prenup include retirement accounts, investments, and real estate. It also can cover a partner’s student loans or credit card debt. With a prenuptial agreement, if one partner is helping to pay off student loan debt, then they will be reimbursed in the event of a split.

The takeaway

Student loan debt is a major issue in this country at the moment. More than it has ever been before in our nation’s history. For this reason, the novel dilemma is sparking concerns and problems that have, before now, been relatively minor. Unfortunately, it has come to the point where the debt is so massive, and the divorce rates are so high, that Newman’s advice to get a prenuptial agreement with any spouse carrying too much student debt may be a necessary action indeed.

 

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