California Family Law Attorney
California Family Law Lawyer Attorney Profile Click here to visit our blog Links Resources
Contact the Law firm of Thurman W. Arnold III
click to call
225 South Civic Drive Suite 1-3 Palm Springs, CA 92262

How do CALIFORNIA COURTS divide EDUCATION LOANS?

Q. My husband completed his training as a doctor after we married. He incurred substantial educational loans which we paid off during the marriage. What rights to I have for recovering those costs?


The community estate is supposed to be reimbursed for community contributions to education or trainingof a spouse that substantially enhances that person's earning capacity. The amount reimbursed must include interest at the legal rate, accruing from the end of the calendar year in which the contributions were made. FC section 2641(b)(1); see FC section 2627.

Reimbursement is not appropriate in the following circumstances:

  • The parties expressly agreed in writing to the contrary [[FC section 2641(e)]; or
  • The contributions were for ordinary living expenses that would be incurred regardless of whether the spouse attended school, stayed home, or worked [Marriage of Watt (1989) 214 CA3d 340, 354].

If the loan is still outstanding at the time of dissolution, the balance is not divided but is instead assigned to the party who was educated or trained, except when the parties expressly agreed in writing to the contrary. FC section 2641(b)(2)(e).

Nonetheless, the Court may reduce or modify the reimbursement and assignment of educational loans to the extent circumstances render such a disposition unjust, including the following [FC section 2641(c)]:

  • When the community substantially benefited from the education, training, or loan incurred for the education or training of the party. There is a rebuttable presumption affecting the burden of proof that the community has not substantially benefited from community contributions to the education or training made fewer than 10 years before the commencement of the proceeding. On the other hand, it is presumed that the community substantially benefited from community contributions to the education or training made more than 10 years before the commencement of the proceeding.
  • The education or training received by the party is offset by the education or training received by the other party for which community contributions have been made.
  • The education or training enables the party receiving the education or training to engage in gainful employment that substantially reduces the need of the party for support that would otherwise be required.

Professional licenses and education are not "property" that can be divided in divorce or legal separation in California. Reimbursement for community contributions and assignment of loans under FC section 2641 is the exclusive remedy of the community or a party for education or training costs and any resulting enhancement of a person's earning capacity.

However, importantly, the Court should consider the effect of the education, training, or enhancement, or the amount reimbursed, on the circumstances of the parties in ordering permanent spousal support pursuant to Family Code section 4320(b). [FC §2641(d).]

Author: T.W. Arnold


background

Palm Springs Family Attorneys | Contact Thurman W. Arnold III | Site Map | Disclaimer

Professional Web Design The information on this website is for general information purposes only. Nothing on this site should be taken as legal advice for any individual case or situation. This information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.



Address: 225 South Civic Drive Suite 1-3 Palm Springs, CA 92262 Phone: (760) 320-7915
Administration