California divorce law provides for reimbursement plus interest to the community if community funds were used for the education and/or training of one spouse – in limited situations.
Community Contributions to Education and Training
In a divorce, the community estate may be reimbursed for community contributions to the cost of the education or training of a spouse that substantially enhances that person’s earning capacity. The reimbursement should include interest.
An exception to the reimbursement exists where:
- The parties agreed in writing to no reimbursement; or
- The community contributions were for ordinary living expenses that would have been incurred regardless of whether or not the party attended school.
If an educational loan is outstanding at the time of the divorce, it is assigned to the spouse without offset unless there is a written agreement to the contrary.
In a divorce, the court has the discretion to reduce or modify the reimbursement and assignment of the educational loans to the extent circumstances render such a disposition unjust for the following reasons:
- The education or training enables the spouse to engage in gainful employment that substantially reduces the need of the party for support that would otherwise have been required.
- The education or training received by the spouse is offset by the education or training of the other spouse.
- When the community has substantially benefited from the education, training or educational loan.
There is a rebuttal presumption, effecting the burden the proof, that the community has not substantially benefited from community contributions made less than 10 years before the commencement of the divorce, and that the community has substantially benefited from community contributions made more than 10 years before the commencement of the divorce.
There are rebuttable presumptions that the community has substantially benefitted if the community contributions were made more than 10 years before commencement of the divorce action and that community has not substantially benefitted if they were made within 10 years of the commencement of the divorce action.