Reimbursement to the Community for Educational Loan Payments

Reimbursement to the Community for Educational Loan Payments

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California Family Code, section 2641 sets forth the conditions under which a spouse must reimburse the community for educational loan payments made from community property. In the recent case of In re Marriage of Weiner 2003 DJDAR 367 the court of Appeal addressed the issue of reimbursement when the education took place before the marriage and community funds were used to repay premarital medical school loans.

 

The trial court ordered reimbursement of the loans and refused to consider any evidence on the issue of the community benefiting from the education. Family Code, Section 2641 calls for any reimbursement to be reduced to the extent the community received a benefit form the education. The trial court reasoned that the Family Code provision did not apply to educational loaned received before marriage.

 

The Court of Appeal concluded that the statute did apply and was intended to cover all educational costs paid with community funds. The case was returned to the trial court to determine if evidence that the education resulted in additional income overcame the presumption under Family Code, Section 2641(c)(1) that the community had not substantially benefited form the education. If the presumption is overcome the reimbursement must be adjusted.