Student Loans and Spousal Support: Clarifying “Means” in Interim Support Orders

Spousal support determinations often require courts to examine the financial circumstances of both spouses after separation. In many cases, this involves careful analysis of income, assets, expenses, and each party’s overall financial means. However, not every source of funds available to a spouse will necessarily be considered when calculating support obligations.

A recent decision from the Alberta Court of Appeal, Landry v. Constable, provides important clarification on this issue. The Court considered whether repayable student loan proceeds should be treated as part of a spouse’s “means” when determining interim spousal support.

The Court ultimately concluded that repayable student loan funds should not be treated as financial means for support purposes, affirming the lower court’s interim support order and dismissing the appeal.

Wife Enrolled in Post-Grad Studies After Separation

The dispute arose following the breakdown of a marriage between the parties, who had been married in 2015 and separated in October 2023. The couple had two children together.

After separation, the respondent mother enrolled in a post-graduate university program, which she had begun before the separation. She continued her studies while working part-time.

In determining interim support obligations, the chambers judge set the parties’ Guideline incomes as follows:

• Father: approximately $122,230 per year
• Mother: approximately $16,470 per year

The mother also received approximately $76,000 annually in student loan funding, most of which consisted of repayable loan proceeds.

The chambers judge ordered the father to pay interim spousal support and contribute to section 7 special expenses under the Federal Child Support Guidelines.

The father appealed the order, arguing that the judge had incorrectly assessed the mother’s financial means.

Are Student Loan Proceeds Part of a Spouse’s “Means”?

The core issue on appeal was whether repayable student loan proceeds should be included when assessing a spouse’s “means” for spousal support purposes.

The father argued that:

• The mother had access to significant cash flow through student loans;
• These funds should be considered part of her “pecuniary resources”; and
• If treated as financial means, the mother’s access to these funds would reduce or eliminate the need for spousal support.

In essence, the father argued that all financial resources available to a spouse — including borrowed funds — should be considered when determining support obligations. However, the Alberta Court of Appeal rejected this argument.

The Legal Framework for Spousal Support

Under section 15.2(4) of the Divorce Act, courts must consider several factors when determining spousal support, including:

• The condition of each spouse
• Their financial means
• Their needs
• Other relevant circumstances

In interim applications, courts frequently rely heavily on the parties’ current means and needs, as the full financial record may not yet be available. Interim orders are intended to provide a temporary solution until the issues can be fully determined at trial.

Because of this temporary nature, appellate courts typically show significant deference to interim support decisions unless there is an error in principle, a serious misapprehension of the evidence, or the award is clearly wrong.

The Meaning of “Means” in Spousal Support Cases

In family law, a spouse’s “means” refers broadly to the financial resources available to them.

Canadian courts have previously interpreted “means” to include:

• Income from employment
• Capital assets
• Investment income
• Government benefits
• Corporate income available for support
• Retirement benefits or pensions

These sources represent financial resources that generate a real economic benefit for the recipient. However, the Court emphasized that the concept of “means” focuses on resources that produce a net financial gain or benefit. This distinction became central to the Court’s analysis in this case.

Why Repayable Student Loans Are Different

The Court of Appeal agreed with the chambers judge that repayable student loan proceeds do not constitute financial means for spousal support purposes.

The Court explained that although loan proceeds provide temporary access to cash, they are accompanied by an equivalent repayment obligation. As a result, the funds do not create a net financial benefit. In the Court’s words, loan proceeds represent a temporary injection of cash but not a “net transfer of resources.”

The Court also noted that including repayable loans as financial means could artificially inflate a party’s financial capacity while ignoring the debt obligation that accompanies the loan. This approach would distort the true economic reality of the recipient spouse.

Student Loans as Debt, Not Income

The Court emphasized that student loans function fundamentally as debt instruments, not income sources.

Unlike employment income, investment income, or government benefits, student loans must be repaid, usually with interest. Consequently, receiving student loan funding does not improve a person’s long-term financial position.

The Court reasoned that economic hardship is not alleviated when the recipient must repay the funds later, meaning the loans cannot reasonably be treated as financial means.

In many cases, student loan funds are also earmarked for specific purposes such as tuition, books, and educational expenses. Courts have therefore generally recognized that such funding is not available to support a party’s broader living expenses or financial obligations.

Treatment of Grants and Forgiven Loans

While repayable loan proceeds are excluded from financial means, the Court acknowledged that non-repayable funding may be treated differently (for example, grants, scholarships, or forgiven portions of loans). These funding sources may be considered when assessing financial means, as they represent a net financial benefit to the recipient.

In the present case, the chambers judge had already included the grant portion of the student funding in the mother’s income calculation. Only the repayable portion of the loan funding was excluded.

Policy Concerns: Debt Should Not Replace Support

The Court also expressed concern about the policy implications of treating loan proceeds as financial means. If repayable loans were treated as income or financial resources, it could create problematic incentives within the family law system.

For example, the Court noted that this approach could encourage the payor spouse to delay support payments, force the recipient spouse to accumulate debt, or increase financial hardship following separation.

The Court emphasized that such outcomes would undermine the objectives of spousal support under the Divorce Act, which include:

• Addressing economic disadvantage arising from the marriage
• Apportioning financial consequences of child care
• Relieving economic hardship after separation
• Promoting self-sufficiency

Treating debt as income would contradict these objectives by penalizing spouses who rely on borrowing to pursue education or maintain financial stability after separation.

The Court Also Rejected the Father’s Other Appeal Arguments

The father raised two additional arguments on appeal.

Ability to Pay

First, the father argued that the chambers judge misinterpreted evidence relating to his financial capacity to pay support.

Specifically, the father had recently purchased a new electric vehicle and argued that this purchase actually reduced his monthly expenses compared to his previous vehicle.

The Court rejected this argument, noting that the judge’s comments about the vehicle were only one part of a broader assessment of the father’s financial circumstances.

The overall analysis of the father’s income and expenses supported the conclusion that he had the ability to pay interim support.

Section 7 Expenses and Spousal Support

The father also argued that the chambers judge improperly determined spousal support before calculating his contributions to section 7 expenses under the Federal Child Support Guidelines.

Section 7 expenses include extraordinary costs related to children, such as:

• Childcare
• Medical expenses
• Educational costs
• Extracurricular activities

The father suggested that the judge had overlooked these expenses when setting the spousal support amount.

The Court rejected this argument as well, noting that the judge had clearly considered the overall financial picture of the family, including the section 7 expenses. The sequencing of the judge’s written reasons did not indicate that these expenses had been ignored.

Appeals of Interim Orders Are Strongly Discouraged

Another significant aspect of the decision is the Court’s reminder that appeals of interim family law orders are generally discouraged.

Interim orders are intended to provide temporary arrangements until a full trial can resolve the issues. Because of this, appellate courts typically encourage parties to move the matter forward to trial rather than pursue appeals.

In this case, the Court noted that the total amount in dispute was less than $13,000, yet the appeal generated substantial legal costs. As a result, the Court ordered the father to pay $10,000 in costs to the mother for the appeal.

Contact DBB Law for Modern Spousal Support Advice in Calgary

Spousal support disputes often involve complex financial questions, particularly when one spouse is returning to school, changing careers, or experiencing significant income fluctuations after separation.

If you are navigating a separation or divorce in Alberta, understanding how courts assess income, financial means, and support obligations is essential to protecting your financial interests. DBB Law provides strategic guidance to clients across Alberta in complex family law matters, including spousal support, child support, and high-conflict financial disputes. Contact us online or call 403-265-7777 to speak with a family lawyer about your dispute.