A Dave Ramsey Caller Celebrated Paying Off His Student Debt—Until He Learned His Parents Had Secretly Taken Out Another Loan

James from New York thought he was free from student debt. He had paid off $15,000 in loans and moved on with his life until his parents dropped a financial bombshell nearly a decade later.

Nine Years Later, A Surprise Bill Arrives

During a recent episode of “The Ramsey Show,” James told co-hosts Dave Ramsey and George Kamel that his parents had taken out a $13,000 Parent PLUS loan to help cover his college costs. The problem? They never told him about it. With interest, the balance has ballooned to $17,000.

"I literally didn't know it exists, then," James said. "They were very honest with me about college. I thought that was sort of it."

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James graduated nine years ago. He said he attended a county college for two years, then transferred to a four-year school. He assumed all his tuition had been covered by grants, aid, and the one student loan he paid off himself. The Parent PLUS loan came as a total shock.

Now, his parents want him to take responsibility for it.

"They're asking for responsibility or at least help or assistance with it," he said.

It's Not His Debt, But Should He Pay It Anyway?

Ramsey and Kamel were quick to point out that while James isn't legally responsible for the loan—it's in his parents' name—the situation poses a moral dilemma.

"It's not fair that you come up to someone a decade later, tell them something they didn't even know existed, that they did not agree to, and ask them to pay," Ramsey said. "That's ridiculous."

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James and his wife currently earn around $305,000 annually, with $30,000 saved in an emergency fund and a car loan they expect to pay off by next April. Given their income, Ramsey and Kamel were baffled by the idea that the couple couldn’t afford to pay the $17,000 off immediately.

"Why is a couple making $305,000 having trouble paying for a car in cash, let alone paying off the loan?" Ramsey asked before saying, "You suck at handling $305,000. We can't figure out what you're doing with it."

He also told him what he would do: "I would commit to getting control of my money so that my home does not look like your father’s home."

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A Wake-Up Call To Get Control

In the end, both hosts suggested James pay off the debt—not because he owes it, but because he can, and it might preserve the relationship.

"If I’m you, I’m paying this loan off and just write a check today just to get rid of it," Ramsey said. "And if you want to have a little sit-down with your dad and go, ‘Dad, this is not cool. And if you come at me again with another one of these, I’m gonna give you a big fat nope.’"

They also warned against future borrowing and urged James to get serious about managing his finances. "You want to work this hard and make this kind of money and have something to show for it," Ramsey said.

Parent PLUS loans, they noted, often result in damaged family ties. "These parent PLUS loans, Dave, it's a cancer on relationships," Kamel said. "They're horrible."

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