Last year’s call to “The Ramsey Show” had the team doing a double-take.
James from New York explained that although he believed he’d paid off all of his student loans years ago, his parents recently dropped a financial bombshell: they had taken out a $13,000 Parent PLUS loan to help cover his college expenses without ever telling him. With interest, the total balance is now $17,000.
James called in to ask whether he should now take responsibility for the debt his parents are asking him to pay.
While the loan is legally in his parents’ name, James said the situation has left him feeling torn.
“They took out a loan and didn’t tell you anything about it at all. And yet, they want you to be responsible for it,” host Dave Ramsey said, clearly frustrated.
The Loan Came as a Shock
James, who graduated about nine years ago, told Ramsey’s team that he had already paid off about $15,000 in student loans he took out himself. He had no idea the Parent PLUS loan existed.
“I really thought that was sort of it,” James said. “I didn’t really realize that they had taken out [another loan].”
Ramsey confirmed the legal aspect: since the Parent PLUS loan is in his parents’ name, James is not obligated to pay it.
But James wasn’t asking about legal responsibility; he was asking whether it was the right thing to do.
James and His Wife Make Over $300,000
What made the call stand out even more was James’s financial situation. He and his wife earn about $305,000 per year.
They have a $30,000 emergency fund and only one remaining debt: a car loan that will be paid off by next April.
This raised a red flag for the hosts.
“Why is a couple making $305,000 having trouble paying for a car in cash, let alone paying off the loan?” co-host George Kamel asked.
Ramsey jumped in to say, “What George is saying is you suck at handling $305,000. We can’t figure out what you’re doing with it.”
James admitted that he and his wife could pay off the $17,000 loan immediately, but didn’t want to touch their emergency savings.
The hosts were baffled that a high-earning couple wouldn’t have more financial flexibility.
A Moral Dilemma
From a legal perspective, Ramsey made it crystal clear: “You’re not legally responsible.”
But when it came to the moral question, his tone shifted.
“It’s not fair that you come up to someone a decade later, tell them something that they didn’t even know existed, that they did not agree to, and ask them to pay,” Ramsey said.
“That’s ridiculous. If I had done that, I would have too much honor and pride to tell my kid they had to pay it.”
Even so, Kamel advised James to consider paying off the loan just to keep the peace. “Here’s your money. Pay it off. Or even better yet, apply it directly to the loan,” he said.
Ramsey added: “You guys make so stinking much money now… Maybe they’re recent raises, but I really want y’all to get control of your money so that it’s not an issue either way.”
A Bigger Issue With Parent PLUS Loans
Ramsey used the opportunity to criticize the broader problem of Parent PLUS loans.
They’re horrible,” he said. “We get this call once a month… where the parents didn’t even tell the kid.”
He added that the loans are often used as a way to avoid hard conversations about college affordability.
“All education’s worth it. We’ll worry about it tomorrow. All these lies you people tell yourself and your kids over and over and over.”
Final Advice: Pay It and Move On
In the end, Ramsey told James that while his parents were in the wrong, he might as well write the check and be done with it.
“I’m going to pay it because I can. And I’m going to get rid of it,” Ramsey said, role-playing what James could tell his parents.
“If you come at me again with another one of these, I’m going to give you a big fat nope.”
He then urged James to pay off the car, rebuild his emergency fund, and stop borrowing money altogether.
Ramsey’s team emphasized that clarity and transparency around money is critical, especially in families. Letting debt linger unspoken for years only guarantees resentment later.
For James, this could be a chance to draw a boundary, clean up the mess, and finally move forward.
IMAGE CREDIT: ”Dave Ramsey” by Gage Skidmore, via Flickr. Licensed under CC BY-SA 2.0. Image adjusted for layout.