My Mom Is Using My 529 For An Exchange Student's Tuition Instead Of Me

Summary

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The Ramsey Show Highlights

Episode: My Mom Is Using My 529 For An Exchange Student's Tuition Instead Of Me
Date: September 26, 2025
Host: Dave Ramsey
Co-host: John (Financial Expert)
Caller: Medical Student

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Episode Overview

This episode of The Ramsey Show Highlights centers on a caller, a medical student, who is distressed after learning that her mother intends to use her 529 college savings plan not for her medical school, but for the family's exchange student's tuition. The discussion delves into family dynamics, financial planning, boundaries, and the consequences of parental decisions on a child's future. Dave Ramsey and co-host John break down the legal, personal, and emotional aspects, exposing deeper family tensions and delivering tough love financial truths.

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Key Discussion Points & Insights

1. The 529 Account & Caller’s Situation

• The caller is an undergraduate senior, receiving VA benefits, and plans to attend medical school.
• Her mother controls a 529 account (potentially over $400,000), but is unwilling to use it for the caller’s medical education.
• Instead, the mother wishes to use the funds for the family’s exchange student, who has lived with them for four years.

Dave Ramsey [01:46]: “You don't own the account, Abby. She does. She can do with it what she wants to do with it.”

2. Legal & Practical Limits on 529 Plans

• Dave admits recent learning on 529 plans: the account owner (typically a parent) has full authority.
• Dave questions if it's even permissible to use the 529 for a non-family member (the exchange student), acknowledging uncertainty about penalties or eligibility.

Dave Ramsey [04:06]: “I'm not even sure she can do that, by the way, without getting penalized... I've never read that you can give it to an exchange student. Only siblings and people in the family... But it doesn’t matter... She’s not gonna give it to you anyway.”

3. Underlying Family Conflict

• The co-hosts point out that the real issue isn't the exchange student, but unresolved tension between the caller and her mother.

John [05:22]: “There’s something deeper here... What’s the tension with you and your mom?”

Dave Ramsey [05:35]: “The exchange student is a symptom. They're not the problem. The problem is your mother and you.”

• The mother’s rationale seems rooted in her belief the caller should take out loans just as she did.
• The caller says she’s self-sufficient, paying for applications, flights, rent, and other expenses on her own.

Caller [05:01]: “I have paid for all of my medical school applications. I’m paying for all my flights... I pay for my rent... I have a job.”

4. Tough Love and Advice on Medical School Debt

• Dave and John warn against taking on medical school debt, especially in the current climate.

Dave Ramsey [06:09]: “Take the exchange student out of the conversation completely... If I were in your shoes... I simply wouldn’t go to med school. I don’t think you can afford to go. She’s not willing to help you. I’m not going to tell you to go $250,000 in debt... That’s financial suicide.”

5. Questions of Parental Responsibility and Generational Patterns

• John questions the logic of repeating hardship just because the parent experienced it, emphasizing that parents have the chance to break cycles.

John [04:41]: “It sounds like an old, like, frat bro. Like, I got hazed, so you get hazed. She should be the one saying how ruthless it was trying to pay back student loans and be a new mom... so I’m gonna take care of you.”

• They speculate about possible deeper issues, including dynamics after a parental divorce, and encourage the caller to confront her mother for clarity.

Dave Ramsey [07:15]: "Did you go at her after the divorce with your dad and she never got over the fact that you took his side…? What happened?”

6. Choosing a Rational Path Forward

• Dave and John suggest that, barring help from the 529, the caller should pursue only what she can afford for medical school, or consider walking away for now.

John [07:33]: “I would opt out of the game. Yeah, that’s exactly right.”

Dave Ramsey [07:47]: “Choose a school you can afford. If you’ve got $250,000…choose a school that’s $250,000 or don’t go…you can find it in med school and get through for that.”

• They underline that prestige of the medical school is less important in medicine: "No one asks the doctor where they went to school ever." [Dave Ramsey, 07:59].

7. The Morality of Parental Toughness

• The hosts draw a distinction between teaching resilience and unnecessarily harming opportunities for one’s child.

Dave Ramsey [08:43]: “There’s a thing where you teach your kids to do hard things, and then there’s a thing where you’re just being a jerk.”

John [08:52]: “What you end up doing is beating your kid down so much before they even get into the world… congratulations on being right and altering everything here.”

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Memorable Quotes & Moments

• Dave Ramsey [01:46]: “You don't own the account, Abby. She does. She can do with it what she wants to do with it.”
• John [04:41]: “It sounds like an old, like, frat bro. Like, I got hazed, so you get hazed.”
• Dave Ramsey [06:09]: “Take the exchange student out of the conversation completely... If I were in your shoes... I simply wouldn’t go to med school.”
• Dave Ramsey [08:43]: “There’s a thing where you teach your kids to do hard things, and then there’s a thing where you’re just being a jerk.”
• John [08:52]: “Congratulations on being right and altering everything here… robbing a generation of potentially a great young doctor because you want to be right. So congratulations on being right and altering everything here.”
• Dave Ramsey [07:59]: “No one asks the doctor where they went to school ever.”

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Important Timestamps

• 00:06 – 01:23: Caller explains her family and 529 situation
• 01:46 – 02:21: Dave clarifies 529 ownership and authority
• 03:09 – 04:38: Hosts analyze family conflict, legality of using 529 for exchange student
• 05:22 – 06:09: Discussion deepens on emotional issues and parental motives
• 06:09 – 07:58: Dave and John advise against medical school debt, recommend confronting reality and potential family confrontation
• 08:34 – 09:45: Final reflections on parenting philosophies, generational impact, and the real cost of “toughness”

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Tone and Style

The conversation is frank, at times blunt, but compassionate toward the caller’s dilemma. Dave Ramsey employs his signature tough love, balanced by John’s empathetic probing of deeper family wounds. Both speak from experience—financial and personal—unafraid to critique the parent's decisions while staying practical and realistic about solutions.

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Summary Takeaway

The episode uses a complex family scenario to highlight core Ramsey principles: financial responsibility, the dangers of student loan debt, and the importance of honest, sometimes uncomfortable, family conversations. The call is less about the mechanics of 529 plans and more an exploration of how money, values, and family rifts intersect—and the real-life consequences when these are left unresolved.

Transcript

[Dave Ramsey]

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[Caller (Medical Student)]

So I am an applying medical student this year and my family has an exchange student and my mother informed me that they're going to be using my529 to pay for our exchange students education here in America. And I'm worried about how much debt I'm going to be collecting from medical school.

[Dave Ramsey]

Okay, so there's a 529 account that you thought you were going to get to use for school. How much is in it?

[Caller (Medical Student)]

Yes sir, that I don't know. My mom has never disclosed it to me, but she's the one who put in majority of the money and my father didn't really put in much of his income into it because he was in the army.

[Dave Ramsey]

Okay.

[Caller (Medical Student)]

I currently am receiving benefits from the VA to go to a university.

[Dave Ramsey]

Okay. And that's for undergrad or for med school?

[Caller (Medical Student)]

Undergraduate. So it'll stop at the end of the four years that I've used it.

[Dave Ramsey]

All right, and what, and then you're going to go to med school to become an md?

[Caller (Medical Student)]

Yes sir, that's the hope.

[Dave Ramsey]

When will you finish your four years?

[Caller (Medical Student)]

I'll finish this year in 2026.

[Dave Ramsey]

Okay, but as far as you know, there's enough for the exchange students and exchange student and your medical. You don't know how much is in there.

[Caller (Medical Student)]

I don't know how much is in there. My mother said ballpark is over 400k, but she doesn't know. She knows, but she won't just tell me the actual number itself.

[Dave Ramsey]

Okay, alright. So I get to learn something on this show. I've been doing this show for 30 years and I get to learn something brutally, ever so often when I screw up an answer on the air. And about three weeks ago I screwed up an answer on a 529 and I've gotten trashed for screwing up the answer. So I've thoroughly learned about 529s what I didn't know in the last three weeks or so. So here's the correct answer because. And I screwed it up before and I'm not going to this time. You don't own the account, Abby. She does. She can do with it what she wants to do with it.

[Caller (Medical Student)]

Yes sir. So would I take out loans for medical school?

[Dave Ramsey]

I don't know on what planet she can't help an exchange student and still have enough left for you to go to medical school out of $400,000? Yeah.

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[Dave Ramsey]

I don't know on what planet she can't help an exchange student and still have enough left for you to go to medical school out of $400,000. Yeah. Why are you whining about this?

[John (Financial Expert/Co-host)]

There's, like, a bigger conversation to be had.

[Dave Ramsey]

Why. Why is it that your mother. Why are you and your mother at odds?

[Caller (Medical Student)]

Because my mother believes that I should take out loans for medical school like she did for her graduate program.

[Dave Ramsey]

So she doesn't want to. She doesn't want to use the 529 for you to go to medical school regardless of the exchange student.

[Caller (Medical Student)]

Yes, sir. But she then told me she's going to use it for the exchange student instead of for me. And that's, like, where some of the tension lies.

[Dave Ramsey]

Not really. The tension just is that she doesn't want to give it to you for med school, period.

[Caller (Medical Student)]

Okay.

[John (Financial Expert/Co-host)]

She did pour salt in the wound and say, but I am going to give it to this other kid.

[Dave Ramsey]

That's not even. You know, it's not even.

[John (Financial Expert/Co-host)]

It's not.

[Dave Ramsey]

Family member.

[John (Financial Expert/Co-host)]

It's not you.

[Dave Ramsey]

Yeah, I'm not even sure she can do that, by the way, without getting penalized. But that. I don't know the answer to that. And I'm not going to answer something else. I don't know. So. But the. Yeah, maybe she can. I've never read that you can give it to an exchange student. Only siblings and people in the family. You could give it to your. She could give it to your husband, you give it to your wife, you give it to your parents, you can give it to your kids now. But I've never heard exchange student. Maybe you can, though. Maybe you can. It doesn't matter, though. That's not the core issue. The core issue. She's not gonna give it to you anyway.

[Caller (Medical Student)]

Yeah, I understand that. Fair.

[Dave Ramsey]

Yeah. Why?

[John (Financial Expert/Co-host)]

What's her reasoning? It's like, it sounds like an old, like, frat bro. Like, I got haze. So you get haze. Like, she should be the one saying how ruthless it was trying to pay back student loans and be a new mom. And all that kind of stuff. So I have almost a half a million dollars in an account. I'm gonna. I'm gonna take care of you.

[Caller (Medical Student)]

So I have paid for all of my medical school applications. I'm paying for all of my flights to and from interviews at other.

[Dave Ramsey]

Are you a senior?

[Caller (Medical Student)]

Yes, sir.

[Dave Ramsey]

Okay. Wow.

[Caller (Medical Student)]

So I am paying for everything. I pay for my rent. I. Yeah, I do pretty much everything. I have a job.

[John (Financial Expert/Co-host)]

Okay.

[Dave Ramsey]

There's.

[John (Financial Expert/Co-host)]

There's something deeper here. What. What's the. What's the tension with you and your mom?

[Caller (Medical Student)]

This exchange student has lived with us for four years trying to get an associate's degree and has not yet completed it.

[John (Financial Expert/Co-host)]

I know. Let's take this.

[Dave Ramsey]

The exchange student is a symptom. They're not the problem.

[John (Financial Expert/Co-host)]

What is it?

[Dave Ramsey]

The problem is your mother and you.

[John (Financial Expert/Co-host)]

Yeah. What is going on?

[Caller (Medical Student)]

I honestly don't know. I appreciate my mom.

[John (Financial Expert/Co-host)]

Really? You don't know? Really?

[Caller (Medical Student)]

I. I genuinely don't know. I have a feeling it's because she went through this whole process without any help from her parents and expects me to do the same.

[John (Financial Expert/Co-host)]

Well, I can tell you I went through some things all by myself without my parents help. And I'm making dang sure that my son doesn't do that. And there's some things that I had to do that were really hard, that I'm making sure he does because it's appropriate. But.

[Dave Ramsey]

Okay. Okay. Number one, let's. Let's sabi. Let's set this aside. The exchange student is not causing you to go to med school with student loans. Your mother is. She has the money to do both. So take the exchange student out of the conversation completely. And then if I were in your shoes, you're not going to like this, but I simply wouldn't go to med school. I don't think you can afford to go. She's not willing to help you. And I'm not going to tell you to go $250,000 in debt to go be an MD not in the current medical climate. I think that's financial suicide. I know it's your dream, and it's your A game, and it's what you've been wanting to do your whole life. And. Yeah, yeah, yeah, yeah, yeah, yeah. And you're going to do it no matter what I say. I know that. But I'm not going to leave this call without telling you the truth. And the truth is, you should not do this. And then you should call your mom up. And based on the fact I've got to go into student loan debt. I've decided not to go.

[John (Financial Expert/Co-host)]

Yeah, I agree with Dave, and. But I also think it's worth sitting down at a table and asking your mom, what happened?

[Dave Ramsey]

What in the world is wrong?

[John (Financial Expert/Co-host)]

Yeah. What did I do? I had this amazing opportunity ahead of me.

[Dave Ramsey]

Did you go at her after the divorce with your dad and she never got over the fact that you got out, you know, you took his side, or. I mean, what happened? Yeah.

[John (Financial Expert/Co-host)]

Pretty gnarly.

[Dave Ramsey]

Or this woman is just wounded from something else and she's taken out on her kid. I don't know. But this is a game of cat and mouse. I don't want to be in.

[John (Financial Expert/Co-host)]

I would opt out of the game. Yeah, that's exactly right.

[Dave Ramsey]

I'd step out.

[John (Financial Expert/Co-host)]

And Dave's right. Even at the. At the. At the highest case scenario, she could put a hundred grand towards this other student's tuition and still have $300,000 for yourself.

[Dave Ramsey]

Go to school.

[John (Financial Expert/Co-host)]

So it's not about her.

[Dave Ramsey]

Choose a school you can afford. If you've got $250,000 of casually in there, choose a school that's 250 or don't go. Right. Find one that. Because you can find it in med school and get through for that. It's.

[John (Financial Expert/Co-host)]

But if she's making.

[Dave Ramsey]

No one asks the doctor where they went to school ever. Yeah.

[John (Financial Expert/Co-host)]

If she's making you pay for flights. If she's got 400k and she's not paying for tuition your senior year, helping you with rent. There's other. There's something underneath all of this that is borderline pathological. Or mom just thinks she's toughening up her daughter, and then you have to live in that mathematical reality. I simply don't have the money to go to med school right now. And I'm like, dave, I know too many medical doctors whose kids are going to school and they're still paying on their student loans. And so I just. I can't in good faith tell you to do that right now.

[Dave Ramsey]

And John has a PhD in higher education, so he does know actually, what this.

[John (Financial Expert/Co-host)]

Tough, man. It's tough, tough, tough, tough, tough.

[Dave Ramsey]

Yeah, I'm sorry.

[John (Financial Expert/Co-host)]

I hate it for you.

[Dave Ramsey]

That's. You know, there's a thing where you teach your kids to do hard things, and then there's a thing where you're just being a jerk.

[John (Financial Expert/Co-host)]

Right. Or it's like, I'm gonna. I'm gonna box my kid around the ears because I know the world's tough and they're going to get boxed around the ears a lot. And what you end up doing is beating your kid down so much before they even get into the world. And there's something about teaching your kids strength and discipline and resilience. And then there's something about kicking your kids knees out from under them before they leave the house. And so if. Yeah. To this mother. Congratulations. You win. You're gonna have 400 grand in an account and you have what sounds like a pretty hard working, amazing young woman who's gonna have her dreams diverted. Either she's gonna go into catastrophic debt trying to prove herself or she's gonna have to go do something else. Robbing a generation of potentially a great young doctor because you want to be right. So congratulations on being right and altering everything here.

[Dave Ramsey]

Yeah, that's just. But you're a tough old br. You proved.

[John (Financial Expert/Co-host)]

You showed her. Congratulations. You showed her.

[Dave Ramsey]

Give me a break. Create your free every dollar budget today. The simplest way to budget for your life.