My Mom Stole My Student Loan Refund

Summary

The Ramsey Show Highlights

Episode: My Mom Stole My Student Loan Refund
Host: Ramsey Network
Date: February 26, 2026

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Episode Overview

This episode tackles a difficult and all-too-common financial and relational dilemma: what to do when a parent, who took out Parent PLUS loans for their child's college education, pockets the loan refund instead of applying it to tuition—and then asks the child to pay back the full amount. Listeners hear expert guidance and empathetic, no-nonsense advice from the Ramsey Network team on boundaries, honesty, and the emotional toll of financial agreements within families.

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Key Discussion Points & Insights

1. The Caller’s Dilemma: Unfair Debt and a Fractured Trust

• Jade's Story (00:10–02:19):
  • Jade’s mother took out $36,000 in Parent PLUS loans in her own name, with a verbal agreement that Jade would help pay them off after graduation.
  • Jade discovered $17,000 in refunds her mother received during her schooling that did not go to her education but remains included in what her mother is demanding she pay back.
  • Jade asks for advice on initiating a conversation with her mom to only pay for what she actually used for her education.

2. Direct Advice: Boundaries, Data & Character

• Confronting the Truth (02:02–03:06):
  • John bluntly states: “Your mom is deceiving you. She’s lying to you.” (01:08, John)
  • Recommends Jade print out her tuition bills and show her mother exactly what was spent versus what was taken out:

    "I would print the bill out and go sit with her and say, this is what was paid for my bill... Where’s the other $17,000?" (02:02, John)

  • Emphasizes maintaining personal integrity and clarity about what Jade is and isn't willing to pay.

3. Exploring All Angles: Could There Be a Misunderstanding?

• Searching for Context (03:06–03:54):
  • Claire and John probe whether the mom might have used the money for Jade’s benefit, such as a car or living expenses.
  • Jade confirms she lived at home and handled her own rent and cell bills. She acknowledges a $2,000 meal plan that could be added to her owed amount as a gesture of goodwill.

4. Broader Reflections: The Parent PLUS Loan Era

• A Systemic Problem (05:06–06:57):
  • John observes that such situations are common:

    “I cannot tell you how often I heard this story from college students. Parents would take out loans in their children's name and use that money to pay for stuff around the house or whatever.” (06:21, John)

  • Claire and John discuss temptations and rationalizations parents face when over-borrowing or keeping refunds, labeling it “a fraudulent use of student loan money.” (06:15, John)

5. Financial Agreements Damage Relationships

• Advice for Families (07:03–07:23):
  • John’s takeaway:

    “Anytime you go into an agreement with somebody you care about…financial borrowing in between you two, just expect that that relationship is going to get sideways at some point.” (07:03, John)

  • Claire advocates for confronting these issues early and avoiding such borrowing arrangements altogether.

6. The Bigger Picture: College Pricing, Expectations, and Transparency

• Family Conversations Need to Change (07:55–09:25):
  • Claire highlights the pressure and pride surrounding college choices and costs on both parent and student sides.
  • The hosts stress the importance of honest, early conversations about what’s affordable, and challenge families to consider alternatives—community college, working part-time, and paying cash if possible.

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Notable Quotes & Memorable Moments

• “Your mom is deceiving you. She’s lying to you.”
  (01:08, John)
  A blunt, empathetic callout of the ethical breach at the heart of Jade’s problem.

• “She’s trying to extort you for 17,000 more dollars.”
  (01:43, John)
  Sharp language highlighting the seriousness of the breach.

• “Commit walking in the door to what your boundaries are going to be on this one and play it as straight as possible…keep your wits about you and keep your integrity and keep your character.”
  (04:26, John)

• “It just became, it became an off book stimulus program in a way.”
  (06:34, John)
  Commentary on the widespread misuse of student loan refunds.

• “Please have that conversation. There’s no shame in that game. It is a privilege if you are able to pay for kids college and it is a privilege for both the parent and the student.”
  (08:47, Claire)

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Important Timestamps

• 00:10: Jade outlines her situation with the Parent PLUS loans and her mother’s demand for repayment.
• 01:08: John directly addresses the lack of integrity.
• 02:02: Advice on gathering and presenting evidence of loan use.
• 03:06: Exploring if the loan was spent in other ways that may legitimately benefit Jade.
• 04:26: John’s advice on setting boundaries and keeping integrity.
• 06:21: Broader discussion on the systemic nature of parents misusing educational loan refunds.
• 07:03: Reflection on financial agreements and family breakdowns.
• 08:47: Claire’s guidance to parents about necessary, honest financial conversations.

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Takeaways for Listeners

• Have written, transparent agreements—even with loved ones—when it comes to large financial obligations.
• Keep clear records of what loan payments covered; check for and question large “refunds.”
• Maintain integrity and clear boundaries even in difficult, emotional situations.
• Avoid Parent PLUS loans where possible and have honest, early conversations about the realities of college costs and funding.

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This episode delivers actionable advice and emotional validation for anyone navigating the tangled web of family and financial obligations—a must-listen for students, parents, and anyone considering co-signed or Parent PLUS loans.

Transcript

[Dave Ramsey]

If your private student loans are in default, you're not out of options. Go to yrefi.com Ramsey My mom helped

[Jade]

me take out some parent plus loans. They are all under her name. I went to college about $36,000 worth with a verbal agreement from me that I would help her pay them back. But now that it is time for me to pay them back because I am out of college and they are coming due, she is requesting the $36,000 payment in full. But when I look back on my tuition bills, she received $17,000 in refunds that she never put back towards the loans. So I'm trying to figure out how to start that conversation of I am not paying you $36,000. I am only going to pay the amount that I used rather than what was. Yeah. So it's, I don't know, it's been interesting and I don't know how to start that conversation.

[John]

Okay, so can, can we cut right to the chase here?

[Jade]

Yeah.

[John]

Your mom and man, I hate to say this, this one hurts to say. Your mom is deceiving you. She's lying to you.

[Jade]

Yeah.

[John]

And I just have a personal rule that if I'm dealing with somebody who lacks integrity, a, I'm going to make sure I don't lose my character in the process, and B, I'm going to be very clear about what I will and will not do. And I will see that through. Because, because trying to preserve the relationship, she's already burned it to the ground. She's trying to extort you for 17,000 more dollars.

[Claire]

Wild.

[Jade]

Yeah, right.

[John]

That's, that's madness. A parent of integrity. If I did this with my kid, I would say, hey, dude, I actually spent 17 grand on my own. You owe this much money?

[Claire]

It's a lot. It's not a number that you forgot. Like, oh, I forgot I did that.

[John]

Lot of money. Honestly, Honestly, I, I, I would, I would print the bill out and go sit with her and say, this is what was paid for my bill. I don't know how much you ended up taking out or how much you had deposited into your accounts. Where's the other $17,000?

[Jade]

Yeah, yeah. She did let me log into her, like, Parent plus loan portal so I can see how much she really did take out for me and all of my sisters. But I had a feeling because then that would have made my schooling a total of $64,000 for three years. And I only went to a state school, so that price didn't really make sense. Plus, I was like, in state. So I did some research and now I have to figure out how to have this conversation.

[John]

Now you got math on your side. You have bills and math on your side. I think it's a pretty straightforward convers when it comes to what you owe. I think it's a harder conversation about what her choice to lie to you has done to your relationship.

[Claire]

I'm trying to find any. I'm trying to find any reason this might be different. Is there any way that, like, during that, did you. Did she buy you a car during that time?

[John]

She paid your car insurance and your food and rent.

[Jade]

So I lived at home. So no. There was one year I did move out on. Lived off campus with some roommates, but I paid my rent and I also like, paid my cell phone bill to her.

[Claire]

Okay.

[Jade]

She did buy a plan for me.

[Claire]

You're breaking up on us, Claire.

[John]

Yeah, you're cutting out on us.

[Jade]

Okay.

[John]

Oh, there you go. Now you're back.

[Claire]

You lived at home, you paid rent. But there was one time when. What, a meal plan?

[Jade]

Yeah, it was like $2,000. And I figured if it became a super big issue, I would offer to pay that back too.

[Claire]

I add that. Listen, if meal plan is part of school, I might add that back in and, and say. Say that. Say, hey, I looked it up. Here's what I found. You know, slider the paper like they do when they. When you make a negotiation and say. Now I do know that there was the one semester where you played paid for my meal plan. I know that that was $2,000. I don't know if that's part of this. I don't see it. You know, try to have some goodwill there, I think. But I agree with what John said. Man, this is dirty.

[John]

I hate this for you.

[Jade]

Yeah, yeah, yeah.

[Claire]

I'm sorry.

[John]

I would commit walking in the door to what your boundaries are going to be on this one and play it as straight as possible and the best you can. This is going to be hard because it's your. It's your freaking mom, but keep your wits about you and keep your integrity and keep your character and don't yell, don't scream, don't make accusations. Just be very clear. And luckily for you, this is all. This is all tracked. Right? You can see what she took out. You can actually probably go to the college and get the. The bill that was transferred the day bills were paid. I mean, you can do some. A little bit of forensic accounting here and figure out exactly what she paid and exactly what she kept for herself.

[Claire]

Wow. Shouldn't have to be like that.

[John]

Jade. I've heard this over and over and over again working with college students.

[Claire]

I feel like we are in the era of the parent plus loan. Like we are getting so many calls about that. I don't know if it just happened, you know, in that decade.

[John]

It's not the era, it's the bills are coming due for that era.

[Claire]

Oh my gosh. And I just. Yeah. I mean obviously if you sign a parent plus loan, the parent is the one on the loan. And usually what's gone arai here is there is some sort of verbal agreement either you will pay or you won't pay. And then the time passes and inevitably someone forgot. Either someone forgot or they change it.

[John]

If you're in a position where you need to borrow a ton of so much money that you need to get a full Stafford loan and get a parent plus loan, then you're in a financial situation that's it's already challenging. And when they write you a blank check and they're like, hey, we're going to send you 20 and the bill's only 15, it takes another level of integrity, another level of discipline to not spend that five.

[Claire]

Oh yeah.

[John]

Because it feels like it just got free deposit. That's a problem for future us. We'll deal with it later.

[Claire]

Yeah.

[John]

And my daughter's going to be rich one day. She can cover it. And that's not the agreement we made.

[Claire]

It's not, it's not.

[John]

Plus it's a fraudulent use of student loan money, to be honest with you. But it is 100.

[Claire]

It is. Yes.

[John]

So yeah. But this. Jade, I cannot tell you how often I heard this story from college students. Parents would take out loans in their children's name and use that money to pay for stuff around the house or whatever.

[Claire]

Yes.

[John]

And it just became, it became an off book stimulus program in a way.

[Claire]

Yeah. Cuz you get that. You get the amount of money needed for that that's allotted to you for the semester. The semester. So. So say you get. I don't know, I'm making this up. Say you get $7,000, but you only needed 5,000. The quote refund. 2,000 bucks just sitting there. It's like, well, I may as well take it.

[John]

It's real hard to not man and not send that money back.

[Claire]

What's the moral of the story, children, to, to check your bill and make sure that your parents aren't jacking you

[John]

is that I think anytime you go into an agreement with somebody you care about yeah. And there is like financial borrowing in between you two. Just expect that that relationship is going to get sideways at some point.

[Claire]

It's going to. And the best thing you can do, if you are listening and you're like, oh, crap, I think I have parent plus loans and I think that this could end up being me, try to jump on, like, don't wait, don't wait. Find, like, talk to that person today and say, what's the deal with this? If you're thinking about taking out those types of loans, of course I'm going to tell you, don't do it. Please just stop in the name of love. And I know it's a tough conversation because let's take a minute and talk about this. College is expensive. It's filled with expectations on the student end and the parent end. Right. How many parents get so much pride

[John]

over saying, my kid goes to this school? Yep. Yes. Yes.

[Claire]

And then there's the student who is probably in one of the most emotional periods of their life making this decision. And it's like, this is where all my friends are going. And don't you want me to have this college experience?

[John]

Colleges tune the s. The sales cycle to a 18 year old, 17 or 18 year old's feelings.

[Claire]

Yes.

[John]

Right. You hear college students say this was the one.

[Claire]

Right. Like they're choosing parents.

[John]

Like, all right, I got to mortgage my soul to. Because they found the one. Right. It's madness. It's madness.

[Claire]

It's madness. And, and then there's the element of, I guess I'm going to call it some sort of shame because what we're finding is a lot of parents are taking out parent plus loans and not telling the student that they did it. Not telling them that that's the way that this whole thing is being funded. And then it comes back to bite in the butt later. So, guys, our teaching on this is so solid and so clear. If you can go to college, pay cash. Okay? And I know that that sounds. What? Jade, you've lost your mind? No, the way to do it is you have to start talking about it before you're 17. You have to start talking about it very, very early, setting that expectation. Yes, you're going to school if it suits you because maybe college life doesn't even suit you for the career that you want. That's another conversation. But make sure it said, hey, you don't have a college fund. We may not have a 529. We expect you to work part time or we expect that you'll go to a community college, whatever that is. Parents, please have that conversation. There's no shame in that game. It is a privilege if you are able to pay for kids college and it is a privilege for both the parent and the student.

[Dave Ramsey]

Why refi Refinances Defaulted private student loans for struggling borrowers? Learn more at Yrefy Ramsay.