My Parents Expect Me To Pay Back My $114,000 Student Loan

Summary

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Episode Overview

Podcast: The Ramsey Show Highlights
Episode: My Parents Expect Me To Pay Back My $114,000 Student Loan
Date: February 10, 2026
Main Theme:
The episode features a caller, Sarah, who is grappling with an unexpected demand from her parents to pay back $114,000 used from a 529 college savings plan. The discussion unpacks the ethics, legality, and relational impact of her father (a lawyer) requiring her to repay money originally intended for her education, exposing deeper questions about family, financial expectations, and communication.

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Key Discussion Points & Insights

1. Caller Situation and Initial Shock

• Sarah’s Background (00:10)

  • Household income: $235k
  • Used 529 plan for most undergrad/grad expenses
  • Still owes $35k in federal loans
  • Parents now request she repay $114,000—the balance of her 529 plan, not their original contributions

• Hosts' Reactions

  • Rachel Cruze: “What?” (00:41)
  • Chris Hogan: “Come again now?... They want you to cover the compound growth that cost them nothing.” (00:50)

2. The Promissory Note and Parental Communication

• Promissory Note Details (01:12–01:44)

  • Sarah’s father, a lawyer, had her sign a note promising repayment of “all sums paid... for my secondary education”
  • Sarah: “I didn’t understand that when I was signing it. I kind of understood it more as, like, my requirement.” (01:53)

• Host Commentary

  • Chris Hogan: “Let him take you to court. I think this would be a hilarious way to end the relationship with his daughter. What a way to go.” (02:03)
  • Rachel Cruze and Chris probe the relationship context and possible financial motivations behind the parents’ demand

3. Family Dynamics, Knowledge Imbalance, and Emotional Impact

• Imbalance of Power & Knowledge (04:35–05:47)

  • Rachel Cruze empathizes: “There was an imbalance of knowledge. Here you have a grown man who you trust, who is a lawyer, who is giving you a paper to sign... Who knows if he slid that to you one morning while you were eating a waffle?” (04:35)
  • She highlights the emotional confusion of being blindsided and suggests Sarah approach the conversation vulnerably and honestly

• Not About Ingratitude (04:22; 07:21)

  • Sarah is concerned about appearing “ungrateful or entitled” and values personal responsibility but was unaware of her obligation
  • Rachel Cruze: “Lead with your heart on this and how you’re really feeling... keep it less about money. I think you might have a better shot.” (07:42)

4. Legal and Practical Advice

• Legal Ambiguity and Next Steps (05:58–07:10)
  • Chris Hogan recommends asking her parents about their actual 529 contributions and possibly negotiating a middle ground (05:58)
  • Suggests consulting a lawyer: “I would honestly, if you want to consult with your own attorney... does this actually hold up? Should I actually be worried?” (06:33)
  • Highlights that the relationship has become transactional and may be permanently changed

5. Navigating the Difficult Conversation

• Rachel’s Script for Approaching Parents (03:12–04:22)
  • Emphasizes honesty, gratitude, and vulnerability:
    • “Hey guys, I had no idea. I was 18 years old... there is no part of me that understood that I would be paying back this money. If I had, I would not have signed this. And I feel very blindsided by this, and I don’t have the money. And I would like to ask if this can be forgiven, because everything that I do know about money tells me that a 529 is there for education.” (03:12–04:22)

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Notable Quotes and Memorable Moments

• Chris Hogan: “They want you to cover the compound growth that cost them nothing.” (00:50)
• Rachel Cruze (on promissory note): “This is diabolical.” (01:52)
• Chris Hogan on legal action: “Let him take you to court... What a way to go.” (02:03)
• Rachel Cruze (empathy): “There was an imbalance of knowledge... Who knows if he slid that to you one morning while you were eating a waffle?” (04:35)
• Chris Hogan: “Either way, we can all agree this relationship just turned into... a transaction and it’s not going to be undone. Like Thanksgiving is forever going to be different now. And so that part is on him.” (06:33)
• Rachel Cruze: “If you lead with your heart on this and how you’re really feeling and the gratefulness, the blindsidedness, how you’re afraid for the future of the relationship, keep it less about money. I think you might have a better shot.” (07:42)
• Chris Hogan (final reaction): “Goodness gracious.” (08:00)
  Rachel Cruze: “Diabolical.”
  Chris Hogan: “What are we doing, parents? This is insane.” (08:01)

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Important Timestamps

• 00:10: Sarah introduces her dilemma and parental demand
• 00:49: Hosts clarify that parents are asking for the compounded amount, not contributions
• 01:12: Promissory note details and Sarah’s recollection
• 02:03: Hosts question the advisability and implications of legal action
• 04:22: Advice on having the difficult conversation
• 05:47: Exploring compromise or partial repayment
• 06:33: Discussion on legal and relational fallout
• 07:21: Addressing emotional impact and family relationship

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Summary Takeaway

This episode offers a deeply personal look at what happens when financial and family expectations collide—with legal misunderstandings, emotional betrayal, and the transformation of a parent-child relationship into a business transaction. The Ramsey team urges clarity, legal advice, and honesty, all while underscoring the emotional cost of treating educational money as a family loan.

Listener advice: If facing similar situations, prioritize open communication, seek legal clarity, and recognize the emotional stakes behind the dollars.

Transcript

[Dave Ramsey]

If your private student loans are in default, you're not out of options. Go to yrefi.com ramsey so I'm 30.

[Sarah]

My husband's 31. Our household income is about 235. My parents had set up a 529 plan for me when I was young, which I ended up using to pay for the majority of my undergrad and grad schooling. I did take out a couple of federal loans just to cover the remainder of my grad school, which we still owe about 35,000 on. Recently, my parents asked me to pay them back roughly $114,000 for the money that I used from my 2529 plan.

[Rachel Cruze]

What?

[Chris Hogan]

Come again now? So, yeah. Is that the money they put in or is that the balance of the account?

[Sarah]

That was the balance of the account.

[Chris Hogan]

That's why this isn't. They don't even understand math. Like, they may have put in 30 grand that grew to 114, and now they want you to pay the 114, the interest, the comp. They want you to cover the compound growth that cost them nothing.

[Rachel Cruze]

Was this ever the plan? Like, had this ever been stated to you ever at any point that you would have to pay this back?

[Sarah]

I don't remember it that way, but my dad is a lawyer, so naturally he had created a promissory note. Couldn't you sign it before? Yeah, before I was.

[Chris Hogan]

Okay. Have you read this note now as an adult?

[Sarah]

Yes.

[Chris Hogan]

And what does the fine print say?

[Sarah]

It says that I promise to pay my parents all sums paid to me for my secondary education, including, without limitation, tuition, housing, and living expenses.

[Chris Hogan]

Yeah, but interest sums is the interesting part. All sums paid to you?

[Sarah]

Yes.

[Rachel Cruze]

This is diabolical.

[Sarah]

I didn't understand that when I was signing it. I kind of understood it more as, like, my requirement.

[Chris Hogan]

You know what? Let him. Let him take you to court. I think this would be a hilarious way to end the relationship with his daughter. What a way to go.

[Sarah]

This is why I'm worried about.

[Chris Hogan]

What was your relationship like prior to this with your parents and. Or just dad?

[Sarah]

Pretty. Pretty good before this. So it's kind of coming out of left field.

[Chris Hogan]

Are they broke? They've been pretty, like, what's the underlying reason why now, you know, over a decade later, they're like, hey, remember that contract you signed when you were a child?

[Rachel Cruze]

Yeah. Have they brought it up at any other point other than now?

[Sarah]

Nah. No, not really.

[Rachel Cruze]

And how long have you been out of school?

[Sarah]

I graduated grad school about a year and a half. Ago.

[Rachel Cruze]

Okay. So, okay, when you brought it up, or have you brought it up, I.

[Sarah]

Just basically asked them. I told them I wasn't aware it was a loan.

[Rachel Cruze]

And what they said.

[Sarah]

They sent me the contract, and then they said, let's talk about it. And so we're going to talk about it tomorrow, which is.

[Rachel Cruze]

Okay. So you need prep for how to best.

[Sarah]

Yeah. Prop the conversation.

[Rachel Cruze]

I. I'll tell you right now if I'm going to. I believe you when you say I had no idea that that's what I was signing. If you know in your heart of hearts that you did not know what that was and that you had no idea that you were going to pay back this money, if you can say in your heart of hearts that that's the case, then I think that. That you go in there and you say, hey, guys, I had no idea. I was 18 years old. I don't even remember this paper. I know that I'm looking at it, that it's signed. But when I tell you I had no understanding that that's what this meant, I am telling you the truth. There is no part of me that understood that I would be paying back this money. If I had, I would not have signed this. And I feel very blindsided by this, and I don't have the money. And I would like to ask if this can be forgiven, because everything that I do know about money tells me that a 529 is there for education. So I am under the impression that that's what this money is for. And I would just say it like that and see what they say.

[Sarah]

Okay. Yeah. I don't want to come off, like, as ungrateful or entitled or like I'm trying to take advantage of them. I want to own up to my own debts. But if you didn't make different financial decisions.

[Rachel Cruze]

If. I'm not gonna. I'm not saying this was the case, but I'm just telling you as a person who's listening on the other side, there was a imbalance of knowledge. Here you have a grown man who you trust, who is a lawyer, who is giving you a paper to sign, and you just go, okay, And I sign it. That. Do you see what I'm saying? You're not in an official office. You're not in a space where you're like, okay, I'm going to sign for my loan. And you don't even remember doing it. Who knows if he slid that to you one morning while you were eating a waffle. Right? Just, oh, yeah, go ahead. And sign this for me real quick. Okay. Like, I don't know how it happened. All I'm seeing is, I'm sensing that there is a balance of power here. A balance of. I'm going to say, of knowledge and power. And. And it feels. I'm not saying he was intending to, but it feels like he may have taken advantage of that, whether intentionally or on accident. And either way, that's what I would say is I just feel like I didn't know. And I'm asking if there's a way to. We've let it go for this long. Can. Can my 529 just be for my education, which is what it's intended to be for?

[Sarah]

Okay. And if they decide to not do that, should I. Do you think it would be reasonable to offer, like, some money or meet in the middle maybe?

[Rachel Cruze]

Yeah. Yeah.

[Sarah]

Okay.

[Chris Hogan]

Because I find out what their contributions were, what they actually put into the account. Did he actually say 114,000 must be repaid? In the last conversation, you had a loan payment schedule based on the final amount that was in that account. Because I don't think this would ever hold up in court that someone would have to repay. Compound growth. I think all sums repaid could be interpreted as the money that they advanced you essentially to be invested in this account, which would be a fraction of that 114.

[Sarah]

Yes. Yeah. Because it's been in there for, I don't know, 15 years.

[Chris Hogan]

Either way, we can all agree this relationship just turned into. Into a transaction and it's not going to be undone. Like Thanksgiving is forever going to be different now. And so that. That part is on him. You can do what you can if you want to keep the relationship alive. You can never repay this. And again, he can try to come after you. And I don't know, what if he has any legal standing to come after you from a dad to daughter, you know, 529 perspective. But I would. I would honestly, if you want to consult with your own attorney and say, hey, what is actually in this? Does this actually hold up? Should I actually be worried? What is actually my obligation based on what I signed, I would at least get that clarity.

[Rachel Cruze]

And, Sarah, here's another thing. Here's another take for you, because there is a relationship here. What does. How does this make you feel? First off, forget the money part. Yeah.

[Sarah]

I'm a little. I'm a little hurt by it and blindsided. Like you said, I kind of. My whole life, I was like, oh, my parents kind of. I was really grateful for them setting me up. I'm in a really good financial spot right now.

[Rachel Cruze]

I think you need to tell them.

[Sarah]

That you start with that.

[Chris Hogan]

You need to share that I'm grateful and I didn't understand what I was signing.

[Rachel Cruze]

And also tell them that you how you fear this could affect your relationship. Just I think if you lead with your heart on this and how you're really feeling and the gratefulness, the blindsidedness, how you're afraid for the future of the relationship, keep it less about money. I think you might have a better shot.

[Chris Hogan]

Goodness gracious.

[Rachel Cruze]

Diabolical.

[Chris Hogan]

What are we doing, parents? This is insane.

[Dave Ramsey]

Why Refi Refinances Defaulted private student loans for struggling borrowers. Learn more at Y r e f y.com Ramsay.