A young woman from Pittsburgh thought she had a clear agreement with her mom about paying back student loans. Now, that agreement is falling apart.
Claire recently called into “The Ramsey Show” to explain her situation. Her mom had taken out about $36,000 in Parent PLUS loans for her college education. The understanding was simple: Claire would help pay the loans back once she graduated.
The Numbers Do Not Add Up
Now that the loans are coming due, her mom wants the full $36,000 repaid in full. But when Claire reviewed her tuition records, she found something troubling. According to the billing statements, about $17,000 had been refunded back during her time in school and never applied toward the loan balance.
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In other words, nearly half of the borrowed money may not have gone toward tuition at all.
Claire asked hosts Jade Warshaw and John Delony about how to start the conversation, “I am not paying you $36,000; I am only going to pay the amount that I used.”
“Your mom is deceiving you,” Delony addressed it directly. “She’s lying to you.”
“She’s trying to extort you for 17,000 more dollars,” he continued. “That’s madness. If if I did this with my kid, I would say, ‘Hey, dude. I actually spent 17 grand on my own. You owe me this much money.’”
He encouraged Claire to gather documentation, print out the tuition bills and sit down calmly with her mother. “This is what was paid for my bill,” he suggested she say. “Where’s the other $17,000?”
Warshaw agreed, calling the situation “dirty” and acknowledging how painful it is when money collides with family.
“This is going to be hard because it’s your freaking mom,” Delony added. “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.”
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A Growing Pattern With Parent PLUS Loans
Warshaw said stories like this are becoming more common.
Parent PLUS loans are legally in the parent’s name. But in many families, repayment agreements are verbal. Years go by. Details get fuzzy. Then the bills come due.
Sometimes parents take out more than what is strictly needed. When tuition is paid and there is money left over, schools issue a refund. That extra cash can feel like free money sitting in a bank account.
“It takes another level of integrity, another level of discipline to not spend that,” Delony said.
He went further, calling misuse of student loan funds “a fraudulent use of student loan money.”
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Protecting Yourself Financially
Claire’s situation highlights a broader lesson: Always verify the numbers.
Students can access tuition statements and loan portals. Parents and children should review balances together. Clear communication upfront can prevent confusion later.
The hosts stressed that if students suspect something is off, they should not wait. “Don’t wait,” Warshaw said. “Find that person today and say, ‘What’s the deal with this?’”
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