When Renee from New Orleans called into The Ramsey Show, she revealed a painful family story: her dad consolidated three Parent PLUS loans — taken out years ago for his daughters' education — and now, as he nears retirement, complains his kids are “the reason he’s broke.”
Personal finance celebrity Dave Ramsey, visibly frustrated, told Renee he felt disappointed by her father’s “guilt tripping.” He urged him to “be a man of honor,” pay his own dues and stop unloading the consequences of his decisions onto his adult children.
“[He] signed up for this trip. Don’t dump it on your kids every time they come over for Thanksgiving,” Ramsey declared.
The Parent PLUS Loan is available to parents of college-bound children to help pay for education expenses not covered by other financial aid. The loans are credit-based, not based on the family’s income or assets.
Renee admitted that there was a vague understanding that the siblings would pitch in after graduating, but that plan quickly dissolved. When discussing the possibility of the sisters paying the loans off, Renee’s mother insists none of them pay unless all three contribute equally.
When asked whether she and her sisters had roughly $15,000 each to pay off the $40,000 balance, Renee admitted they didn't.
Renee, who is now in her 30s, earns $50,000 a year, said she and her husband bring in a combined annual income of around $125,000. They’re not in a financial position to cover the Parent PLUS loans her father took out, with just $3,000 in their savings and a car loan of $26,000 hanging over their heads — not to mention a third kid on the way.
Renee’s oldest sister paid for about a year before getting married and having a child, after which their parents relieved her of the obligation. The second sister followed the same path. “By the time it got to me, none of them were paying, so they never made me pay,” Renee explained.
Emotionally exhausted from the ongoing guilt, the resentment is taking its toll on Renee, who admitted, “It has pushed us away.” Ramsey was empathetic towards her and firm in his assessment: “Nobody likes hanging out with a travel agent for guilt trips.”
