‘I Cannot Think of a Worse Form of Child Abuse’: Dave Ramsey to Grad Who Paid Off $28K, Then Found $39K More in Her Name

“I cannot think of a worse form of child abuse. Anybody that would do this to their own kid cannot be trusted. This is horrible.”

Dave Ramsey said that on the November 5 episode of his program, called “Make Decisions Based on Facts, Not Fear”. The caller was Alex from Charlotte. After graduating, she paid off her $28,000 share of her student loans in 13 months. Then she ran her credit report for the first time.

It showed $39,000 in outstanding student loans she says she never signed. Half was in her name alone. The other half was joint with her mom. One loan had gone unpaid, and her credit took a major hit.

In dollars, at her old payoff rate of about $2,154 a month, paying off the new balance would take roughly 18 months. She would face a year and a half of payments on debt she never agreed to take on.

Ramsey’s Freeze Advice Is Right, but His Payoff Advice Skips a Step

Ramsey told her to freeze her credit “today with all three bureaus,” and he warned that her mother could open a credit card in her name next. That advice is correct. A parent who signed your name on a loan once can do it again.

His closing advice is weaker. He suggested she “pay the whole stinking thing” if she skips the identity-theft path. That treats her two kinds of loans as one problem. They are two problems, and the paperwork on each one decides what she can contest.

How Joint Liability Doubles What She Owes

Ramsey brought up joint and several liability. On a joint loan, each borrower owes the full balance. The lender can collect from whichever borrower is easier to reach, and your share on paper means nothing to the lender. So Alex is responsible for the full $39,000, not just her half.

Interest makes this worse every month. Alex said only about $5,000 had gone toward principal. At an example interest rate, a $39,000 balance could build up about $2,730 a year in interest. That money buys no progress at all. Also, late payments stay on her credit report no matter which parent missed them.

Whose Name Is on the Loan Decides What She Can Fight

Loans in her name alone, about $19,500 here, are the clearest identity-theft case. The Fair Credit Reporting Act gives identity theft victims additional rights, including the right to dispute accounts they never opened. To use them, you usually need a formal report, and that report would name her mother.

The joint loans are muddier. Her mother really is a borrower on those loans. Whether a faked co-signature gets removed depends on the lender’s fraud investigation. The call never said whether Alex disputed or reported anything, so neither result is certain.

That leaves two options. If she disputes and wins on the sole-name loans, the most she could owe is around $19,500. If she pays everything, the bill is $39,000. Combined with what she already paid, that comes to $67,000 in student debt tied to her name. Choosing between those options is a family decision. She should still run the numbers before she decides.

A Day Earlier, the Same Crime Was Just Getting Started

On November 4, the show posted a call from a man whose wife’s mother had maxed out a card in their name. They now owed $8,000, and she was asking for their 3-month-old’s Social Security number. Ramsey’s answer: “Your homework is to freeze your credit and her credit and that baby’s credit with all three bureaus.”

Put the two calls together and you see both ends of the same crime. The baby call shows how to stop it early. Alex’s call shows what it looks like two decades later, when it has grown to $39,000. Alex also has two younger siblings in college, and she worries about them.

Five Moves to Make This Week

1. Pull all three credit reports. Alex went more than two years without checking. Look for any loan or card you don’t recognize, especially student loans that list a parent as co-borrower.
2. Freeze your credit at Equifax, Experian and TransUnion. Freezing and unfreezing is free. A freeze blocks new accounts but leaves your existing cards and loans alone.
3. Freeze your children’s files. Parents can request a free credit freeze for a child under 16, according to the Federal Trade Commission. A child with no credit history is the easiest target for this kind of theft.
4. Sort every unfamiliar loan by name. Split them into sole-name and joint accounts, then add up each group. That tells you how much you can dispute and how much you’ll likely have to pay.
5. Decide on a report before paying anything. Making payments on a fraudulent loan can weaken a later claim that you never agreed to it. Choose your options first, then send money.

A credit freeze costs nothing and takes minutes, and Alex’s $39,000 shows what skipping it can cost.

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