Dave Says: A Church Car? You’ve Got to Be Kidding!

Dear Dave,

My mom took out a Parent PLUS loan in 2009 to help pay for my college education. I also took out $70,000 in student loans myself. My mom never made a payment on the loan she took out for me, and now the amount due on the Parent PLUS loan has ballooned to $100,000. She recently told me in her mind it was my loan in her name, and I should be the one to make the payments after I became financially stable. Thankfully I just got a new job making $140,000 a year. With this I can finally make a dent in my own loans, but she asks me every week if I’m going to pay the Parent PLUS loan. My mom is a nurse practitioner, so she makes good money, but she recently financed two new luxury cars within 24 hours of each other — one for work and one for church. She also has loans out from borrowing on her 401(k) and credit card debt. Should I take over the Parent PLUS loan under my name?

— Tommy

Dear Tommy,

Wait, are you serious? Your mom has a church car? I’ve never heard of such a thing. But hey, I’m going to talk to my wife about this. I knew I needed another car, I just didn’t know I needed a church car. Oh, my goodness!

Ok, here’s the deal. If you had an agreement with your mom, or promised at any time to pay back the Parent PLUS Loan when you were able, you should cover it. But that’s not what you told me. It sounds like your mom has a good heart and was just trying to help, but she did it in a dumb way. From what you told me, she’s done a lot of dumb things with money.

Under no circumstances do you take the loan back under your name. In fact, I’m not certain you can even do that with a Parent PLUS Loan. You need to get your debt cleaned up first before trying to help her. If you choose to be a bigger help after that, you need to start things by having a serious conversation with your mom. She needs to hear that she’s being absolutely silly with her money. Let her know you’re willing to help because the loan was for your benefit. But make sure she understands you won’t pay it all, and you won’t do it while she’s making two luxury car payments — including one on a church car. That’s ridiculous.

Offer to be her biggest cheerleader, and help her find a good financial coach — someone with the heart of a teacher. You might want to let her know you’ll match whatever she pays toward the loan, so it’ll feel like a team effort. But also make sure she understands if she pays nothing in any given month, you’ll match that, too.

Good luck, Tommy!

— Dave