A 23-year-old teacher from Houston is grappling with a difficult decision after discovering a fraudulent student loan of $20,000 taken out in her name, allegedly by her own mother. The young woman, identified as Amanda, learned about the unauthorized debt only after receiving a credit alert showing her score had dropped due to accrued interest on the loan. Until that moment, she was unaware she even had a credit history or any outstanding debt beyond an initial $20,000 loan she had agreed to for college tuition.
Amanda shared her predicament during a call to The Ramsey Show on January 16, according to a clip posted online. She explained that the mystery loan was taken out approximately two years ago during her final year of college. Now earning around $48,000 annually as a teacher, Amanda said the second loan far exceeded any reasonable education or living expenses, especially since her mother was only covering rent for a shared apartment with 10 other young women.
Understanding Student Loan Identity Theft
The situation Amanda faces represents a growing problem of family-related financial fraud. Taking out a student loan in someone else’s name without authorization constitutes identity theft, even when the perpetrator is a parent. According to experts, parents often have access to their children’s Social Security numbers and personal documents, making such fraud easier to execute and harder to detect.
Amanda has not yet confronted her mother directly about the loan. Her parents recently divorced, and she believes any conversation would likely result in denial or emotional manipulation rather than honest answers. However, through communication with her father, Amanda learned that her mother may have been aware of the loan and claimed to have been making payments, though Amanda doubts this is true.
Two Difficult Paths Forward
Dave Ramsey, co-hosting the show with Jade Warshaw, told Amanda she has two options, describing both as equally unpleasant. The first option involves reporting the loan as identity theft by contacting the loan servicer and filing formal documentation, including a police report against her mother. The second option, as Ramsey bluntly stated, is to “shut up and pay it.”
However, before taking either path, experts recommend verifying the facts. Amanda should contact the creditor to confirm whether her signature appears on the loan paperwork and gather all available documentation. Identity theft can be reported through Federal Student Aid and the Federal Trade Commission at IdentityTheft.gov, but absolute certainty is essential before making such a serious accusation.
Long-Term Financial Consequences
Failing to address fraudulent student loans can result in severe financial consequences. Delinquent or defaulted loans can damage credit scores and trigger aggressive collection activity. Additionally, poor credit can delay major life milestones, making it harder to rent an apartment, qualify for a mortgage, or secure affordable insurance rates.
Negative marks from unpaid debt can remain on a credit report for years, raising borrowing costs even after the balance is eventually resolved. In some cases, borrowers may face wage garnishment, tax refund offsets, and persistent collection efforts. Meanwhile, the emotional toll of family-related fraud can be particularly devastating, as victims must balance financial recovery with complicated family dynamics.
The longer fraudulent loans go undetected, the more interest accrues and the more difficult correction becomes. Financial experts emphasize that ignoring such debt doesn’t make it disappear but instead allows the damage to compound over time. Anyone facing similar circumstances should investigate thoroughly and develop a clear plan of action, whether or not it involves law enforcement.
Amanda has not yet indicated which path she will choose or when she plans to take action. The outcome will likely depend on what documentation she can obtain from the loan servicer and whether she can confirm her mother’s involvement with certainty.
