Effective But Semi Illegal Ways To Pay Off Student Loans

Effective but semi illegal ways to pay back debt

This completely innocent blogger has researched an ill-fated list of effective but semi-illegal ways to pay off student loans. Some desperados reading may reason when times get tough, the tough needs to get creative. I’ll dive into a list of cons as well as the pros of each. Note: I define ‘semi-illegal’ as a general ‘slap on the wrist’ for something of with reasonable profit. I suggest no one go down this route; it should just be a fun read.

Found this article helpful? Check out our sister blog that has all topics related to making extra money and working from home.

Virtuous disclaimer: TFG does not condone or encourage the list of the following ways of paying off your student debt. This is not a tutorial.

The cause is more noble if you are trying to fund your education like the private education businesses that funded their pockets by selling you an overpriced education. I would not try this if you are trying to kill credit card debt because many of these gigs below need a level mind and good impulse control.

Related: The $1,000,000 Game: How Any Millennial Can Become a Millionaire

I’ll launch some statistic at you as an appetizer to ease the dissonance:

A whopping total of 44.2 million Americans (U.S. has a total population of 300 million) are saddled with student loan debt1.

The delinquency rate of student loans hovers around 15%. Delinquency is when the borrower is 90+ days past due or in default2.

The average student loan interest rate is higher than traditional mortgages3.

The American student debt load is higher than our nation’s total mortgage debt and auto debt combined 4.

15% of students have over $100,000 in debt and as of 2012, there has been 8 billion dollars defaulted in student loans5.

Millennials make up about 40 percent of the unemployment in the U.S.6

Only 27% of graduates have a job in their chosen field of study 7.It might be my leftover teenager angst coming through but these are kind of bummer numbers so let’s begin.

Freelancing For Cash

Tracking cash is hard. Uncle Sam does not have the resources to track cash. That is one reason why cash is king. Side hustling under the table is beneficial to the employer because they can pay you less than the government allotted minimum wage. Although this does not mean they pass the savings onto you. Not very many employers compensate with cash but then again, not many employers are really running into the streets professing admission. Personally, I believe this happens often on a smaller level. Honestly most of us have done this innocently. Have you ever baby sat for some extra cash? You were most likely paid under the table. But there are some real businesses who keep long-term employees under the table and that is illegal.

The pros of freelancing for cash is mostly tax related.

There is no income tax, no state tax, no SSI or FICA tax. Consequently, it’s even easier because there is no HR department. No traces. No paperwork. The cash is liquid. Now, if you would like to triple your jail sentence, you can also claim other government benefits because on paper you are considered unemployed.

The cons of being ‘paid under the table’ are extremely serious. You face a large risk for audits than the average American. Federal auditors have the authority to go back up to 5 years if you fail to report any income so just because you got away with it one year does not mean you’re off the hook completely. If you live in the state of California, there is no audit limit. Suppose it’s 20 years later, the state of California still has the authority to audit you. So you will have to live in fear for that one day the taxman will come knocking down your door and asking for back taxes PLUS all the years of interest owed and compounded. To close: ouch!

I have not even begun to go into the hefty fines you might incur.

This is not something you need on top of your debt. You obviously will not have a tax refund. There is no severance of any sort. You definitely skip out on worker protection, worker benefits, and any sort of savings you might be able to add to a 401K or IRA. There is no retirement benefits or nest egg for you. You can be scammed by your employer with no recourse available. Another con is relatively straightforward: cash can be stolen or lost relatively easily. Once again, there is no justice for the culpable.


No taxes what so ever

Beneficial for the employer

Can claim benefits of unemployment



Jail time

Hefty fine

Long term audits

No 401K or IRA contributions

No worker protection

Possibility of being scammed

No repercussions for stolen cash

Sugar Baby Set-Ups

While I was in college, I was approached by this good-looking guy friend who was playing the nefarious match maker in a host of sugar baby set ups. He asked me if I was interested. He had connections with some wealthy, older clients (from his father’s business, I presume) who wanted first access at some real college girls. A lot of girls liked him, he looked like a Brazilian River Phoenix, which helped. I was so naïve then, I thought he was pulling my leg. No way José.

A year later I saw a news report on the telly about the increasing number of sugar baby set ups among college aged girls.

Apparently, the amount of college debt students were acquiring made sugar babying a popular choice.

Ah! Supply meets demand and thus the official Seeking Arrangement website was born. I also vividly remember the cover story of a beautiful blonde T-148 law student who was looking for a sugar daddy to pay for her law degree. I tried my best to find that piece but it’s buried in the Internets. Most of the responses if I recall were relatively encouraging and I found the content humorous.

Pros of the sugar baby set up includes high compensation and physical gifts as well; both can all be done under the table. Some women (and men!) might find it fun! It can be a confidence booster to some and an anxiety reliever for others who are suffering from a lot of debt. It can be argued in a sense that the set up is mutually beneficial. The level of entry is low since there is no seniority or experienced required to become a sugar baby. It is usually a discreet set up and repercussions are uncommon. However, repercussions do happen from time to time and it may come to bite you back later.

The biggest con is the implicit danger of meeting strangers (online or offline).

It is a dangerous courtship and the nature of many of these relationships are typically not long-lasting. Arrangements can negatively affect your self perception and lower your self-esteem as well. Not many parents will be happy to learn about these arrangements so you would have to keep hush. There are many other moral dilemmas too. Most noteworthy: what if your client’s married? In addition, there is always the chance of being scammed by the website or by your client.


Gender neutral

High compensation

Compensation in cash or gifts

Confidence booster

Discreet for both parties

Low level of entry

Mutually beneficial



Being Scammed

Not usually stable or long-term

All the cons associated with being paid under the table

Bad for self-image

Alters interpersonal relationships

Moral dilemmas.

Selling Drugs Or Alcohol

Although I live in the city of Seattle (which has legalized marijuana) there is still a ongoing argument about the legality of marijuana use between the people, the city, the state, and of course the feds. Selling drugs is definitely an effective alternative that can pay off handsomely. If you are good at it then you can even become a billionaire! However, if you are bad at it (which is much more likely, no offense) you will literally destroy your life 100x times over. Now think about prison, death, turf wars, addiction and there is definitely no easy way out of ‘the business.’ Besides drugs, you might pinch a few dollars by selling alcohol to minors but you won’t make a good living doing it for the risks involved.


High profit


Cash compensation




Turf wars


No ‘quick’ exit

Selling Bootlegs & Knock Offs

“I wonder how Ella l got a DVD of ‘Finding Nemo’ when there is no DVD…..ohhhh.” – 9th Grade Me

Whenever there is a large demand for something, the bootlegs and knock offs instantly flood the market seemingly overnight to match demand. Someone out there is facilitating that baby. The bootlegs vary in the range of quality depending on the price. I knew a man who had posted thousands upon thousands of bootleg DVDs on Craig’s List. It seems innocent enough until word got around he made more than $100,000 doing it! Cash! The biggest sellers were ripped animes and rare Japanese uncensored films. He also made a fortune selling work-out videos like the p90x series. This was back in 2009.

The biggest pro to the bootleg business is the cash compensation. Although the cons of being paid under the table are all applicable here, you can potentially run it like a personal business with a lot of self prescribed freedom. The start-up costs are usually low and the profit margins for knocks offs and bootlegs are high. You can even wait for your customers to come to you.

The king con (see what I did there) is the gigantic risk and hefty fine (anywhere from $1,000 to $5 million) that you can acquire. Selling bootlegs and knock-offs means a definite chance of jail time. The risk is greater since any of your customers can rat you out. In addition, unlike a real business – there is no credibility in this line of work. Bottom line, don’t do it. If you want your own business and have some start-up capital I would look at other alternatives.


Being paid in cash

Self employment

Low start-up cost

Good profit margin

No long hours

No credibility


Cons of being paid under the table

Hefty fines

Jail time

Start up cost

Illegal Ways To Pay Off Student Loans

I hope this was uninspiring in every way. Do you want to share any stories from your morally questionable youth?

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Illegal Ways To Pay Off Student Loans
  1. https://studentloanhero.com/student-loan-debt-statistics/
  2. https://files.stlouisfed.org/files/htdocs/publications/es/15/ES_7_2015-04-10.pdf
  3. https://www.credible.com/blog/what-are-average-student-loan-interest-rates/
  4. http://www.studentdebtclock.org/
  5. https://myscholly.com/theblog/2016/3/25/5-sad-deets-about-student-debt
  6. http://www.newsweek.com/2015/06/05/millennial-college-graduates-young-educated-jobless-335821.html
  7. https://www.washingtonpost.com/news/wonk/wp/2013/05/20/only-27-percent-of-college-grads-have-a-job-related-to-their-major/?utm_term=.0810ddb620ad
  8. https://www.thoughtco.com/t14-law-schools-2154903

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