How I Paid Off $20,000 In Student Loans Working Part-Time (Full Version)

The full story of how I paid off my student loans working part-time in just 8 months! I vowed to never dance with the debt devil ever again.

How I paid off $20,000 in student loans working part-time…in just 8 months!

Don’t you just love chronicles like this? ūüôā

Actually, I was suppose¬†to¬†construct this piece as an inspirational¬†“you-can-do-it-too” story but the more I wrote about it, the more depressed I became. I didn’t want to lie so I¬†scratched off that “you-can-do-it-too”¬†spin. This is just how I (oh so effectively) paid off $20,000 in student loans working part-time. Spoiler: it was no¬†Disneyland.

20,000 In Student Loans
My concentration was developmental neuropsychology which was a mixture of child study, psychology and biology courses. I learned I like children best behind soundproof, two-way mirrors, lol!

My undergraduate cost around $20,000 dollars after my scholarship, parent’s help and 3 years¬†working as¬†a lab assistant. Bleh, $20,000 smacker-a-roos at a 4.75% interest rate after all that work. That’s like a down payment for a house. My anxiety went through the roof. Even if I was smart enough for medical school (nope!) I would have considered doing something¬†less risky up-front.

Lessening The Load

I made sure I graduated a semester early to save myself some dough. I forbade myself from dropping any classes because I was on a tight schedule to hit the required number of credits. Consequently, I ended up in the class of a particularly pervy boxing teacher. He could hit on me in class in front of everybody and he go home to hound me on Facebook (he found me on Facebook).

Anyways, I pushed on and that was an extra $5,000 semester I did not have to pay, baby.

A couple of people asked me, “why do you want to graduate early?¬†You only get¬†the college¬†experience once.” Well 5 years later, I still think it was a great decision. I don’t regret a thing. Another great decision was when I decided not to¬†attend the graduation ceremony. A 2-hour drive back to campus in the July heat with gas over¬†$3.95 a¬†gallon¬†seemed high to pay for voluntary torture.¬†Plus, I didn’t want to pay¬†good money for a one time graduation gown¬†just¬†to stand around¬†on stage in front of 2,000¬†sweaty people. Everyone¬†pushing elbow to elbow just to have¬†their smartphones raised up above their head so they could¬†record a shaky video that they’re never going to watch.

20,000 In Student Loans
“Congrats.”

Debt Is Not My Friend

I graduated in December of 2012 and I goofed around for weeks trying to decide what I wanted to do with my life. I had maintained a 3.73 GPA and I already had all my letters of recommendation from all of my professors.¬†All I needed to take was the GREs and draft up a personal statement. I had initially decided on attending graduate school right away but¬†after I left the ‘ivory tower‘¬†I¬†started getting cold feet about returning. I really didn’t want more debt on top of¬†preexisting¬†debt!¬†Master level graduate programs rarely offer financial aid besides in the form of loans and maybe some fellowships. Neither of which was going to help get this $20,000 monkey off my back.¬†See how risk averse I am?

I was pretty nervous even before I received my student loan bill. The number was not outrageous but starting¬†adulthood in the hole at $20,000 didn’t exactly feel like a¬†kiss from an angel.¬†That¬†$20K is¬†actually less than a lot of my peers ($30-$35K)¬†and the national average student debt average ($31,710)1 as well.

I intend to pay back everything I borrowed.

That was the promise I made when I signed on the dot. It’s called being a¬†PRW (Personal Responsibility Warrior)2. You roll with the punches! So with that said, let’s get the ball rolling on how I paid off $20,000 working part-time.


Total Debt: (Government) Stafford Loans: -$20,000 @ 4.75%ish Interest

Having Money Helps

Ha. Sorry…(well, it’s true!)…I had $5000ish dollars saved up in my savings account¬†from a few summer internships during high school and hustling (eBay, work-study, etc.) during college. I threw that $5000 to knock off some of the $20,000 principle. My interest was pretty low so in hindsight I would have been better off throwing that money into Vanguard Total Stock Market¬†(VTSMX)¬†but I was 21 and terrified of my debt. I told myself that only after I kill off this $20,000 then I’ll be allowed to feel alive again. I hit the want ads, hard.

Savings= $5,000

Remaining Balance: -$15,000

SEO Content Writer

Being a professional blogger was my first job out of college! It was for a nightlife promotion company in San Francisco. I had my own little desk in a pop-down shop in the richest, yuppiest part of San Francisco. Everyday, I wrote about S.F. hacks and all the stuff tourists like to read. I was invited to local event & parties sometimes just so I could blog about it.

Unfortunately, I¬†was not interested in the subject¬†at all. Something cool like that was just wasted on me. It actually turned me off blogging for a long time. Now I know for a fact I don’t hate blogging. I just didn’t like writing about Coachella or the best place in San Francisco¬†for¬†bottomless mimosas…

I was a 1099 (independent contractor), they paid me bi-weekly and I worked 2-3 days a week. The good boss doughed out $ bonuses every paycheck. Thank you affiliates! ūüôā It was a fun gig but they eventually lost the lease to the pop-down shop. We had to¬†move to a more expensive building and I was a causality in the downsize.¬†ūüėĘ

Income = $5,500/6 months

Remaining Balance: -$9,500

Job Search Done Wrong

I had to find another part-time gig to pair up with my SEO gig. I sent out polished, professionally critiqued resume & cover letters to over 200 employers over the course of a few months and I only heard back from 2 of them.

Since I graduated before everyone else I didn’t have a real baseline of how bad it was out there. I found out later, as it turns out, my experience was pretty standard.¬†A lot of my peers¬†were having a tough time finding work too (except the engineering students, they were doing great). I took a quick peek at the ol’ Facebook and I saw mostly¬†paralegals, barista, bartenders,¬†church youth organizer, administration staff, substitute teacher, joined the¬†military,¬†English teacher abroad, soon-to-be-in graduate school, pregnant¬†etc.

Charlie Day for President!

I remember locking myself in the bathroom to cry because I couldn’t figure out what I was doing wrong.

You know what I was doing wrong? I was not on to LinkedIn every second of the day.

Networking on LinkedIn with real recruiters after my 1st year of struggling made me realize I was struggling because I was approaching the job search thing wrong.

Amazon Mechanical Turk

I started doing mTurk for any sort of extra cash along the SEO gig. I took survey after survey on HWTF¬†(Hits Worth Turking For). I’ll write a full how-to¬†guide on this in the future.

I didn’t mind the work actually. It was kind of relaxing…in an e-sweatshop way…plus it was flexible and I was able to stay at home which meant I skipped out on the commute hour traffic across town. I kept an eye out on the HWTF subreddit throughout the day. I’m guessing I¬†probably spent 3 hours on it every day, 7 days a week, for 4 months. I gave up my Netflix binge to turk instead.

These days, when I’m bored and I don’t feel like thinking, I go on HWTF for another 15 cent hit. They let you transfer your earnings to Amazon gift cards now.

Income= $3,000/4 months

Remaining Balance: -$6,500

Selling Stuff

Everybody has junk before they come into contact with the Financial Independence virus. My room had so much junk that my natural recourse was to sell, sell, sell. I sold a lot of my stuff on eBay & Craig’s List. I sold¬†my expensive Bamboo drawing tablet, a UV nail kit, an old laptop, fish aquariums, clothes and a lot of other¬†little¬†things.

My room (aka mom’s basement) was decorated¬†with garlands of¬†silk flowers. Lana Del Rey was just coming onto the scene.¬†I duplicated Lana’s flower crown in her ‘Born To Die’ video and they sold like hot cakes! Too bad I was too dumb at the time to advance further with that idea so when I ran out of flower heads I just stopped making them.

This is the anxiety I was talking about earlier.

I was laser focused on my loan repayment and I refused to invest a single DIME into what otherwise would have drawn in more profit. Bad, bad Lily.

lana-del-rey-born-to-die-flower-crown
Most of Tumblr in 2012 ^

eBay (after fees + shipping): $1,000

Etsy (after fees, shipping, no material cost): $700ish

Remaining Balance: -$4,800

Am I Done Yet? Just Getting Started.

After my SEO gig ended, I was well over 6 months¬†in and I still had almost $5000 left. Argggggh! Right around this time was when the official student loan bill came in its ugly standard letter envelope. I didn’t even think schools sold loans. My loan servicer was Great Lakes instead of the usual Sallie Mae / Navient. That¬†was one plus because Great Lakes was a smaller company and slightly less prone to ‘processing errors.’

Going back to the website Bare Foot Students where I had great luck finding my SEO gig, I flipped through page after page and came across an ad from a company I had previously interned for in high school! They agreed to hire me as an after school media instructor. I taught pretty much exactly what I learned as an intern there which was a smorgasbord of introductory courses to Photoshop, Maya 3D, Unity, InDesign, Adobe Illustrator, Final Cut Pro etc.

They gave me a small stipend for signing up and the promise of a larger stipend at the end of the 3 month course period. If I recall, the sign up stipend was only $200 but the last stipend was a good $5,000-$7,000 depending on the class size and their funding for the year.

Stipend #1: $200

Remaining Balance: -$4,600

Final Push

In theory, I was pretty much done once the 2nd stipend came through in 3 months. Teaching the class for 3 hours everyday after school plus 1 hour to wrap things up meant I had a lot of free time on my hand. Having idle hands makes me nervous because idle hands make trouble.

I became a “mizu shŇćbai” aka¬†bar¬†hostess through my mom. She had a¬†friend who owned a successful chain of restaurant bars in San Francisco.¬†I was a¬†very uninspired hostess to be perfectly honest.¬†I was there to¬†pour a bottle of Sapporo¬†and look cute. Even as a boring hostess, I brought in an absurd amount¬†of money¬†for such a low entry position. The bar tips were $150+/night alone¬†before adding in¬†my hourly wage.¬†There are a decent number of high rollers in San Francisco who wanted to part with their money I guess!

I also had full run of the snack fridge…maniacal laughter

In 2 months, I made around $4500 working 5 hours on the night shift, 3 nights a week.

Income: $4500/2 Months

Remaining Balance: -$100

I was not that broke that I couldn’t kill off a hundred dollars. I had collected some¬†red envelopes¬†totaling $300ish dollars. Great perk about being Asian: old people you barely know will¬†give you $10-$100 in cash every year like clockwork on new years & birthdays out of politeness.

Taxes

I went onto Amazon and brought myself a copy of Turbo Tax (the version that supported 1099). It took a few hours but I fumbled my way through it the best I could; I knew the basics behind a W2 vs 1099 since my mom had dealt with something similar. But still I was expecting a large tax bill for myself. Maybe I did it wrong but I only owed $1600 to federal which was great because when the second stipend paid out, I was at a surplus.

So I basically ended my first ever year out of college from -$20,000 in debt to about +$5000 net worth.

I guess the lesson is…um…wait..didn’t I start university with $5000?

DID I just blow 4 years of my life just to break even?! I don’t want to go into that right now…

Net Worth (1st Year): = $5000

Parents Are Awesome

It turns out I didn’t even need to file myself. My parents told me later they¬†an accountant friend¬†who would have done it for me for free.

D’oh!

Actually this leads me to my next point.

I was only able to pay off $20,000 on part-time pay ONLY with my parents help!

I had zero expenses (not even transportation!) during the 1st year that I was living at home. See what I mean when I said I got depressed outlining this?

This was not a miracle or a feel good story. This was as tedious to read as it was for me to write! My experience was just a regular GRIND. An uneventful 12 month grind.

Mental State

Beyond my parents, I can attribute the speed of the pay off timeline to my debt adverse mentality. As I got older I learned more about the power of leverage 3 but as a 22-year-old, I honestly thought it was the end of the world.

I do not feed¬†into the “treat yourself” mentality.¬†I just don’t believe in treating yourself when you’re in a self-imposed mess. My philosophy is to stick it out no matter how bad it looks. Just¬†focus on the result like a laser! Obviously that has downsides too which I mentioned above but, eh, that’s just how my mind works. Get that nose to the ground and dig.¬†Don’t stop digging until you’re on the other side, fool.

So now what? Graduate school? More debt? To¬†have the pleasure of doing this all over again? NO.¬†I was not ready for that yet so I told myself I’ll take an extra year to build up my nest egg¬†so I wouldn’t have to take out loans. Either way, it wasn’t going to happen. I was just lying to myself.¬†There was no passion left for me to return to¬†academia.

2 Years After Graduating

How I Paid Off $20,000-min-banner, 20,000 In Student Loans

I finally found permanent employment at a media company after an entire year of struggling. Best part was I actually scored a decent salary Рthank you LinkedIn! I was hired because I had an eclectic combination of technical & design skill on media platforms I picked up during high school. My research based college education had zero real world applications outside of a controlled lab setting. The lab jobs were almost always in the East Bay and at a lower salary ($21/hour) than a media job that congregated within the city of San Francisco ($27/hour).

I moved into a cheap, shared flat with 4 other roommates. I did continue my¬†part-time gig as a bar wench; good money and…the snack fridge with free mochi ice cream…mmmm.

To thank my parents I brought them a new iPad and took them both for a nice dinner out.¬†Nothing too crazy,¬†I vowed to never dance with the debt devil ever again.¬†The whole experience taught me how to¬†persevere even if¬†the¬†student to adult transition was a bit rocky, I’m still OK.¬†ūüėČ

Net Worth (end of 2nd year): = $22,000


 

What was the most helpful thing that got you through the first few years after college? Is it easier to be a college student or to be a working adult?

  1. https://lendedu.com/blog/student-loan-debt-statistics
  2. http://freedomisgroovy.com/how-to-become-a-personal-responsibility-warrior-in-five-steps/
  3. http://passiveincomemd.com/how-leverage-can-multiply-your-returns-create-massive-wealth-part-1

25 Replies to “How I Paid Off $20,000 In Student Loans Working Part-Time (Full Version)

  1. My word! You are a HUSTLER! If only my mindset was like yours at that young age. Kudos, girl!

    For me, I was living at home rent free…which got me trough the first few years after college. Once I started working, I realized I had to fend for my own financial situation..which is when I got my act together. Still, it took me years to pay off my debt. ‚ėĻÔłŹūüėę

    1. Danielle you’re more of a hustler than me! I dug down for a year, takes a real champ to endure it longer.
      Aw no sad face! ūüėė You paid it back, hon!! Some people never dig out in time. I say congratulations on your journey!!!

  2. I LOVE this post, especially the point about being Asian haha. I also got lucky money from my uncles and aunts until after I graduated college. That definitely help with the expensive plane ticket and up the savings.

    I’m so glad you paid off such a huge amount of debt in such as short time. Hard work pays off. Great post! =)

  3. Fantastic work being so debt adverse while in college. That student loan debt didn’t feel real until I got out into the real world and I wasn’t as bad as most.

    You made the right decision to pay off the debt and not using it as leverage. When you are trying to destroy a big debt you just have a different mindset. Unlikely you would have invested that much money over the same time period. Also a guaranteed 4.75% return is awesome.

    1. Thank you for the kind words Grant! I like the way you frame it – a guaranteed 4.75% return is better than a possible 10% return ūüėõ

      My debt didn’t feel real until senior year. Every time I tried to start a conversation about money/student debt with my peers I got shot down, they don’t want to talk about it. It’s sad how that is the norm.

  4. Lily, this is super impressive! You did all the right things in choosing to eliminate costs after school like living with your parents + not commuting. I have so much respect for you just sucking it up and just doing whatever it took!

    I definitely wouldn’t have been able to stand that (nor did I). I was out of job right out of college and barely making rent while also struggling with the terrible job market. I thought about moving back home but for various reasons was didn’t, which in hindsight I don’t totally regret, but it definitely would have saved me a chunk of change back then!
    Jing recently posted…5 Things Your Friends Have In Common With Credit Card CompaniesMy Profile

    1. That means a lot to me Jing! Thanks for stopping by too ūüôā

      I thought your story about jumping from NYC to SF was crazy daring. I thought to myself “oh my god, I couldn’t do without mommy there!” Lol!

  5. I love that you graduated college early as well. I did the same thing. Why pay for my college when you can go out and start earning the money. I had way more fun after college when I could have different experiences than going to the same frat party with the same people.

    The biggest boost that I got was being able to live with my parents for 18 months after college that set me on the path to financial freedom. Being able to save up and get my financial house in order was the game changer that I needed ūüôā
    Mustard Seed Money recently posted…Dealing with Buyer’s RemorseMy Profile

    1. Hehe supportive parents are game changers, they’re total blessings.

      I know there’s stigma in having to return to the “nest” but that’s where you tell yourself “the world’s just not ready for my awesomeness yet!” :p

  6. The best thing to happen to me after graduation was the fact I moved to a city in the middle of nowhere!!! It’s hard to get into debt when there’s nothing to do or buy ūüėČ
    …then I started dating my future wife and that’s when spending money got really easy. Going out to dinner and plays and shows.

    Being a college student may be easier since you are generally insulated from the real world. Graduation day is the rude awakening
    Budget on a Stick recently posted…I got a pay raise and had a plan for it months before I got it‚Ķin a good wayMy Profile

    1. Teehee thank you! Lol I remember reading about that in your bio/about page. I was like “oh yeah that’s a smart way to grow your wallet!” A wife and baby does that, life doesn’t really stop for anyone huh? ūüôā No worries all is fine and I’m sure all will turn out well Budget ūüėÄ

    1. Hehe thanks Erik! 3 years is darn impressive. I did have a 5k head start in savings.

      This was a few years ago, me and hubby have build up a decent nest so we’ll be throwing money into the market and nothing else but investments ūüôā

    1. Aw man that’s awesome Troy!! I knew a few kids who went to school on scholarships but their grades dropped from partying and they lost it. Good for you for making it through! Unscathed!

  7. I would bet the one of the reasons why your parents were so willing to help you out was because you were hustling your butt off! No one can accuse you of being lazy! Excellent job.

    1. Kudos on graduating early to save big $$$. Many of us can’t help graduating with a mountain of debt. I have paid off $30k myself. Mostly by working full time while I was in school and making paying off the rest after school my main priority. I enjoy reading success stories like yours ūüôā

      1. 30K is actually the average student loan debt for undergraduates, which is crazy. You have a much more useful degree though. CPA is a disciplined field to be in. I wouldn’t find full time work for the life of me! I liked reading your success story too!!! ūüėČ

    2. Thank you Mrs. Groovy – your words are so worthy to me it is like I’ve been sprinkled in gold
      ūüėĽūüėĽ My parents aren’t the verbal kind but I think you’re right. Haha tricked them!! They have to like me I’m their only kid!

  8. Super impressive! I actually have a decent amount of student loan debt, but I’m letting it linger due to the great interest rate I have on it (<2%). Just got lucky bc that was the refi rate when I was done school. You definitely made the right decision and now you can focus your efforts on growing your net worth. You've got the hustle in you, love it!
    Passive Income M.D. recently posted…Budgeting Time For Time-StarvedMy Profile

    1. Omg 2%?!? That’s amazing! ūüí£

      I thought my rates were decent…these days it’s around 6% for regular undergrad government loans. You smart, lucky puppy!

    1. Lol Ying!! Hi!! I was on the fence about reporting. The other students didn’t care since he only hit on me. Plus it wasn’t aggressive, he was overly sappy if anything. He did stop after I graduated so that’s good ūüôā

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