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How This Millennial Paid Off $102k in Student Loans in Just 6 Years—on a $40k Starting Salary

After graduating from the University of Pittsburgh in 2013, Mandy Velez did some math to see how long it was going to take her to pay back her student loans. The calculations made her feel physically ill.

If she made the minimum monthly payment of $300 per month, she calculated, her $75,000 loan would not be paid back until 2046—by which time she’d be 54 years old. Even worse, she’d end up paying $96,000 in interest on her loan, more than the principle of the loan.

“I saw my total and I was just in disbelief,” Velez, a 28-year-old journalist from Philadelphia, said in a recent interview with CNBC. “I felt sick.”

After getting over the initial shock, Velez did something unusual. She decided to do something about it.

Taking on ‘Multiple Side Hustles’

Though she had a job and a salary of $40,000 a year, Velez realized this wasn’t nearly enough to quickly pay down her loan. She lived in New York, where the cost of living is high, and in addition to her loan repayments she had to cover rent, utilities, groceries, and transportation.

So she turned to gig work.

“I got serious and took on multiple side hustles,” she says, “from dog walking, to cat sitting, baby-sitting humans, to freelance writing. I did all of it.”

She also made other sacrifices. She commuted to work to keep her rent low and she avoided expensive activities outside of work so she could make bigger payments on her loan.

It worked. Over the first five years of her loan, she averaged payments of $1,166 per month. She wasn’t finished though. In 2018, after about five years attacking her loan, Velez still owed $32,000. She decided, however, that she “was done” with her debt and spent the next eight months focusing all her energy and resources on paying her loan back, which she did.

“I’m 28 years old and debt free,” Velez says proudly. (She even threw a “funeral” for her loan to mark the demise of her debt.)

Velez, who today is a managing editor at The Daily Beast, ended up paying a grand total of $102,170 on her loan, some $27,000 in interest on top of her original $75,591 loan.

‘I Have Over $17k in Student Loan Debt’

There are several takeaways from Velez’s wonderful story. First, the shrewd financial mind will notice that she saved $69,000 by paying off her loan early, money she would have paid in interest on her debt. That’s not too shabby, and it’s money Velez intends to use toward buying a home.

Second, Velez was only able to pay off her loans early by engaging in gig work, what she calls “side hustles.” Gig work is one of the most exciting facets of today’s economy. It empowers people looking to hustle to improve their lives and situation, and is attractive to companies and workers alike.

Government attempts to hold back the gig economy only harm workers and companies. Some of the gigs Velez used to earn extra money to pay back her loan would no doubt be illegal if California lawmakers, who’ve tried to outlaw gig work through various efforts, had their way.

Finally, Velez’s experience shows tackling even large student debt is possible through hard work and determination. Many progressive lawmakers have been on a crusade to “cancel” student loans, which they see as unfair or unjust because college has become so expensive.

“I’m 32 years old now,” progressive firebrand Alexandria Ocasio-Cortez said during a recent speech on the House floor. “I have over $17,000 in student loan debt, and I didn’t go to graduate school because I knew that getting another degree would drown me in debt that I would never be able to surpass. This is unacceptable.”

With all due respect, what would be unacceptable is to make Mandy Velez turn around and pay off AOC’s debt as well.

Instead of pleading on the House floor to have taxpayers pay off her loan, AOC should consider using her $174,000 salary—more than quadruple Velez’s starting salary as a journalist—to pay back the money she borrowed. (If the congresswoman needs money managing, perhaps Velez could oblige her.)

‘A Society Where No One Is Responsible’

This week more than 80 lawmakers called on President Joe Biden to issue a memo outlining his authority to “cancel” student loan debt. (The debt would of course not be canceled, the debt would simply fall to taxpayers who didn’t take out the loans.)

There are numerous reasons to oppose such a scheme, not the least of which is its regressive nature. A recent Brookings Institution study found the primary beneficiaries of the policy would be the wealthy.

There may be an ever bigger reason, however.

“We seem to be moving steadily in the direction of a society where no one is responsible for what he himself did,” the economist Thomas Sowell has observed, “but we are all responsible for what somebody else did, either in the present or in the past.”

This is at the heart of the issue of the student loan cancellation debate.

Do we wish to live in a society where we’re held responsible for our decisions? Do we wish to live in a country where the hustle and enterprise of people like Mandy Velez is rewarded, or one in which she feels like a schmuck for working so hard and sacrificing so much to pay back the money she borrowed? Do we want to live in a land where people pay back what they borrow or one in which, if they scream loud enough and lobby hard enough, can make others pay back their debts?

I know which one I’m choosing.

Content syndicated from Fee.org (FEE) under Creative Commons license.

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Jon Miltimore

Jonathan Miltimore is the Managing Editor of FEE.org. His writing/reporting has been the subject of articles in TIME magazine, The Wall Street Journal, CNN, Forbes, Fox News, and the Star Tribune. Bylines: Newsweek, The Washington Times, MSN.com, The Washington Examiner, The Daily Caller, The Federalist, the Epoch Times. He previously served in editorial roles at The History Channel magazine, Intellectual Takeout, and Scout. He is an alumni of the Institute for Humane Studies journalism program, a former reporter for the Panama City News Herald, and served as an intern in the speechwriting department of George W. Bush.

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One Comment

  1. Send this story to AOC. Tell that entitled little whiny child that SHE can pay her OWN college debt. (I wonder if there’s ANY way she could ever prove that she learned anything at school.)

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