TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, May 24, 2012

2009 Law Grad Pays Off $114,000 Student Loan -- In Cash

Last week, a Reddit user posted a photo of a $114,000 student loan bill—paid in cash—that elicited thousands of comments and dozens more when we posted it here. Since then, the anonymous alum has stepped forward as Alex Kenjeev, a 2009 law school graduate of the University of Toronto. Kenjeev, who works for venture capitalist firm O'Leary Ventures, told Business Insider the $114,000 payment was the last chunk left of $190,000 in loans he took out during school.

He'd spent years dragging out his payments while pouring most of his income into a start-up. As for why he paid in cash, Kenjeev said he wasn't proving some point about the dangers of credit cards or trying to show off. He just thought it'd be really funny. "It was stressful enough to carry such a big debt load. I thought it would be worth getting a few laughs out of it," he said. "Neither bank thought it was as funny as I thought it was."

I still consider Alex Kenjeev my hero. Slow rolls his debts, makes a bunch on money, then dump bags of cash on the bank to leave him alone. ... My God, that’s so awesome. If I could ever pay back my loans in one sitting, this is how I’d do it. In fact, this is how I thought it would happen. I figured I’d have to play a little dodgeball with my creditors for a couple of years, but then I’d hit it big and earn enough money to make my outstanding debt seem trivial. I’d walk into a bank one day and drop a hundred and fifty thousand dollars on somebody, and bam, I’d be done.

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He took a serious risk being in possession of that much cash.

Besides the danger of getting rolled by a criminal, he also ran a serious danger of getting rolled by the local police.

In the US state and federal law enforcement agencies are entitled to regard possession of large amounts of cash as evidence of illicit activities; specifically: drug dealing.

Since about 30% of cash has residual cocaine on it, it would be relatively easy to get a drug dog to alert on it and thereby seal the deal in terms of probable cause to initiate a civil asset forfeiture against the money.

He was very lucky that the bank to which he brought the cash did not call the cops and give them an opportunity to seize his money before it could be credited to his outstanding debt.

Possession of cash has become a quasi-criminal offence in America. Be warned.

Posted by: Iquit | May 25, 2012 12:29:00 AM

Iquit: Most of what you say may be relevant in the USA, but not applicable to this incident. It took place in Canada.

Posted by: Jan | May 25, 2012 11:52:42 AM