How to Avoid Student Loans From a Graduate Who Did (and Paid the Price for It)

 August 18, 2020
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Laurelei Litke

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Originally published June 4, 2019.

If you’re wondering how to avoid student loans, consider the case of Laurelei Litke.

Litke did everything she could to earn her degree without resorting to debt — only to realize that she paid a different price in the process.

“I worked extremely hard to avoid any form of student loans, but my stress level was not great for my mental health,” the Class of 2017 graduate said. “It’s taken a few years even to reevaluate who I am because I spent years barely being able to see family or friends.”

In retrospect, Litke doesn’t regret her decision not to borrow — but she does wonder how she could have done it better. Her advice to avoid student loans includes …

Prioritize savings when it comes to college

Some of Litke’s family, including her parents, are still paying off student loans. Knowing she wanted no part of long-term debt, she recalled scoffing at college award letters that detailed loan packages prescribed by schools.

“I always felt as though the school was trying to trick me into taking the less cheap option,” Litke said. “This could have something to do with the fact (that) I started (working) in sales when I was in high school, so I could always tell when I was being sold to.”

It wasn’t until halfway through her bachelor’s degree program at Sam Houston State University in Huntsville, Texas, that it hit Litke: Her unannounced goal was learning how to avoid student loans altogether.

“I realized that every decision I’d made thus far had led me to being debt-free,” she said.

She unwittingly — and later, purposefully — used a handful of college cost-cutting strategies as ways to avoid student loans, including:

Extra course credit “I took a college English class during my senior year of high school. I had to pay $50 for the class and $50 for the textbook. I already felt that this was pricey, as it was basically one week’s worth of pay for me, but I knew it would pay off to not have to take it when I was actually in college.”
Staying close to home When I started looking at schools, I was looking out of state. When I realized how expensive that was, I started scaling further and further back, until I was within a 15-mile radius of my own house. The cheapest option was, in fact, right down the road from me. So I went to community college.”
Making the most of a commute “When I attended the small state (university), it was an hour drive from the town in which I lived (and) worked. Luckily, my boyfriend would often commute with me, and I would study while he drove.”
Working through school “When I started community college, I was working 30 to 35 hours a week in a clothing retail store as a sales associate … The store I worked at was right by a mall, so many of my dinners were spent walking the food court for samples.”

The gap between Litke’s tuition and fees and the aid she received was filled in two ways: savings that her grandfather started accumulating when she was 8, and earnings from her in-school, part- and full-time jobs.

Later, she found that her frugality and hard work had taken an unwieldy toll.

Balance the present and the future to avoid burnout

During Litke’s last two years in college, she coupled 40-hour weeks with 12-credit hour semesters. Certain days were reserved for attending class, every other day for work. She’d punch out of a nine-hour shift ending at 11 p.m., then return home to study for the next day’s exam.

“So, though I was living at home, my family didn’t see a lot of me,” said Litke, now a digital marketer for HealthLabs. “I was definitely holding off on a lot of needs. I didn’t have a regular sleep schedule, eating schedule or recreational time. My thoughts were pretty much consumed with school and work.”

Besides burnout, Litke also just missed out.

“I regret pushing myself too hard at times — I could have taken fewer classes at a time, and saved up slower, with fewer work hours,” she said. “I could have gone to more family functions and made more friends … My little sister was 8 years old when I began college. She’s now 14, and I feel as though she’s just now getting to know me.”

While she doesn’t regret finding ways to avoid student loans, Litke allowed herself to imagine a reality where she would have borrowed them. Loans could have afforded her more breathing room, perhaps allowed her to take on an unpaid or low-paying internship that would have furthered her career.

“My biggest regret of working full time is that it was in a field not related to the one that I was working toward,” she said. “I sold clothes, counted tills, managed people and resolved customer issues. These were all soft skills that can be transferred to any facet of life, but had I taken (out) loans, I may have felt freer to put that same amount of effort into something that could have taught me hard skills.”

Besides the toll, consider benefits of avoiding student loans

Often, we highlight the success stories of people who borrowed student loans and fought them off. Litke is a success story because she fought off the very idea of borrowing in the first place.

But if you’re wondering whether to follow Litke’s path, remember that paying for college is a zero-sum game. Borrow now, and you might have to pay loads of interest later. Avoid borrowing, and you’ll pay with your time immediately.

“I feel that borrowing for college increases a student’s dissonance from their present to their future,” she said. “They see that they won’t even have to begin payments until they graduate and they go, ‘Wow, that (is) so far away,’ but it’s really not,” she said.

“I’m happy to know that the savings I have don’t have to go anywhere, and I don’t owe them to anyone. I look at my life as a big blank slate, and not something bogged down by the fact that there are certain bills that I will be paying for decades.”

Litke’s pros of avoiding student loans Cons of avoiding student loans
● Learned about money management at a young age
● Current finances freed up because of a lack of monthly loan payment
● Doesn’t need to make career choices based on student loan burden
● Added stress of working through college
● Limited family and social life that didn’t allow her to enjoy the classic college experience

If you’re leaning toward borrowing federal or private student loans anyway, perhaps to enjoy the college experience you always wanted, at least consider Litke’s lifestyle these days. She doesn’t have to budget for loan payments, and she also doesn’t have to affix her career goals to earning an income that will allow her to make those payments.

Litke struggled in school so that she wouldn’t have to struggle after graduating. Knowing how to avoid student loans, it turned out, was more a blessing than a curse.

“I am grateful now that I was able to accomplish my goal of graduating debt-free, and I am very aware of the toll student loans take on most people my age,” she said. “While the frustration and difficulty really affected me for a very short amount of time when I was younger, the rest of my life looks a lot brighter.”

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1 Important Disclosures for Splash Financial.

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Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount

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Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of May 4, 2022.

2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.

3 Important Disclosures for CommonBond.

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Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. ‍All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.15% effective Apr 22, 2021 and may increase after consummation.

4 Important Disclosures for SoFi.

SoFi Disclosures

Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.

5 Important Disclosures for Laurel Road.

Laurel Road Disclosures

All credit products are subject to credit approval.

Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit

As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.

  1. Checking your rate with Laurel Road only requires a soft credit pull, which will not affect your credit score. To proceed with an application, a hard credit pull will be required, which may affect your credit score.
  2. Savings vary based on rate and term of your existing and refinanced loan(s). Refinancing to a longer term may lower your monthly payments, but may also increase the total interest paid over the life of the loan. Refinancing to a shorter term may increase your monthly payments, but may lower the total interest paid over the life of the loan. Review your loan documentation for total cost of your refinanced loan.
  3. After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship. During any period of forbearance interest will continue to accrue. At the end of the forbearance period, any unpaid accrued interest will be capitalized and be added to the remaining principle amount of the loan.
  4. Automatic Payment (“AutoPay”) Discount: if the borrower chooses to make monthly payments automatically from a bank account, the interest rate will decrease by 0.25% and will increase back if the borrower stops making (or we stop accepting) monthly payments automatically from the borrower’s bank account. The 0.25% AutoPay discount will not reduce the monthly payment; instead, the discount is applied to the principal to help pay the loan down faster.

Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.

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Interest Rate: A simple annual rate that is applied to an unpaid balance.

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This information is current as of April 29, 2021. Information and rates are subject to change without notice.

6 Important Disclosures for Navient.

Navient Disclosures

You can choose between fixed and variable rates. Fixed interest rates are 2.99% – 8.24% APR (2.74% – 7.99% APR with Auto Pay discount). Starting variable interest rates are 1.99% APR to 8.24% APR (1.74% – 7.99% APR with Auto Pay discount). Variable rates are based on an index, the 30-day Average Secured Overnight Financing Rate (SOFR) plus a margin. Variable rates are reset monthly based on the fluctuation of the index. We do not currently offer variable rate loans in AK, CO, CT, HI, IL, KY, MA, MN, MS, NH, OH, OK, SC, TN, TX, and VA.

7 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it  endorse,  any educational institution.

Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of  5 years and is reserved for applicants with FICO scores of at least 810.

As of 11/15/2021 student loan refinancing rates range from 1.90% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.75% Fixed APR with AutoPay.

8 Important Disclosures for PenFed.

PenFed Disclosures

Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.