Bryce Nelson is 20, a junior, works two jobs and meticulously manages his financial aid each year on his way to earning a bachelor’s degree in marketing from the University of Central Florida.
He owes $3,500 in student loans, and he’s working on paying that off before he graduates.
All of which makes Nelson a rare national statistic, but much more common at UCF: He expects to graduate with little to no debt.
“I don’t want to pay for college later,” he said. “I want to take care of it as I go.”
Nationally, about 43 million Americans owe nearly $1.3 trillion in student loans. In 2016, the average undergraduate will carry some $37,000 in student-loan debt.
Florida undergrads are in better shape than those around the nation. For the 2014-15 academic year, undergraduate students had some $25,000 of debt upon graduation.
At UCF, the news is even better. Forty-eight percent of undergraduates carry no debt upon graduation. For those who do incur debt, the average amount is $21,824.
Those numbers help to explain why UCF is consistently ranked among the nation’s best values by Kiplinger’s and The Princeton Review. As the second-largest university in the country with more than 63,000 students, UCF is ranked among the top 100 public universities nationwide by U.S. News & World Report, is number 20 for best online programs, and is ranked 13th — alongside Stanford and MIT — as most innovative.
“UCF makes excellent financial sense,” said Maribeth Ehasz, vice president for Student Development and Enrollment Services. “We offer a high-quality education with talented faculty members, and we work hard to keep students’ costs low. Students are our priority and our staff works one-on-one to help them earn their degree without a heavy debt burden.”
Ask for Help
Nelson said that as an incoming freshman he took out loans to cover tuition and living expenses. The costs worried him and his parents, who see even a few thousand in debt as a negative. So, working with director of student finance Alicia Keaton since his sophomore year, Nelson managed to squeeze by without more debt after securing enough money in federal grants and a campus work-study job at the Alumni Center. He has had a variety of off-campus jobs to help him pay for living expenses.
“Right now, I’m in good shape,” said Nelson, a first-generation student from Fort Lauderdale. He said Keaton taught him how to be more savvy about applying for aid, helped him get a work-study job that covers $2,000 a semester and to seek out grants.
“So many things I didn’t know about that if I had known my first year here, I would have done things differently,” he said.
But what about UCF’s education?
“I’ve made so many contacts here, people who advise me or suggest I apply for this internship or that one,” said Nelson, whose campus job is at the Alumni Center. “My experience, the faculty and people who have helped me, it’s been invaluable.”
In fact, Nelson plans to stick around even after he receives his bachelor’s degree in marketing.
“I’m not leaving before I get my master’s,” he said. “I keep telling my mom, ‘Yes, I’m graduating in two years, but don’t forget, I want to study two more.’”
The Push: Financially Literate Students
Keaton, whose office serves thousands of students each year as they maneuver the complexities of financial aid, said she knows students are overwhelmed. The reams of forms they must fill out before first arriving on campus can be daunting, Keaton said, but her office assists to make things manageable. For some, especially first-generation students like Nelson, there’s no one at home who has the experience to guide them through the process of applying for aid.
“It’s a lot for some students. Some are terrified of debt. Some take on too much debt,” said Keaton. “We are always trying to find better ways to help them manage the cost of their education. I tell them that debt is not always bad, it just has to be properly managed.”
And, she added, “Never borrow more than you need.”
To help educate students, UCF launched in 2015 the Centi$ible Knight$ program establishing the university’s biggest push to date to help students stave off debt. The effort has become the beginnings of a community-wide financial-literacy network accessible to students from high school to graduation.
Through the program, UCF counselors established an outreach effort with Maynard Evans High School in west Orange County, teaching financial literacy to high school seniors. In addition, 10 university services, including the Student Academic Resource Center and the FAIRWINDS Credit Union as well as the Career Services office joined the program, each providing similar debt counseling and materials to students.
“We needed to have a unified message so we didn’t confuse students as they went from one program or service to another,” Keaton said. “We’re on the same page now.”
Centi$ible Knight$ launched a website, too, that offers information, webinars, life skills classes and more to help students with financial literacy. Although it’s still in its infancy, the site has had more than 8,000 visitors and more than 200 students have successfully completed online financial courses on the site.
“It’s a start,” said Keaton, adding that the university now has a financial literacy committee and a financial literacy network that seek to educate the student body and encourage more engagement.
Using the website and the tutorials, the university targeted a number of student groups who might need more help with financial aid. Among them are: transfer students with more than $15,000 in debt; students enrolled less than full-time borrowing the maximum on Stafford Loans; incoming students who attend orientation; and first-generation students. The hope is that the university can work with the target students and help them keep costs down.
‘Some of them are advising their parents’
Professor Paul Gregg is the assistant chair and director for the Department of Finance at UCF. He teaches four finance courses, including the popular sophomore-level Personal Finance and Investments (FIN 2100). While teaching some 1,000 students each year, he’s learned his class goes far beyond a college credit.
“I’m teaching a life skill they desperately need,” said Gregg, who estimates some 12,000 students, two-thirds of them non-business majors, have taken his course. “It’s A to Z all they need to know to manage their financial future.”
Which sometimes makes the retired CFO’s class the first lesson some students get in financial literacy.
“From my corporate background, I saw a need to improve the financial literacy skills of our workforce,” he said. “This class is applicable to every aspect of their lives. It became very popular and just grew from there.”
What he found is that many students don’t understand how debt works, or how quickly you can find yourself with too much of it.
“Personal finance is actually microeconomics for the individual,” said Gregg, whose course covers student-loan debt, 401(k) strategies, stocks and bonds, real estate and retirement. “The (lending) system is geared to give people more rope than they need which is unnecessary. Once they take my class, some of them start advising their parents.”
Gregg said that as far as student loans, he gives them this advice: “Student debt is available regardless of your major. However, it takes income to repay debt, and the starting salaries of each major can vary materially. Thus, avoid debt if possible, and if you do have to borrow, never borrow more than half of your starting salary.”
Never Take On More Debt Than You Need
Keaton, Gregg and others say one of the biggest concerns they have about students taking on debt is that if they don’t understand that financial aid has limits, they might run out of money before they graduate. The overall maximum a dependent undergraduate student can borrow toward a four-year degree is $31,000, said Keaton. Independent undergrads can borrow more, up to $57,500.
“I see students who take out the maximum in financial assistance at, say, their community college, and then they realize they’re not eligible for more by senior year,” she said. “There are limits to how much you can borrow.”
Al Jonnas Alday graduated this summer with a bachelor’s degree in business administration. At 32, the native of the Philippines worked full-time, lived with his parents in Orlando and only used the financial aid he needed.
He’s graduating with $11,000 in debt.
“I think the best way (to keep debt low) is to take advantage of community college,” he said, which helped him keep down the cost of his first two years of college.
After that, he said, get information. Many students can qualify for things like scholarships, grants and other assistance.
‘Tremendous Support at UCF’
Hieu Pham, 22, of Orlando graduated this summer in electrical engineering with about $6,000 in student loans. As a transfer to UCF in his sophomore year, he took advantage of tuition scholarships granted through ROTC.
“The ROTC offered scholarships for electrical engineering students at UCF. I competed for the scholarships and I got one,” he said. “It was a huge relief for me.”
He is now a lieutenant in the Air Force stationed at Lackland AFB in Texas. He’s grateful his debt is so small.
“I can look ahead to my future and not worry,” said Pham. “UCF was good to me. And I’m relieved I could finish with very little to pay back.”