Average UCF student loan debt about $19,356

Graduating from college may be the ultimate dream for students and their families, but the debt they incurred during their time in classes can make life after college a nightmare. Student loans are becoming an increasingly popular avenue for students to gain easy access to money for school, but the consequences may last longer than expected.

Two-thirds of college seniors graduated with debt in 2010, according to a report by the Project on Student Debt, an initiative of the Institute for College Access & Success, a nonprofit research organization. The average debt for those graduates was $25,250, a 5 percent increase from the previous year.

According to the 2012-2013 university work plan, 49 percent of UCF’s undergraduate students graduate without any debt. For the 2011-2012 academic year, the average debt is estimated to be $19,356 for UCF undergraduates.

Jason Martin, a portfolio manager for Allgen Financial Services, a financial and investment management firm based in Orlando, has witnessed the devastation that debt can do on the clients that come into his office. He often advises people in their 50s or 60s who are still holding on to their student loan debt that they incurred decades ago, he said. One recent graduate broke down in tears when confronted with his debt of $138,000. Although Martin said that’s one of the worst cases, the problem cannot be underestimated.

“To me, it’s the biggest financial epidemic in America,” he said.

In the third fiscal quarter of 2011, student loan debt rocketed to $870 billion, surpassing the national credit card debt of $693 billion. Last year, the amount of student loan debt soared to more than $1 trillion, according to the Consumer Financial Protection Bureau. Martin adds that students can’t get out of school loans through bankruptcy, making them more crippling than credit card debt.

“I’ve seen it destroy people, marriages. … It’s the only debt you can’t get out of,” he said.

Martin believes that the ease and accessibility of loans makes them too tempting for most college students. They’re supposed to be used on your education, but in reality, Martin said, they can be blown on anything.

“Society tells you that you can’t get a degree unless you get a student loan. We’ve been conditioned,” he said. “And once you get it, it’s hard not to use it.”

Daniel Georginow, a senior majoring in legal studies, took out his first student loan in the spring of 2011, his sophomore year. He plans on taking out more next semester, partly because his younger brother will enter college in the fall.

“My parents just can’t afford sending all of us to school on the same dime,” he said.

He anticipates having around $15,000 of debt by the time he graduates in two years. As far as paying the loans back, as long as he has a steady job, he’s not worried.

“Having a college education is worth having student loans for a while,” he said. “Nothing can compare to the quality of a college education, even if you have to borrow money. … It’s a legitimate way to pay for college, in my opinion.”

In Florida, the Project on Student Debt reported that the average debt was $21,184, placing the state 37th in the country. Florida also ranked 32nd in percentage of students with debt, with 49 percent.

Martin graduated from UCF in 1999 with a degree in business administration and never took out a student loan, instead having his schooling paid by FedEx, where he worked. In addition to finding companies that will help pay for your school, he advocates looking for scholarships and reducing classes instead of taking out loans. He recommends students try going to community colleges and take fewer classes a semester, even if it means delaying holding a diploma.

“Look for your scholarships like it’s a second job. There are multiple ways to reduce your dependency on loans and financial aid. I would advocate not even thinking about [student loans] as an option,” he said.

Cameron Yeager, a senior studying information technology, has depended on loans since his freshman year in 2008 when he borrowed $10,000. Since then, he’s borrowed between $2,000 and $3,000 every year in federal Stafford loans. Half, he said, was subsidized, meaning he will not be charged interest until he graduates and begins paying the loan, while the other half was unsubsidized.

“I wouldn’t recommend it, but they’ve worked until now. I don’t know how bad it’s gonna be for when I pay it back,” Yeager said.

After he graduates next spring, he expects to owe at least $25,000.

“I fell right in the middle so I was not quite smart enough to get the scholarships and not poor enough to get grants. … That’s the one area that’s not covered by any type of aid,” he said.

Yeager hoped to receive a Pell Grant from UCF this past year after he filled out his Free Application for Federal Student Aid, or FAFSA, form, but never did. UCF awards up to $2,750 per semester in Pell Grants based on certain information students submit through their FAFSA, such as their family’s annual income.