I have a different take here.
1. Campus environment
2. Theft is a big concern
3. Short 5 mile commute
These three things point to a crap-frame that ideally would appear under the radar. But you still want decent components. Rather than Craigslist for your first bike, I'd recommend looking at a few LBS's. They usually have trade-ins, or other used bikes that can be worked over. Then you'd get the correct frame size and set-up well under your budget. You may even have room for an additional nicer bike for longer recreational rides.