How Do College Students Spend Money? (2024)

Sounds simple, but before you can claim your piece of the college market, you need to know how college students spend money.

Like all adults, college students spend money on basic living expenses, like recreation, shopping, food, and getting themselves around town. With more than 21 million students enrolled in U.S. colleges and universities, they spend more than $600 billion a year.

The Education Data Initiative reports that from 1989 to 2016, the cost to attend college has increased eight times greater than wages. Despite the increase in student loan and credit card debt, student spending power only increases.

Companies that seek business from college students first need to understand how students spend their money. As we look at how it all breaks down, keep in mind that this kind of data is constantly being updated.

How Much Does College Cost?

When we look at college spending power, we don’t usually factor in tuition and student housing — but it’s helpful to know. Tuition payments can be a heavy financial burden, and these costs affect how much money students have left for living expenses.

Despite the rising costs of higher education, at least 74% of current college students contribute financially to their education.

According to educationdata.org, the average cost to attend a public university in the US including tuition plus room and board are as follows:

• 4-year in-state: $37,508/year and $102,828 total
• 4-year out-of-state: $109,116/year and $176,056 total
• 2-year in-state: $7,724/year and $31,724 total

The average cost for private school is:

• 4-year nonprofit: $150,564/year and $218,004 total
• 4-year for profit: $72,976/year and $134,112 total
• 2-year nonprofit: $35,936/year and $66,540 total
• 2-year for profit: $31,530/year and $54,492 total

The numbers above include the average cost of course materials, but other kinds of school supplies are listed at the end of the article.

Where’s the Money Coming From?

After seeing those numbers, you might be wondering, where does that $600 billion in spending power come from? If you think parents are footing the bill, you might be surprised.

Around 51% of American college students are financially independent, which leaves 49% who receive funding from their families. This doesn’t mean parents cover all expenses.

Around 67% of students receive less than $2,000 a year in financial support from their families. In 2019, the average college student reported having five credit cards and in 2022, there were nearly 45 million student loan borrowers.

There are misconceptions about the spending habits of college students. Despite the idea that every younger generation has it “easier” than the one that came before, many students work hard and struggle to support themselves. Some also support families of their own.

Here’s what students are saying about their college expenses:

• 4 out of 5 students say they’re affected by the cost of their education
• 70% of college graduates take on a form of student loan and/or credit card debt
• 50% of low-income families are overwhelmed by their inability to pay for education costs
• 70% of enrolled college students are concerned with the cost of student living expenses

In order to meet a monthly budget, most students hold jobs.

• 44% of students have a job throughout the academic year
• 86% of students work during the summer vacation
• More than 25% of students who attend school full-time also work full-time

These financial constraints affect businesses that serve college students. Consider how your products and services benefit student consumers. How accessible is what you’re selling to students from all financial groups?

Show Me the Money!

Okay, but, how are college students spending their money? Despite the cost of higher ed, this population is still wielding incredible spending power every year. Where is all that money going?

Like most aspects of digital marketing, it’s important to follow the data. Here’s the breakdown of college student spending habits in some of the most popular areas: food, retail, and school supplies.

1. Dining Out and Groceries

• College students spend around $40 billion on food every year
• The average college student spends $547/month on groceries
• The average college student spends $342/month on off-campus eating
• In 2020, the average student spent around $4,000/year on eating out
• $100/month of off-campus food spending is on coffee, with $42/month on alcohol
• 1 in 3 students report struggling to afford food

2. Personal Care and Clothes

Other than eating out, the majority of a college student’s spending money goes to clothing, personal care, and electronics not intended for classroom use.

• College students spend around $10 billion on clothing
• 59% of students who receive money from their parents said they would spend it on clothes
• The average college student anticipates spending $158.98 on clothes
• The average college student spends around $270/year on personal care including beauty and skincare services

3. Electronic and School Supplies

Course materials aren’t as big a part of student budgets as they used to be. Since 2007, the amount of money students spend on course materials has decreased 41%.

This is largely due to textbook rental programs and course materials shifting to online formats. Meanwhile, the pandemic forced the majority of college students to attend remotely. This change accounts for the changes in data in this area.

Here are the numbers:

• College students spend around $18 billion on electronics for school
• The average student spends around $306 a year on electronics
• The average cost of course materials in 2019 was around $415
• Students expect to spend approximately $419 a year on technology
• Health and business majors report the highest costs for course materials
• 40% of college students say they didn’t buy a textbook or course material because it was too expensive