After a big jump last year, discretionary spending by college students is expected to remain largely flat this year at $117 billion, per the latest College Explorer report from re:fuel. That remains significantly above discretionary spending power from 2009-2011, though, which stood at roughly $90 billion. Factoring in $287 billion in non-discretionary spending (on items such as room and board, tuition), the total college market’s spending power is estimated to be $404 billion this year, down only slightly from last year’s $409 billion.
So where’s all that money going? Food accounts for a sizable share of discretionary spending: this year, college students will spend a projected $42.1 billion on food, or 36% of their overall discretionary budgets. Their next-largest expenses will be:
- Automotive ($17.5 billion);
- Clothing and shoes ($13.1 billion);
- Cellphone/smartphone ($9.8 billion);
- Entertainment ($8.7 billion);
- Technology ($8.6 billion);
- Personal care products ($7.6 billion); and
- Cosmetics ($4.9 billion).
Students won’t be spending much on collective buying services such as LivingSocial or Groupon, though. This year, only 39% report subscribing to such a service (down from 45% last year), they expect to spend an average of $42 per month through these services, down from $55 last year.
Interestingly, in constant (2013) dollars, the amount of money tabbed for tuition/room and board, rent/mortgage and class materials is down this year to a combined $13,178 per student, from about $13,400 last year and almost $14,500 the year before.
That may be leading more students to believe that college is worth it as a financial investment, with 70% this year feeling that college will pay them back financially in the long run, up from 64% last year. (About 3 in 4 students believe that it will take them less than 10 years to pay off their debt.)
Still, this year’s respondents feel that they’ll have more debt when they leave college than last year’s crop. On average, they expect to leave with slightly less than $17,000 in debt, up from $16,388 last year.
Students have also become more reliant on scholarships and other financial aid. This year, they said that roughly one-third of their tuition, room and board, and class materials would be paid for by scholarships, stipends, and financial aid, up from 26% in 2003. Only 22% of those costs would be financed by their own money, down from 28% a decade ago.
About the Data: The data is based on a survey of 1,528 college students between the ages of 18-34 interviewed online between January 29 and February 5, 2013. The survey was executed by Crux Research Inc. and its sample is a national representation across all college segments.