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College Student Spending Habits for 2021

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The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

College students face a crucial point in their financial lives—it’s the time where most take out student loans and apply for their first credit cards. Very often, they graduate with the burden of debt.

The cost of college has increased 135 percent in the past 10 years for public four-year universities according to the College Board. On top of that, college students face a diverse set of personal obstacles that affect their finances since they vary greatly in age and life experience. While some students are fresh out of high school, others are returning to school after having a child or serving in the military.

The average student spends a lot of money trying to get their degree. Our guide is refreshed for 2021 to reflect the ways things like spending habits and spending power fluctuate over the years. Before diving into college student spending habits, we’ll first take a look at this group’s overall spending power.

College Student Spending Power 

College students had $376 billion in spending power in 2019. The 21.4 million college students in the country earn money in a variety of ways. Most college students make some sort of financial contribution to their education and many pick up jobs to cover these costs. Take a look at the stats below to see how college students earn their money. 

  • College students had $376 billion in spending power in 2019. [Source: Refuel Agency]
  • 67 percent of millennial college students received $2,000 or less from their parents each year in 2020. [Source: OppLoans]
  • 44 percent of millennial college students worked every year they were in school in 2020. [Source: OppLoans]
  • 86 percent of millennial college students worked summer jobs in 2020. [Source: OppLoans]
  • 65 percent of millennial college students had to take out student loans to pay for their degree in 2020. [Source: OppLoans]
  • 74 percent of millennial college students contributed to funding their education in 2020. [Source: OppLoans]
  • U.S. households planned to spend around $1,059.20 on back-to-school shopping for college students in 2020. [Source: NRF]

How Much Do College Students Spend on Food?

College students spent a total of $39.6 billion on food alone in 2020. Food costs range from groceries and coffee to eating out. There are several reasons why college students spend so much on food. 

The rise of social media and the need to purchase things for status are a couple factors that encourage students to splurge on Instagram-worthy food when they really shouldn’t. Other reasons include using food as an excuse to socialize or to take breaks from studying. Read on to see how college students spend on food.

  • College students spent $39.6 billion on food alone in 2020. [Source: Refuel Agency]
  • For back-to-school shopping among college students, individual students expected to spend $111.32 on food items in 2020. [Source: Statista]

  • For millennial college students receiving spending money from their parents, 76 percent said they mainly spent it on eating out in 2020. [Source: OppLoans]
  • 53 percent of millennial college students who received spending money from their parents in 2020 said they spent it on drinks and snacks. [Source: OppLoans]

How Much Do College Students Spend On Books and Supplies?

While the amount of course materials students are purchasing hasn’t changed, the cost of them is on the downward trend thanks to more affordable options like renting and digital copies. Read on to see different highlights of college student spending on course materials.

Course Material and Supply Costs

College textbooks vary in price, but can cost a small fortune depending on the degree. Some students go to extreme lengths to afford their textbooks including skipping meals and skipping trips home. Below are the different costs college students face when purchasing course materials and other supplies.

  • For the 2019-2020 academic school year, college students spent $413 on average on required course materials and supplies. [Source: On Campus Research]
  • The $413 average spent on course materials for the 2019-2020 school year indicates a 41 percent decrease since 2007, when the average was $701. [Source: On Campus Research]
  • For the 2019-2020 academic school year, college students spent around $47 per class on required course materials. [Source: On Campus Public Research]
  • The amount college students spent on required course materials for the 2019-2020 academic school year decreased by 6 percent since the 2018-2019 school year. [Source: On Campus Public Research]
  • Of all the different categories of spend that college students planned to budget for in 2020, 89 percent reported school supplies as the top category. [Source: National Retail Federation]
  • Students acquired an average of 7.7 required materials for the 2019-2020 academic school year. [Source: On Campus Research]
  • 30 percent of students said they spent more money on textbooks in 2019 as compared to what they spent in 2018, while 28 percent said they spent about the same. [Source: FlatWorld Knowledge]
  • 40 percent of students chose not to purchase at least one of their assigned textbooks due to its high cost. [Source: FlatWorld Knowledge]

Types of Materials and Where They’re Buying

College students are frugal when considering where they’ll buy course materials and what types of course materials they purchase. Some options, like renting or buying digital books, save a lot but come with their own drawbacks. Read on to see how college students differ when deciding what materials to get and where to buy them.

  • 26 percent of college students used free methods to obtain course materials in 2020. [Source: On Campus Research]
  • Of all course materials college students purchased in 2020, 54 percent were bought from a campus store. [Source: On Campus Research]
  • 49 percent of students opted to purchase used textbooks instead of buying them new in 2019. [Source: FlatWorld Knowledge]
  • 31 percent of students purchased a combination of used and new textbooks in 2019.  [Source: FlatWorld Knowledge]
  • 47 percent of students who purchased at least one used textbook in 2019 said they chose an older version of it for the sake of affordability. [Source: FlatWorld Knowledge]
  • 29 percent of students said they only bought one digital version of an assigned textbook in 2019. [Source: FlatWorld Knowledge]
  • 30 percent of students said they didn’t buy any digital versions of their assigned textbooks in 2019. [Source: FlatWorld Knowledge]
  • 65 percent of students who opted for digital textbooks purchased them individually, while 29 percent reported purchasing them through a subscription in 2019. [Source: FlatWorld Knowledge]
  • 58 percent of students bought at least one assigned textbook on Amazon in 2019. [Source: FlatWorld Knowledge]
  • 51 percent of students said they bought at least one of their assigned textbooks at their campus bookstore in 2019. [Source: FlatWorld Knowledge]
  • Only 17 percent of students made online textbook purchases directly from the publisher in 2019. [Source: FlatWorld Knowledge]
  • 30 percent of students said at least one of the textbooks they purchased online was not from Amazon in 2019. [Source: FlatWorld Knowledge]

How Much Do College Students Spend on Clothing and Personal Care?

College students spent a combined $9.5 billion on clothing and accessories in 2019. The rising trend of natural, eco-friendly products is one factor that is possibly driving purchases up in this sector. Take a look at the stats below to learn how much money college students sacrifice for clothing and personal care.

  • College students anticipated spending a combined $67.7 billion for the 2020 school year on clothing and accessories, food, electronics, personal care items, and furniture. [Source: Statista]
  • Individual college students anticipated spending around $148.37 on clothing and accessories for the 2020 school year. [Source: Statista]
  • Individual college students anticipated spending around $64.91 on collegiate branded clothing and accessories for the 2020 school year. [Source: Statista]
  • 59 percent of millennial college students who received spending money from their parents said they would primarily spend it on clothes in 2019. [Source: OppLoans]
college students planned to spend $235 on electronics, $148 on clothes and accessories, $120 on furniture and $65 on collegiate branded gear for the 2019–2020 back-to-school season.

Take a look at what individual college students planned to spend during the 2019-2020 back-to-school shopping season:

  • Electronics: $234.69
  • Clothes and Accessories: $148.37
  • Furniture: $120.19
  • Collegiate Branded Gear: $64.91

How Much Do College Students Spend on Rent and Transportation?

College students spend an average of $11,140 on living accommodations and $2,800 on transportation over the course of their time in school. The cost of rent, room and board, and transportation for college students depends greatly on where they attend. Costs can greatly differ between in-state and out-of-state colleges and between private and public colleges. Learn more about how these costs differ and how much students pay for rent and transportation alone.

  • Students pay an average of $11,140 for room and board at a public four-year university. [Source: Credible]
  • Students pay an average of $12,680 for room and board at a private four-year university.[Source: Credible]
  • College students spend an average of $2,800 on transportation during their time in school. 
  • Around seven to 12 percent of the total U.S. rental housing market is taken up by student housing rentals. [Source: NHMC Research Foundation]
  • The average cost of rent for student housing is $637 per month. [Source: NHMC Research Foundation]
  • Students will spend an average of $1,050 to $1,800 on transportation costs alone annually. [Source: College Board via Edmit]
  • College students planned to spend an average of $129.76 on dorm or apartment furnishings in 2020. [Source: National Retail Federation]

  • More than 70 percent of college students say the high cost of living is their main concern at school. [Source: Chegg]
  • The cost of living for college students varies greatly based on location: New York University’s room and board costs for 2020 are around $19,244 per year, compared to $10,196 per year at University of Nebraska Omaha. [Source: Credible]

Typical College Student Budget

While the exact details of every college student’s budget are different based on where they attend school and the costs of living associated with different locations, there are some trends in the main categories of spend. The main cost difference is found in tuition, which is more than double for out-of-state students compared to in-state students. Learn more about the different budget trends for students attending college in-state and those attending out-of-state for the 2020-2021 academic school year. [Source: Statista]

Yearly Budget for College Students: In-State

  • Tuition and fees: $10,560
  • Room and board: $11,620
  • Books and supplies: $1,240
  • Transportation: $1,230
  • Other expenses: $2,170

Yearly Budget for College Students: Out-of-State

  • Tuition and fees: $27,020
  • Room and board: $11,620
  • Books and supplies: $1,240
  • Transportation: $1,230
  • Other expenses: $2,170

College Student Debt

Student loan debt is at the forefront of the news and many outlets are reporting on the struggles millennials, baby boomers and everyone in between face. Other everyday costs like food and housing also contribute to the list of expenses college students need to cover while taking classes.

We found that most Americans would rather attend an affordable college than a highly ranked school. This shows that college students are highly aware of the costs of attending college and the financial sacrifices they may need to make. Read on to learn about the impact of college student debt.

Student Stress and Debt

Students feel a lot of stress from their finances. Many students feel the pressure of piling debt and many cite financial stress as even more impactful than stress felt from academics. To get a better idea of these stressors, take a look at the stats below.

  • Student loan debt has reached over $1.67 trillion as of August 2020. [Source: Bankrate]
  • The total student loan debt is higher in 2020 than it was in 2019, when it averaged $1.598 trillion. [Source: Credible]
  • College students carried an average student loan debt of $33,654 individually in 2019. [Source: Credible]
  • College students paid an average of $393 per month towards student loans in 2019. [Source: Credible]
  • There were 43 million student loan borrowers in 2019. [Source: Credible]
  • 2.8 million students who borrowed loans in 2019 owe $100,000 or more. [Source: Credible]
  • 67 percent of students said that finding a job that provided them with financial security was a primary concern in 2019. [Source: Chegg]
  • For every five students, four report the high cost of education as the primary issue impacting them in 2019. [Source: Chegg]
  • Over 50 percent of students said mental health was a primary concern throughout school in 2019 due to financial strain and academic pressure. [Source: Chegg]
  • Women hold nearly two-thirds of student debt in the country, totalling nearly $929 billion in 2020. [Source: AAUW]
  • First-generation college students are burdened with more debt when they graduate in 2020.  [Source: AAUW]
  • The cost of a college education has increased by 103 percent since 1987.  [Source: AAUW]

Family Sacrifices

College debt often causes stress not just for students, but for their families as well. Many parents choose to sacrifice things like recreation and retirement to financially support their children. Take a look below at all of the ways debt also impacts families.

  • 91 percent of millennial college students said they spent money responsibly in 2019, but 29 percent of their parents disagreed. [Source: OppLoans]
  • For millennial college students who received spending money from their parents in 2019, 45 percent report spending it “very responsibly,” but just 18 percent believed their parents would agree. [Source: OppLoans]
  • 51 percent of students’ parents anticipated increasing the amount they spent on virtual learning tools for their kids in 2020. [Source: PR Newswire via Deloitte]
  • 50 percent of low income families are worried about their ability to afford upcoming tuition payments in 2020, compared to 30 percent of families overall. [Source: PR Newswire via Deloitte]

  • 52 percent of families had a plan for how they’d pay for their kids’ college tuition for the 2019-2020 academic school year. [Source: Sallie Mae]
  • Around $30,017 was spent by families on college for the 2019-2020 academic school year. [Source: Sallie Mae]
  • 44 percent of college costs were paid from parents’ income and savings in 2020. [Source: Sallie Mae]
  • 8 percent of college costs were paid with borrowed money by parents in 2020. [Source: Sallie Mae]
  • 20 percent of parents borrowed money to cover their kids’ tuition in 2020. [Source: Sallie Mae]

The financial choices college students make can follow them for years after graduation. We’re all aware of the student loan crisis, but other financial decisions like late payments and maxed out cards can also take a significant toll if not immediately addressed. It can get particularly overwhelming if you haven’t checked your credit report in a while and feel unsure about what’s on it.

You should regularly check your credit report to ensure all of your information is accurate and fairly reported. If you need help tackling negative items you find on your credit report, you can get in touch with the team at Lexington Law to learn about how credit repair might be able to help clean up your credit report.

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Does Getting Joint Credit Cards Have an Impact on Both Spouses’ Credit?

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While marriage can help you improve your financial situation, it does not automatically mean that you and your spouse will share a credit report. Your credit records will remain separate, and any joint accounts or joint loans that you open will appear on both of your reports. While this can be advantageous, it’s critical to remember that joint account activity can effect both of your credit scores positively or negatively, just as separate accounts do.

Users Who Are Authorized

An authorized user is a user who has been added to an existing credit account and has been granted the authority to make purchases. Authorized users are typically issued a card bearing their name, and any purchases made by them will appear on your statement. The primary distinction between an authorized user and a shared account owner is that the account’s original owner is solely responsible for debt repayment. Authorized users, on the other hand, can always opt-out of their authorized status, although the principal joint account owner cannot.

If your credit score is better than your spouse’s as an authorized user, he or she may benefit from a credit score raise upon account addition. This is contingent upon your creditor notifying the credit bureaus of permitted user activity. If your lender does report authorized users, the activity on your account may have an effect on both you and your spouse. However, some lenders report only positive authorized user information, which means that late payment or poor usage may not have a negative effect on someone else’s credit. Consult your lender to determine how authorized users on your account are treated.

Joint Credit Cards Have an Impact on Your Credit Score

Opening a joint credit account or obtaining joint financing binds both of you legally to the debt’s repayment. This is critical to remember if you divorce or separate and your spouse refuses to make payments, even if previously agreed upon. It makes no difference who is “responsible,” the shared duty will result in both partners’ credit histories being badly impacted by late payments. Regardless of changes in relationship status or divorce order, the creditor considers both parties to be liable for the debt until the account is paid in full.

Accounts Individuals

Whether you’re happily married or divorced, you and your spouse may decide to open separate credit accounts. Most creditors will enable you to transfer an account that was previously joint to one of your names if both of you agree. However, if there is a debt on the account, your lender may refuse to remove your spouse’s name unless you can qualify for the same credit on your own. Depending on your financial status, qualifying for financing and credit on a single income may be tough.

Considerations

While creating the majority of your accounts jointly with your spouse may make it easier to obtain financing (two salaries are preferable to one), reestablishing credit independently following a divorce or separation is not always straightforward. To make matters worse, your spouse may wind up causing significant damage to your credit rating following the separation, either intentionally or through irresponsibility – making the financial situation much more difficult.

Before you rush in and open accounts with your spouse, take some time to discuss the shared responsibility of these accounts and what you and your husband would do in the event of a worst-case situation. These types of financial discussions can be difficult, especially when you rely on items lasting a long time, but a mutual understanding and respect for each other’s credit can go a long way toward keeping your score when sharing an account.

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Should you pay down debt or save for retirement?

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While establishing a comprehensive, workable budget is undeniably one of the most important factors in maintaining a healthy financial life, it can also be one of the most difficult. For those who are struggling with personal debt, building a budget can be particularly challenging. When the money coming in has to stretch like a contortionist to cover expenses, it can be hard to determine where to focus — and where to trim.

Sometimes, the battle of the budget can come down to a choice between dealing with the present — and thinking about the future. When your income is running out of stretch, do you pay off your existing debt, or do you start saving for retirement? At the end of the day, the solution to that particular dilemma depends on the type of debt you have and how far you are from retiring.

If you have high-interest debt, pay it down

When considering how to allocate your budget, it’s important to understand the different kinds of debt you may have. Consumer debt can be categorized into two basic types: low-interest debt and high-interest debt, each with its own impact on your credit (and your budget).

In general, low-interest debt consists of long-term or secured loans that carry a single-digit interest rate, such as a mortgage or auto loan. Though no debt is the only real form of good debt, low-interest debt can be useful to carry. For instance, purchasing a home with a low-interest mortgage can actually save you money on housing costs if you do your homework and buy a house well within your price range.

High-interest debt, on the other hand, typically has a hefty double-digit interest rate and shorter loan terms, such as that of a credit card or payday loan. High-interest debt is the most expensive kind of debt to carry from month to month and should always be priority number one when building a budget.

To illustrate why you should focus on high-interest debt above everything else, consider a credit card carrying the average 19% APR and a $10,000 balance. If the balance goes unpaid, that high-interest credit card debt will cost $1,900 a year in interest payments alone. Now, compare that to the stock market’s average annual return of 7%, and it becomes clear that you’ll see significantly more bang for your buck by putting any extra funds into your high-interest debt instead of an investment account.

If you are having trouble paying off your high-interest debt, there may be some steps you can take to make it more manageable. For example, transferring your credit card balances from high-interest cards to ones offering an introductory 0% APR can eliminate interest payments for 12 months or more. While many of the best balance transfer cards won’t charge you an annual fee, they may charge a balance transfer fee, so do your research. You’ll also want to make sure you have a plan to pay off the new card before your introductory period ends.

Most balance transfer offers will require you to have at least fair credit, so if your credit score needs some work, you may not qualify. In this case, refinancing your high-interest debt with a personal loan that has a lower interest rate may be your best bet. Make sure to compare all of the top bad credit loans to find the best interest rate and loan terms.

If you’re nearing retirement, start to save

The closer you get to retirement age, the more important it becomes to ensure you have adequate retirement savings — and the more pressure you may feel to invest every spare penny into your retirement fund. No matter your age, however, paying off your high-interest debt should always remain the priority, as it will always provide the best rate of return (as well as likely provide a credit score boost).

Indeed, no matter how tempting it becomes, you should avoid reallocating money you’ve dedicated to paying off high-interest debt to save for retirement. Instead, the focus should be on re-evaluating your budget to find any additional savings you can. To be successful, you will need to make a strong distinction between want and need — and, perhaps, make some tough lifestyle choices.

Though simply eliminating your daily coffee drink won’t magically provide a solid retirement fund, saving a few bucks by homebrewing while also eliminating a pricey cable bill in favor of an inexpensive streaming service — or, better yet, free library rentals — can add up to big savings over the course of the year. The ideal strategy will involve overhauling every aspect of your lifestyle, combining both large and small cuts to develop a lean budget structured around your long-term goals.

Of course, while you should never allocate debt money to your retirement savings, the reverse is also true. It is almost always a horrible idea to remove money from your retirement account before you hit retirement age — for any reason. Withdrawing early means you will be stuck paying hefty fees for withdrawing money early and, depending on the type of account, you may also have to pay significant taxes.

Aim for both goals by improving income

As you take the necessary steps to pay off debt and save for retirement, you may have already stretched the budget so thin it’s practically transparent. In this case, it is time to consider ways to improve your overall income. Increasing the amount you have coming in not only provides extra savings to put toward your retirement, but may also speed up your journey to becoming debt-free.

The easiest solution may be to look for ways to increase your income through your current job; think about taking on additional shifts or overtime hours to earn some extra cash. Depending on your position — and the time you’ve been with the company — consider asking for a pay raise or promotion, as well.

If you do not have options to make more money at your day job, it may be time to find a second job. Look for opportunities that provide flexible schedules that will accommodate your regular job; many work-from-home positions, for example, can easily fit into most work schedules. Doing neighborhood odd jobs, such as babysitting and dog walking, may also provide a solid income boost without interfering with your existing job.

For some, the need to pay off debt and improve retirement savings can be more than just a source of stress — but a hidden opportunity to begin a new career adventure. Instead of being weighed down by yet more work, use the desire to better your budget as a reason to explore the profit potential of a passion or hobby. Starting a small online store, part-time consulting service, or other small business can be a great way to improve your income and your overall happiness.

While it may sound intimidating, starting a side business can be as simple as putting together a professional looking website and doing a little marketing legwork to spread the word. And no, building a website isn’t as scary — or expensive — as it seems, either. A number of the top website builders now offer simple drag-and-drop interfaces perfect for putting together a professional-looking web page in minutes (without breaking the bank).

Learn how you can start repairing your credit here, and carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.



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How does a loan default affect my credit?

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Nobody takes out a loan expecting to default on it. Despite their best intentions, people sometimes find themselves struggling to pay off their loans. These types of struggles happen for many reasons, including job loss, significant debt, or a medical or personal crisis.

Making late payments or having a loan fall into default can add pressure to other personal struggles. Before finding yourself in a desperate situation, understanding how a loan default can impact your credit is necessary to avoid negative consequences.

30 days late

Missing one payment can further lower your credit score. If you can pay the past due amount plus applicable late fees, you may be able to mitigate the damage to your credit, if you make all other payments as expected.

The trouble starts when you (1) miss a payment, (2) do not pay it at all, and (3) continue to miss subsequent payments. If those actions happen, the loan falls into default.

More than 30 days late

Payments that are more than 30 days past due can trigger increasingly serious consequences:

  • The loan default may appear on your credit reports. It will likely lower your credit score, which most creditors and lenders use to review credit applications.
  • You may receive phone calls and letters from creditors demanding payment.
  • If you still do not pay, the account could be sent to collections. The debt collector seeks payment from you, sometimes using aggressive measures.

Then, the collection account can remain on your credit report for up to seven years. This action can damage your creditworthiness for future loan or credit card applications. Also, it may be a deciding factor when obtaining basic necessities, such as utilities or a mobile phone.

Other ways a default can hurt you

Hurting your credit score is reason enough to avoid a loan default. Some of the other actions creditors can take to collect payment or claim collateral are also quite serious:

  • If you default on a car loan, the creditor can repossess your car.
  • If you default on a mortgage, you could be forced to foreclose on your home.
  • In some cases, you could be sued for payment and have a court judgment entered against you.
  • You could face bankruptcy.

Any of these additional consequences can plague your credit score for years and hinder your efforts to secure your financial future.

How to avoid a loan default

Your options to avoid a loan default depend upon the type of loan you have and the nature of your personal circumstances. For example:

  • For student loans, research deferment or forbearance options. Both options permit you to temporarily stop making payments or pay a lesser amount per month.
  • For a mortgage, ask the lender if a loan modification is available. Changing the loan from an adjustable rate to a fixed rate, or extend the life of the loan so your monthly payments are smaller.

Generally, you can avoid a loan default by exercising common sense: buy only what you need and can afford, keep a steady job that earns enough income to cover your expenses, and keep the rest of your debts low.

Clean up your credit

The hard reality is that defaulting on a loan is unpleasant. It can negatively affect your credit profile for years. Through patience and perseverance, you can repair the damage to your credit and improve your standing over time.

Consulting with a credit repair law firm can help you address these issues and get your credit back on track. At Lexington Law, we offer a free credit report summary and consultation. Call us today at 1-855-255-0139.

You can also carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.



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