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College Student Spending Behavior

By all accounts, the cost of college has risen dramatically in the past 15 years. Prices for tuition, fees, and books have risen by 5 to 10% (and sometimes more) annually for years. Prices of colleges vary, depending on the type of school a student attends (private/public, two year, four year). According to the College Board, students can expect to pay between $231 and $1,114 more in tuition and fees this year, on average, than last year. The average cost for college tuition, room, board and other expenses ranges from: $10,367 for a two-year community college to $17,740 for a public four year college to $26,070 for a private four year college (Source: American Council on Education, 2004). As these costs have risen, an equally dramatic rise in the availability of grants, aid and loans has made college much more affordable than most news articles would lead you to believe. Nearly a third of all students pay less than $4,000 per year for tuition and fees, and nearly 70% pay less than $8,000 (Source: The College Board, 2004).

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College Student Spending Behavior Financial aid and grants are available to more students than ever before. Most full time students receive financial aid (72%), grant funding (59%) and/or a loan (45%) to offset the cost of college. Experts estimate that students pay about one-third of the actual costs of a college education. The following chart shows the average aid package for a full time student in 1999-2000 (the most recent year that data was available):

Average Aid for Full Time Students

$10,000 $8,000 $6,000 $4,000 $2,000 $Financial Aid Grants Loans $4,949 $8,474 $5,473

(Source: American Council on Education) We have also found that today’s students have more discretionary income than ever before. Different studies report that students have between $600 and $1,100 a month in...