SPENDING LOWDOWN
College is a huge investment in a student’s educational journey, but it’s also a huge financial decision to make. Over the last two decades, the net price of tuition, fees, room and board at a public college (for a standard period of four years) has increased by a massive 68%, according to research published by the College Board.
At the same time, money borrowed by students in order to attend college has doubled – adding to an ever-growing collective federal student loan debt of around $1.6 trillion dollars, as told by the Federal Reserve Bank of New York.
Student Beans’ own research reveals that 84% of 16-24s want President Biden to focus his attention on student loan forgiveness. We’ve also learnt that 85% of students are feeling stressed, 71% worried, and 52% helpless about paying back their student debt.
Given their financial circumstances, it’s not surprising that over the summer period, 42% of students plan to work part-time and 36% plan to work full-time to earn themselves some extra disposable income. Receiving income from work, family and, in some cases, student loan, means that the average student has an annual income of $30,364. What’s more, 60% of their spending goes towards non-essential items.
They might have a decent amount of disposable income, but with worries about paying off their student debt, Gen Z students are incredibly financially-savvy and are more likely than any other generation to look for the best deals when it comes to
making purchases.
How do you feel about paying back your student debt?
(tick all that apply)
Do you expect to work during the summer holidays in 2022?
- 36% Yes, I plan to work full time
- 42% Yes, I plan to work part time
- 10% I’ll look for a paid internship
- 4% I plan to volunteer (unpaid)
- 8% No
“I would say pricing is my top priority when buying summer items because I’m still trying to stay on a budget. Also quality, convenience and style.”
Kenia, Animation and Media student from Arizona
Summer spending – the facts and figures
With no classes or studies to commit to over the summer break, students are way more likely to take on more shifts and increase their income – and the majority of students (86%) feel at least fairly confident in managing their finances over this period.
How confident are you about managing your finances during the summer holidays?
Very confident
Fairly confident
Not so confident
Not at all confident
But what exactly are they spending their disposable dollars on?
49% of 16-24s buy new clothes, shoes and accessories for summer and 44% actually look forward to investing in a new summer wardrobe – great news for fashion brands! Food is another sector that students are willing to spend a lot of money on during summer. 22% eat out at restaurants several times a week, and 23% indulge in takeout. Just under half of students are eating out at restaurants and getting takeout at least once a week.
As mentioned, travel is expected to contribute to a lot of student’s spending this summer, as well as events and activities. Animation and Media student, Kenia, explains: “Staycations are roughly a $500 budget for me. For bigger vacations, that would be around a grand or more because there’s the flights, the accommodation, the tickets for activities like a theme park or something, and then food.”
This year, what students need and what they want are intertwined. Reclaiming their summer and releasing their pent-up demand will mean wanting to invest more in simply enjoying themselves.
