How are college students spending their money?

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College has long been associated with late-night study sessions, instant noodles, and tight budgets. But in 2025, the cost of higher education has climbed to unprecedented heights, and students are navigating these expenses with a mix of hustle, planning, and sacrifice.

According to recent findings from the Education Data Initiative, the average annual cost of college in the U.S.—including tuition, fees, room, board, books, and living expenses—totals $38,270 per student.

For many, this figure is only part of the financial picture, as interest on student loans and loss of potential income can raise the lifetime cost of a bachelor’s degree to more than $500,000.

So how exactly are students managing their money? Let’s take a look at the data.

The cost of college is on the rise

The numbers speak for themselves. For the 2024–25 academic year:

• In-state students at public 4-year institutions spend an average of $27,146 per year (Education Data Initiative).
• Out-of-state students pay roughly $45,708 annually, and private university students living on campus spend up to $58,628 per year. (Education Data Initiative)
• Room and board costs at 4-year institutions average $12,917, making them the second-largest expense after tuition. (Education Data Initiative)
• Textbooks and supplies average $1,220 per year. (Education Data Initiative)
• Additional living expenses such as transportation and personal care can range from $2,800 to $5,000+. (Education Data Initiative)
• Since 2000, average tuition increases have outpaced wage growth by more than 100% (Education Data Initiative).
• 85.2% of new undergraduates borrow money to pay for college, and the average federal student loan debt is $38,375. (Education Data Initiative)
• Students pay an average of $2,636 in interest per year. (Education Data Initiative)
• The total cost of borrowing, when compounded with tuition inflation and lost income, can drive the lifetime cost of a degree above $560,000. (Education Data Initiative)

How students are attempting to spend smarter

1. Apply for scholarships and grants (early)

Many students offset tuition with need-based aid and merit scholarships. About 6 in 10 students who started college in the fall applied for federal financial aid via FAFSA (Education Data Initiative). If you’re looking for financial aid opportunities, it’s not uncommon for smaller or local scholarships to be overlooked. Applying to multiple sources—public, private, and institutional—can significantly reduce out-of-pocket tuition costs.

2. Buy or rent used textbooks

New textbooks can cost hundreds per semester. Instead, use sites like Chegg, Amazon, or your campus bookstore for used or rental options. You can also check for free digital versions via your school library or OpenStax.

3. Use campus resources when you can

Take full advantage of:

• Free printing quotas
• Free fitness centers
• Tutoring services
• Counseling and mental health services

These are often covered by student fees you’ve already paid.

4. Share subscriptions and services with roommates

Split costs with roommates or friends (that you trust) on:

• Streaming services (Spotify, Netflix)
• Food delivery memberships (DoorDash, Uber One)
• Amazon Prime Student

Maybe even split the cost of bulk purchases like snacks, toiletries, or cleaning supplies from warehouse stores (like Costco or Sam’s Club).

5. Avoid using a car, if you can

Owning a car can cost thousands a year. Use public transportation, campus shuttles, biking, or walking whenever possible. Many schools offer free or discounted transit passes.

6. Set up automatic savings transfers

It may seem impossible to save money when you’re already living a frugally as a student, but an emergency fund is always important. There’s a common phrase among financial advisors: set it and forget it. If you have a part-time job or receive financial aid refunds, set up an automatic transfer into a savings account to build emergency funds.

7. Get a campus job with perks

Jobs in dining halls or bookstores sometimes come with free meals, discounts, or other student-friendly benefits. Many college students rely on a job during college. A 2020 survey found that 40% of full-time students and 74% of part-time students had a job. (National Center for Education Statistics)

8. Sell back what you can

At the end of each semester, sell back books, old electronics, or clothes you don’t wear via platforms like Poshmark, Facebook Marketplace, or your school’s student groups.

9. Take advantage of student credit card perks (responsibly)

Student credit cards often come with built-in benefits designed for college users, such as:

• Cash-back on everyday purchases
• No annual fees
• Rewards for good grades
• Introductory APR offers
• Credit-building tools

Many students use credit cards, whether to stretch their budget or to get a head-start on building their credit. A survey found that between 2013 and 2020 there was a 90% increase in the number of students that had a credit card. (WalletHub).

By using a student credit card responsibly, you can build credit history early, which helps with future goals like renting an apartment or qualifying for lower interest rates on loans.

Navigating the cost of higher education

College in 2025 is more expensive than ever, but today’s students are meeting the moment with hustle, discipline, and resourceful spending. Whether it’s living frugally, choosing affordable institutions, or maximizing financial aid, they’re navigating financial challenges with creativity and clarity.

The most important thing is to protect your financial future.

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