Consumers to spend record amounts on college essentials this year

With the fall semester beginning, Americans are stocking up on college essentials. But this year, prices for everything, from electronics to furniture and even clothing, have skyrocketed thanks to stubborn inflation.

According to the National Retail Federation’s annual Back-to-class Consumer Trends survey,  consumers are expected to spend a record $94 billion in college essentials — about $20 billion more than last year. This, coupled with higher tuition costs, have many resorting to alternatives, like buy now, pay later loans and credit cards to cope with increasing costs.

Inflation driving up the cost for college school supplies this year

Inflation may be cooling down, but Americans are still feeling the pinch. In a recent survey by the National Retail Federation, 67 percent of respondents noticed higher sticker prices on back to college essentials. On average, households expect to spend $1,367 on supplies this year — roughly 40 percent more than before the pandemic.

When it comes to college supplies, some of the most popular categories for shoppers are electronics (68 percent), dorm and apartment furnishings (61 percent), and clothing and accessories (86 percent). These, however, are also some of the categories where most consumers have experienced sticker shock this year.

As seen on the chart above, clothing and footwear are the areas where most shoppers have reported an increase — and rightly so. According to YCharts analysis, the inflation rate for clothing and footwear in the U.S. is currently at 2.70 percent. Although that’s much lower compared to last year, it’s still much higher than the long-term average, which is 0.08 percent.

How the economy is impacting college essential shopping behaviors

Consumers are changing their shopping patterns in hopes of stretching their dollars as much as possible. Many are comparing prices online, timing their purchases to align with sales and swapping name brands for store brands.

A shift in shopping behaviors isn’t enough for many to be able to afford the items needed to go back to college. As much as 45 percent of consumers plan on taking additional debt in the form of buy now, pay later loans, credit cards and other forms of borrowing. A great percentage also reported cutting back on other areas (39 percent) and working overtime (22 percent) to afford back-to-class items.

Tips to save money on your college shopping list

If you’re working with a tight budget, it may be hard to get all the items you need without any financing. That said, there are some options you can explore to reduce how much you spend, as well as how much you’ll need to borrow.

• Apply to as many grants and scholarships as possible. Grants and scholarships are sources of gift aid, meaning you don’t have to repay them. Both can be used to pay tuition and required fees, room and board and course materials like books and electronics.
• Take advantage of your student status. Many retailers — including apparel and electronic stores — offer additional discounts to students for showing their ID or course schedule.
• Change your shopping behaviors. Like the survey respondents, you could maximize your savings by using coupons, timing your purchases and switching to generic items. Likewise, thrifting items like clothes, shoes, furniture and appliances is much cheaper than just buying new. In some cases, it may even be free.
• Roll some of these costs into your student loans. If you need to borrow money to pay for these items, student loans should be one of your first alternatives. Student loans tend to have much lower interest rates than credit cards and other unsecured loans. That said, make sure you understand the ins and outs of student loans before you take this route. Borrowing too much can have negative consequences on your credit and finances that could haunt you for years to come.

The bottom line

Stubborn inflation is making shopping for college essentials more challenging this year. However, you can still get what you need while keeping costs at bay by making more conscious choices when you shop.