U.S. Post-Secondary Students' Spending on IT
0

The research provides an analysis of the US post-secondary students’ spending on IT. As tuition, accommodation, books and food represent the majority of their monthly spending, the IT or technology expense is expected to represent a relatively small portion of college students’ monthly budget. Mobile devices, voice and data contracts, computing&electronic hardware, and internet connectivity are the major expenses in student IT. With the trend of online and remote learning accelerated by COVID-19, the spending on online courses is a key driver of students’ consumption of computing devices and internet connection.

Primary Categories of College Students’ IT Spending

  • Hardware: According to the back-to-college survey by Deloitte, the spending on electronic gadgets&digital subscriptions are estimated to be $2.6 billion (10.2% of total back-to-school spending) while computers&hardware spending is estimated to be $5.6 billion (22% of total back-to-school spending) in 2020; they are similar to the situation in 2019. Note: electronic gadgets include cell phones/smartphones, tablets/e-readers, and wearable devices; digital subscriptions include voice and mobile data plans.
  • Hardware: In the 2018-19 academic year, the moderate annual spending budget of a college student was between $16,730 and $24,980, in which cellphone expense (phones plus contracts) was $600 (2.4%-3.6% of annual budget) and technology expense (laptops, tablets, and other electronic devices) was $1,200 (4.8%-7.2% of annual budget).
    • As the total spending power or budget of college students on everything was likely between $417 billion and $574 billion in 2018, the annual spending on cellphones is estimated to be between $10.01 billion and $20.66 billion (417 billion x 2.4%, 574 billion x 3.6%); the annual spending on computing and other electronic devices except cellphones is estimated to be $20.01 billion and 41.32 billion (417 billion x 4.8%, 574 billion x 7.2%). These figures give an indication of the maximal spending potential by college students in 2018.
    • Alternatively, assuming every college student has at least one cellphone and computing device, the annual spending on cellphones is estimated to be $11.79 billion ($600 x 19,645,918); the annual spending on computing and other electronic devices is estimated to be $23.58 billion ($1,200 x 19,645,918). These figures give an indication of the maximal spending potential by college students in 2018.
  • Software: Due to the COVID-19 pandemic, Microsoft 365 has started to offer registered college students free access to Office 365, which is part of the Microsoft 365 suite. The suite also includes Microsoft Teams and other classroom tools, which used to cost $150 for a one-time installation or an annual subscription fee between $70 and $100. Moreover, social media and gaming applications have dominated the devices of college students and 66% of them cited free apps as the main reason for downloading.
  • Internet connectivity: Cable and internet bundle costed approximately $585/year/average college student. In 2018, there were 19,645,918 college students registered with accredited post-secondary colleges or universities in the US, which is projected to increase to 19.73 million and 19.75 million respectively (more projections are available until 2029). Assuming every college student has access to the internet, the annual spending is estimated to be $11.49 billion ($585 x 19,645,918). These figures give an indication of the maximal spending potential by college students in 2018.

College Students’ Spending by Segment

  • In a survey by Pearson on the ownership of mobile devices (smartphones, laptops, tablets, and hybrid or “2 in 1” computers), 94% of college students owned at least one mobile device in 2015.
  • Students whose annual household income less than $35,000 and between $75,000 and $124,999 were more likely to own more than one mobile device than other income groups.

Growth Drivers of College Students’ Spending in IT or Technology

U.S. Post-Secondary Students' Spending on IT
  • Flipped courses, adaptive learning technologies, and online quizzes have been effective for improving the academic performance of college students in the US. For students studying math, flipped courses are particularly helpful to white, male, and students who are strong in math. Students who are exposed to learning technologies and have seen their improvement in academic performance are expected to spend more on IT, such as courseware, online course subscriptions, and internet connectivity.
  • Income is expected to be a major factor that impacts college students’ spending on IT. In a survey conducted by Deloitte in 2020, the average back-to-college spending is estimated to be $1,345. The high-income student or family ($100k or more annual household income) spends $1,647 and grows by 6% from the level in 2019, while the middle-income group ($50k to $99k annual household income) and low-income group (less than $50k annual household income) spend $1,275 and $1,088, with a growth rate of 12% and 4%, respectively. Of the total spending on back-to-college, 10.2% is on electronic gadgets&digital subscriptions and 22% is on computers&hardware; the former is expected to grow by 8% while the latter remains constant in 2020. As the average student income per month is approximately $1,200, mostly spent on essential needs, those who have income from financial aid, such as grants and loans, are expected to spend more on IT than their peers who do not have financial aid.

Future Trends Impacting College Students’ IT Spending

  • The Deloitte survey in 2020 reveals that 28% of college students or families consider transferring to online educational institutions and 29% could change from living in dorms or off-campus accommodations to home. With reduced expense on accommodation, the rising trend of online and remote learning is expected to boost the spending on computing devices and subscriptions, such as PC, tablets, cable or WiFi internet, and online course subscriptions.
  • In 2019, 43% of college students in the US stated that digital learning technologies are extremely helpful to their studies, which helps them complete studies in time by providing a better learning experience and a self-controlled mode of study.
  • Driven by cost-effective cloud technologies and COVID-19, the uptake of online learning services has accelerated in 2020. Various MOOC courses, such as Coursera and EdX, have gained traction; Among 2,500 college-run online learning platforms, the student enrollment rate of the top 100 platforms has approached 50% (compared to only approximately 33% before the COVID-19 global pandemic). This trend of online learning at both private and public institutions is expected to boost the IT spending of US college students.
  • In a survey on the use of technology and the purchasing habit of college students in the US, the UK, Australia, and New Zealand, “66% of college students will pay for music apps, 33% will pay for game and entertainment, and 24% will pay for health apps.” This indicates the tendency of college students’ spending on non-study or -work-related software.
GLENN TREVOR
Glenn is the Lead Operations Research Analyst at The Digital Momentum with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.

The International Olympic Committee

Previous article

Quotes From Prominent Figures that Express an Appreciation or Love for the Internet and Its Benefits

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.