Inflation is causing prices to rise, presenting a problem for highly vulnerable college students.

College tuition, food, gas, housing and rent have skyrocketed, and living comfortably is not a reality for many students who struggle to receive their basic needs.

According to the U.S. Labor Department data published on Jan.17, 2023, consumer prices rose by 6.5% from December 2021 to December 2022. Food prices increased by 10.4%, energy prices increased by 7.3%, medical care increased by 4.0% and electricity prices increased by 14.3% in the same 12-month period. 

High inflation and its effect on prices has caused many students to seek financial support. Now, more than 85% of students receive some form of financial aid, according to the National Center for Education Statistics. The interest rate on federal student loans increased to 4.99% from 2.75% for the 2022-23 school year according to Education Data Initiative. 

Derek Thornhill, a managing director at Saxony Partners, has a daughter in college. He spoke about the effects of inflation and rising costs that he has witnessed in business.

“Healthcare costs have gone way up both for the company and the individual,” Thornhill said. “Most companies are reducing travel expenses and limiting the amount employees can expense. Corporate budgets have seen a tightening over the last 12 months. It also costs workers more money to commute to work with high gas prices.”

Thornhill has also seen the impact that rising prices have had on college students.

“I have a daughter who is a junior in college and all her expenses have increased,” Thornhill said. “Groceries are more expensive. Gas is more expensive. Everything costs more than it did when she was a freshman: housing, tuition, everything.”

High inflation, rising prices and wages remaining the same not only make it more difficult for students to pay off their student loans after graduation, but also young adults who are becoming financially independent from their parents at older ages.

“Inflation is a broad measure, and the government has options in how it manages supply and demand, but their choices do not always reflect what is best for us as consumers,” Thornhill said, adding that inflation is a factor, but not the sole reason young adults are struggling to become financially independent from their parents.

Inflation can affect people of all backgrounds and social classes. For college students, limiting expenses and making changes to one’s lifestyle is certainly an effective option in dealing with the economic turmoil.

“Find a way to work and offset the increase in expenses if possible,” Thornhill said. “Live close to campus, if not on campus, to save on gas. Walk more. Limit the number of times you go out in a week. When you shop for groceries, look for deals and don’t always go for name-brand items.”