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Finance NEWS

New college students boost local economy

by Nick McGurk
Publication: WNDU.com

August 23, 2009


Thousands of college students are streaming into the South Bend area from all over the world.

And that means a shot in the arm for local businesses.

It is definitely like you're walking into a brick wall. One day you're doing business as usual, and then all of a sudden the next day it's like woosh," said Marcy Brovont of Bed Bath and Beyond. "The surge of business was very apparent," she said.

Every year, Notre Dame students spend nearly $40-million off campus, according to a study by the university published online. But a Notre Dame finance professor says the impact is far greater.

"Student-related expenditures will run in the vicinity of probably a little bit over 100 million dollars," said Richard Sheehan, a professor of finance at Notre Dame. He says the university's estimate of roughly $3,600 spent by every student annually could be a low number. The figure could be more than $6,000 per student, he said.

One thing is clear, though: when students return to town, they start spending money.

"It's always surprising when the bill comes, but that's just part of it, part of living on your own," explains Kevin Henry, a Notre Dame junior whose purchase at Mishawaka's Bed Bath and Beyond totaled hundreds of dollars on Sundy.

Restaurants also do big business when students are in town.

"Whenever we come back in town we like to hit up all the local places," said Riyath Mallahi, a Notre Dame senior who ate at Bruno's Pizza on Sunday.

Bruno's hires more employees to deal with the influx of students in town.

"Day one, when the students are back in town you can feel it," said John Cataldo, general manager of Bruno's Pizza.

The last year has been tough on local businesses - and the impact of students won't reverse that.

"It's not all of a sudden the nirvana, that we're out of the recession, students are back, everybody is gonna be happy, but the depression will be less severe than it would be," said finance professor Sheehan.

For its part, the city of South Bend encourages students to leave campus and spend a few bucks in town.

On Monday they' offer an "Explore south Bend Frosh Tour" -- a bus tour for students from IUSB, Holy Cross, Saint Mary's and Notre Dame.

Those students see South Bend, get a bit of a history lesson and learn about various places to go for entertainment and food.