Like I said, just look around at what people actually do on a college campus - students don't carry around panniers, they use a backpack. And I repeatedly advocate for not using a backpack for work commuting, but for a place where you're walking around all day a backpack makes a lot more sense. But my opinion on what makes sense doesn't matter nearly as much as what pretty much every college student does.

I see a curiously large # of students on bikes without a light, but if one did invest in a light best way to go would be a cheaper dynamo hub (the Sanyo is $135 for the dynamo and wheel, another $50-$110 for the front light) and a dynamo light because it's permanently attached to the bike (might want to more permanently attach the light with special screws or something). This one depends on the particular student - at least carrying a light in a backpack is feasible if it's a small self-contained light, but when they bike, say, to a bar, they're not going to want to be carrying a light around inside either, and usually gets left at home.

But I've never seen anyone use panniers on a college campus, and if a few do they're definitely a tiny minority. Everyone wears their backpack while biking.

The #1 thing a college student needs that I see is a ulock to lock their bike. Otherwise they'll cheap out and try to use a cable lock.