Does anyone have any ideas for inexpensive gifts for grads. I would like to give each student in my sons class of 20 something small.

Not sure what price range you're looking in but Laundry baskets are always good Whether they're going off to college, living on their own or staying at home, you can always use them.
Then keep an eye on sales and coupons and add in laundry detergent. If you can finda good deal on towels and washclothes add those in too. Again, depending on how much you want to spend you can add in canned food, bowl, spoon, cup etc... small things that they can use if they're in a dorm.

I do this gift basket a lot for graduations in my family, dpending on who it is and how much i spend depends on what goes in. Also what good deals i can find on things. I've done one filled with ramen noodles and one i did a george forman (found a two hamburger one for $5 one time and got some for my gift closet)

If you decide to go with laundry detergent and softener here is a good way to save money! There is a $3 gain fabric softner coupon in the papers this weekend. You can use it at wal-mart or Family doller and pay about 25 cents for a 60 or80 count box (depending on what's available in your area) Some family dollars have the boxes for $3 so they're free for you!
You can usually find additional coupons to buy from coupon clipping services or on ebay.

Check out this post on the krazy coupon lady, it looks like someone found a store running a sale this next week where they're MAKING money to take them out of the store (think it was meijjer?? look through the comments to find it, i just remember the store wasn't around me )
http://thekrazycouponlady.com/2011/02/11/hot-3-00-gain-coupon-plus-0-26-at-walmart/