You can often find costumes for musicals by visiting local thrift stores. If the musical deals with an older era, this may be the ideal spot for locating perfect costume pieces. For example, if the students are performing the 1950s-set classic "Grease," you can find costume pieces like long skirts, leather jackets and varsity sweaters at a low cost. Use some iron-on fabric decals to add the finer details like the poodle on a poodle skirt or the V for varsity on a sweater.
Dance studios often have closets full of costumes that they loan to local schools. If the studio does not have a costume closet, many of the parents likely have closets at home packed with once-worn costumes collecting dust. If the studio is in the local community, chances are students at the studio also attend the middle school. Inquire to see if any of the parents have any costumes they would be able to lend or donate to the middle school theater arts department. These costumes can make ideal options for students portraying flappers, peasants or royalty, as the costumes are typically extravagant with lots of lace, sequins and layers of fabric. Costumes for boys will likely be harder to find but not impossible if the studio has a fair amount of male dancers.
Use materials lying around the home or school to create costumes. Transform cardboard boxes into whimsical and fantasy costumes such as robots, animals and inanimate objects like trees. This would work well if the musical is the "Wizard of Oz," as the boxes could turn into the Tin Man or even the Lion or Oz himself.