The chart above illustrates the “college textbook bubble” – the dramatic and unsustainable rise in the price of college textbooks. Since 1998, the CPI for college textbooks has increased by 150%, compared to only a 44.8% rise in the CPI for all goods and services, and a negligible rise (only 0.05%) in the CPI for recreational books (non-educational books). The fact that the real price of recreational books has fallen significantly over the last 15 years would suggest that the rising cost of college textbooks can’t be justified by higher publishing costs, and has to be explained by other factors like the consolidation of publishers that has resulted in less competition and anti-consumer behavior.
A new report “Fixing the Broken Textbook Market: How Students Respond to High Textbook Costs and Demand Alternatives” from the Student Public Interest Research Groups explains why college textbook prices have risen so dramatically, offers some recommendations, and highlights some of the non-monetary costs of unaffordable textbooks: A survey of college students revealed that 65% of them decided against buying a textbook for at least one course because it was too expensive. The survey also found that 94% of those students who had foregone purchasing a textbook were concerned that doing so would hurt their grade in a course.
According to the report, here’s what’s behind the “college textbook bubble”:
The underlying cause for high prices comes from a fundamental market flaw in the publishing industry. In a typical market, there is a direct relationship between consumer and provider. The consumer exercises control over prices by choosing to purchase products that are a good value, and the competition forces producers to lower costs and meet demand. In the textbook industry, no such system of checks and balances exist. The professor chooses the book, but the student is forced to pay the price. Because of this, the student is, in essence, a captive market. Without the ability of the student to choose a more affordable option, publishers are able to drive prices higher without fear of repercussion.
It is also important to note that just five textbook companies control more than 80% of the $8.8 billion publishing market, giving them near market monopoly and protecting them from serious competition.
Publishers use a set of tactics that drive prices skyward by reducing student choice:
1. New editions: Publishers release new editions every 3-4 years regardless of changes in the subject, with prices that are 12% higher on average. [MP: From my experience, some publishers have gone to a 2-year cycle for new editions.] Once a new edition is released, that copy takes the place of older editions on stores shelves. That means the students are not only forced to buy the more expensive new edition, but are also unable to sell back their used book from the previous semester.
2. Costly bundles: Publishers also increase costs by packaging textbooks with online pass-codes or CDs that increase prices 10-50%. These pass-codes often expire after a limited time period, eliminating the viability of a textbook for selling back.
3. Resale sabotage: New “cost-saving” options like loose-leaf and custom editions are more affordable upfront, but often end up costing more because they have no resale value. Second, the sky high prices of new print books drives the prices in the rest of the marketplace.
What to do? Here are the report’s recommendations:
1. Students should directly advocate for open textbook use in their classrooms
2. Faculty should consider adopting open textbooks in their classrooms. They should check the University of Minnesota Open Textbook Library to see if there’s a book available for your class.
3. Campus administrators should consider creating an open textbook pilot program on their campus. They can see the University System of Maryland’s MOST Initiative as a sample.
4. State and federal legislatures should invest in the creation and development of more open textbooks. See Washington state’s Open Course Library as an example.
5. Publishers should develop new models that can produce high quality books without imposing excessive prices on students.
MP: I’ve written before on CD about some of the other textbook alternatives including:
1. Boundless — For only $19.99, students can purchase a “Full online text alternative with SmartNotes (that summarize long text into the key points and the terms students need to study effectively), quizzes and flashcards” that exactly matches the material in a standard college textbook that might cost $200-300.
2. OpenStax College is an initiative of Rice University that offers students “free textbooks that meet scope and sequence requirements for most courses. These are peer-reviewed texts written by professional content developers. Free online and low-cost in print, OpenStax College books are built for today’s student budgets.” OpenStax has an ambitious goal to provide free textbooks to 10 million students, and their free textbooks have already been adopted by more than 350 colleges and universities worldwide.
Bottom Line: The era of $300 college textbooks is ending. It might take awhile, but with all of the “creative destruction” from low-cost and free textbook alternatives, there may be no way for the traditional textbook publishers to survive – just like Encyclopedia Britannica couldn’t survive when free, superior alternatives like Wikipedia became available.