Most of the general public, particularly those who know students in college or university, are aware of the sharp increases in the cost of higher education over the last several decades. Such increases have strained the budgets of students and their families and have led to significant increases in student debt. Included in these sharp price increases is the cost of textbooks and online materials that students need for their courses. A commonly cited estimate is that the cost of these materials may average around $1,200 per year per student (or $150 per course for eight courses during an academic year).
These costs are high given the contemporary need for more online materials and the relative market power enjoyed by textbook publishers. Once a faculty member assigns a textbook for a course, perhaps an accounting course, the conscientious student is required to purchase that particular text, giving the publisher some market power over pricing. For many subjects, like introductory economics, there can be 10 or more textbooks that could be satisfactory. A conscientious professor should thus consider both the quality of the textbook and the cost to the student when making a decision for his course. As more faculty consider cost in their decisions, publishers will naturally become somewhat more conscientious in their pricing. However, many faculty members prefer the style and content of a particular text, regardless of cost. They justify their decision as providing the best quality course for their students.
A commonly cited estimate is that the cost of textbooks may average around $1,200 per year per student.Another aspect of the cost per student is the policy of the college or institution in providing textbooks to students. There are essentially three possible options in the current textbook economy: freedom of choice, inclusive access, and equitable access. Each of the three is briefly described below.
With “freedom of choice,” the professor announces in advance of the semester those textbooks and materials required for the course, as well as any optional materials. The faculty member generally has complete discretion as to the materials assigned and the resulting price per student to acquire them. Students generally have freedom to acquire the materials from different sources, such as the college bookstore, a for-profit company like Amazon, or other online sources. Frequently, a textbook can be either purchased or rented, with the option of buying the physical product or having digital access. Thus, students have considerable latitude in how they acquire the text. This textbook option tends to be followed by higher-quality institutions, for instance at Davidson College, where I teach.
The second option is “inclusive access.” Here, the faculty member chooses materials and informs the college administration of these choices. The college then orders the texts for all students registered in the course and bills the student for the materials. The obvious advantage is that each student arrives the first day with the required materials, and the faculty member can assume that all students have the textbook and any online supplements.
With inclusive access, two variants can be applied by the institution. First, the school may permit a student, upon request, to “opt out” of the purchase. Generally, some rational explanation must accompany the student’s request. The other variant is that the school may require a student to “opt in” to the practice in the first place. In that case, students, unless requesting to participate in the practice, will not automatically receive the materials and the accompanying invoice.
The final option is known as “equitable access.” In this case, all students pay the same flat-dollar rate, determined in advance of the fall semester, for access to all materials in all courses in which they are enrolled. For instance, during the past academic year at Appalachian State University, a full-time student paid a total of $270 per semester for the materials for all of her courses. Approximately 80 percent of these materials were digital, and 20 percent were hard copies.
The Department of Education has moved to ban “inclusive-access” textbook plans unless students give permission to be billed.Under an equitable-access plan, students concentrating in the humanities (with lower-cost novels) and in the sciences (with higher-cost technical textbooks) pay the same. Publishers can offer the materials at a lower per-unit cost given the volume of sales—i.e., the total coverage of the course. At Appalachian State, satisfaction with the program and its cost per semester has led to an opt-out rate of only one percent. Other strong academic institutions that use equitable access are Cornell University and the University of California, Davis.
Some may question the fairness of each student paying the same price regardless of course selection. In response, one can note that all students pay the same tuition (before grants and scholarships) regardless of their use or non-use of expensive laboratory equipment or fitness machines. To many, this equitable-access approach is attractive. Faculty are allowed to assign the materials that best suit their course content and teaching methods. Moreover, the charge per semester of $270 is less than 50 percent of the estimated national cost per student for course materials.
Of relevance today is the Department of Education’s recent efforts to ban all automatic-billing methods unless an institution requires students to give prior permission, thus essentially mandating the “opt-in” variants of “inclusive access” and “equitable access.” Prior to 2016, it was not legal for colleges to bill students with federal financial-aid funds without their permission. In recent years, however, federal funds have been permitted for inclusive-access and equitable-access plans. Given student complaints about paying for unused textbooks and the limited duration of online access to materials (typically for the length of the semester only), there is now renewed governmental effort to require an explicit “opt-in” process. Supporters of the change feel this is a move towards transparency that will allow students to search for the best price for materials. In fact, the change may induce publishers to lower prices to attract students to opt in to automatic billing in the first place.
Critics, on the other hand, argue that this policy change will reduce the number of students purchasing the materials for a given course. Students, particularly first-year students without a good understanding of higher education, can easily be tempted to avoid enrolling in a textbook-distribution plan. With a significant reduction in sales, publishers may offer less competitive prices, thus raising the cost of materials for those conscientious students who do opt in to the process. Also, those students who do not opt in will not always find the materials and texts elsewhere, leaving them less prepared to succeed in the course.
Assessing the merit of the Department of Education’s proposal is complicated by the uncertain effect that it may have on textbook prices. Proponents see incentives for lower prices; critics see incentives for higher prices. In reality, some mix of the two may result, depending on the pricing strategy of the publishers. Given this ambiguity, it may be more desirable for colleges to avoid automatic-billing methods altogether and use the freedom-of-choice method in the future.
Clark Ross has taught economics at Davidson College since 1979. He served as dean of the faculty for nearly 15 years.