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of their controlled market share, gives these publishers near market monopoly andallows them to effectively lock out competition that could undercut their prices. Consumer Choice: The other market factor that regulates prices is consumer choice. In anormal market, the consumer is free to shop around, to weigh options, and to chooseproducts that are the most suited to them in terms of price, quality, and features. In thetextbook market, however, the student does not choose the book; the professor does.And while professors are slowly becoming more price sensitive, the student – the actualconsumer – has no say in the book they’re assigned, meaning the publisher is free toraise prices without fear of market repercussion.These fundamental flaws in the textbook market have allowed publishers todisproportionately raise prices for nearly thirty straight years.D OCUMENTINGTHEP ROBLEM : T ACTICSFor years, textbook publishers have exploited their unchecked power in the market througha variety of tactics designed to drive up the cost of new books, and undermine cheapermarket alternatives like used textbook programs.Bundling: Congress banned the practice of bundling in 2008, but publishers today exploita loophole in the law through access codes – individual, single-use passwords that grant apurchaser access to online homework assignments or supplementary material. This newmanifestation of bundling is pervasive in the market: in a 2013 survey by the Student PIRGs,over 80% of students replied that they had been required to buy an online access code forat least one of their courses. Modern bundling of access codes and activation keys alsoserves to undermine used and rental book markets. Most access codes are single-use, andare often not sold separately from the book, meaning bookstores can’t buyback or resell thebook and students are forced to purchase a new version every time.New Editions: To perpetuate the illusion of increased quality or features, and, in turn,higher prices, publishers release updated editions of popular textbooks every 2 – 4 years.Like modern bundling, new editions also undermine used book and rental markets. As neweditions become available, many bookstores are obliged to stop buying back old editions,and professors are pressured to adopt the new edition, which has a slightly varied order ordifferent page numbers, making it difficult for students to follow along in older editions.Customized Editions: Publishing companies today market “custom editions” to faculty,which allow a professor to arrange sections of content into a textbook. These editions aremarketed as more affordable and are often published without binding, or in black and white.While these books may offer slight savings compared to standard editions, they are alsodesigned to undermine the used book market. Since they are specialized to a particularinstructor and class, they can only be resold and reused if the same professor at the samecollege wants to teach the same class in the exact same way they did the semester before.2

Hidden Prices: In a 2007 survey by the Student PIRGs, less than halfof professors reported being able to easily find prices for particularbooks on publishers’ websites. In 2008, Congress required publishersto include detailed price and revision information when marketing theirproducts, colleges to post book prices in advance of classes, and in2013, a Government Accountability Office (GAO) review of the changesfound that faculty reported being more aware of affordability issues andcost considerations than they were previously.xivDigital Books: In recent years, publishers have made public pleas for faculty and studentsto shift to digital textbooks, citing lower costs, more features, and greater accessibility. Forpublishers, the shift to digital represents an opportunity to drop the significant burden ofprinting and shipping costs and increase profit margins. For students who opt to go digital,however, the reality is much different than the expectation.Publisher’s digital textbooks have been poorly received by students, primarily because theycontinue many of the restrictive practices from the print market. In the review of aneTextbook pilot program at the University of Wisconsin, students actually ranked eTextbooksbelow print versions on a variety of factors.xvDespite the potential to leverage technology in a constructive way, it is clear that publishersare only willing to use it selectively for their own sake, rather than the sake of the learner.D OCUMENTINGTHEP ROBLEM : I MPACTPIRG’s 2014 report, Fixing the BrokenTextbooks Market, investigated the impact ofhigh prices on students’ academic decisions.The report found that two-thirds of studentsskipped buying or renting some of theirrequired textbooks due to cost. Of thosestudents, 94% recognized that skipping thebook would impact their grade in a course,but chose to do so Concerned6.4%The report also found that high prices impact a student’s ability to enroll in the classes thatthey need. Nearly 50% of students said that textbook prices had impacted which coursesand how many courses they were able to take.xvii That finding has been corroborated byexternal research, including a study by the Florida Distance Learning Consortium finding that25% of students hadn’t registered for a particular course because of the textbook cost.xviiiResearch by external groups has validated these concerns about the impact of high prices,but this is merely one angle of a problem that has multi-faceted impacts. And while it doesnot take a great logical leap to understand the general implications of high textbook prices,little research exists yet to understand the depth and breadth of these impacts.3

P URPOSE OF S URVEY :Over the last decade, the Student PIRGs have demonstrated that increasing textbook costsare a multi-dimensional problem. We have explored at length the rapid inflation of traditionaltextbook prices, the publisher tactics that have allowed prices to soar, and more recently,how prices impact student academic decisions. We have reported on the merits of opentextbooks, showcasing their benefits in accessibility, affordability, and student success, buthave yet to see widespread commitment to support that transition.We recognize that, while the problem of high textbook prices is clear, the necessity for actionis not as overt. Since textbook sticker prices appear small in comparison with the largercosts of tuition or room and board, they are often overlooked, and addressing this problemis deprioritized.In our 2014 report, Fixing the Broken Textbook Market, we highlighted the ways thattextbook costs impact student academic decisions, including the large proportion ofstudents who skip buying textbooks due to the high cost. However, while such findings areextremely consequential, they elucidate only one angle of the problem.At the same time, no research to date — including our own — has attempted to investigatethe degree at which prices actually affect student’s financial standing and behavior. As aresult, the case for prioritizing action around textbook prices has lacked urgency andpotency.This report aims to rectify that gap.The result of a nationwide survey of nearly 5,000 students, this report introduces a newdimension to our understanding of the problem: that high textbook prices are serious causefor concern about our students’ financial well being.4

S URVEY F INDINGS :Over the course of the Fall 2015 semester, the Student PIRGsconducted a survey of students around textbook affordability andfinancial aid. This report aggregates the results of 4,704 studentresponses from 132 unique institutions in 25 states.F INDING 1: ASIGNIFICANT NUMBER OF STUDENTS TURN TO FINANCIAL AID TOPURCHASE THEIR REQUIRED TEXTBOOKS AND COURSE MATERIALS .The survey asked student respondents if they had used financial aid to pay for theirtextbooks. In the question, financial aid was defined as “grants, scholarships, or loans (notincluding money from parents or family)”.Nearly one-third (29.7%) of students replied that they hadused financial aid to pay for their textbooks. This is astartlingly large result, considering that student aid istypically applied to direct expenses such as tuition, roomand board before becoming available for use on textbooksand other expenses.Students Using Financial Aidon TextbooksIf applied to the enrolled undergraduate population in theUnited States, this finding means that over 5.2 millionstudents use financial aid to purchase their textbooks.xixF INDING 2: F ORTHE STUDENTS THAT USE FINANCIAL AID ON BOOKS , IT ’ S USED TOCOVER A MAJOR PORTION OF THE EXPENSE .With nearly one in three students using financial aid to afford their textbooks, it is importantto understand the depth at which students are using financial aid.To further investigate, students were asked to quantify how much of their textbook expensesthey covered with financial aid, both in terms of dollars spent and as a percentage of thetotal textbook expense per semester.For students using financial aid, 70% of their total textbookexpenses were covered by financial aid on average.The same respondents reported that, for those that usedfinancial aid, the amount of financial aid dollars they puttoward purchasing textbooks was more than 300 onaverage per semester.5

For perspective, that is roughly equal to the total amount a student spends on textbookseach semester based on the National Association of College Stores’ measurement,xx androughly half the College Board’s recommended semester budget for textbooks andsupplies.xxi Each of these statistics has their merits and flaws, but can serve as boundariesby which these findings are evaluated.F INDING 3: H IGHTEXTBOOK PRICES HAVE A DISPROPORTIONATE IMPACT ONSTUDENTS AT COMMUNITY COLLEGE .When broken down by type of college, our data show that a greater percentage ofcommunity college students use financial aid to purchase textbooks:28% of students use financialaid for textbooks at 4-yearpublic colleges Compared to 50% at 2-yearand community colleges.At the same time, community college students use financial aid for textbooks at higherpercentages than students at 4-year institutions.Of community college students using financialaid, 65% said that they used financial aid to covertheir entire textbook expense, compared to just50% at 4-year schools.Average Financial Aid Dollars Spenton Textbooks PurchaseAnd, on average, community college studentswho used financial aid used 347 of financial aidfor textbook expenses, compared to an averageof 290 at 4-year state schools.6

A NALYSIS :Despite increased access to alternatives, student spending on textbooks has been relativelystagnant in recent years. But with other costs rising and more students feeling the pinch,maintaining the status quo is not enough.T EXTBOOK P RICES A DD U NNECESSARY F INANCIAL H ARDSHIP :Before presenting the implications of our findings, there are a few important notes. First,that our survey grouped scholarships, grants, and loans in the definition of financial aid. Thismeans we cannot accurately generalize the amount of debt textbooks are responsible for.However, we can model the total debt accumulation for a hypothetical student who does nothave financial aid in the form of a grant or scholarship.Most commonly, financial aid is applied to tuition and room and board before other costs.Grants and scholarship money is applied first, leaving loans to cover the balance of thosecosts. If a student expects to have trouble covering other costs – like textbooks – they mayrequest additional financial aid, but may end up paying out of pocket.Given the previously stated context of increasing student debt, and knowing that a likelyscenario is one in which student respondents are using loans to purchase textbooks, ourfindings should be of serious concern. Approximately 30% of the 5,000 surveyed studentsindicated that they used, either in full or in part, financial aid—which includes loans—to payfor their textbooks.Of the 30% of students using financial aid for textbooks, theCostofaverage amount used is more than 300 per semester. ThatTextbookCostofadds up to 2,400 over the course of a four-year program,BoughtTextbookand 1,200 for two years at community college. The ultimateOutrightboughtcost is even higher for students who borrow that money: awithloans 2,400 and 1,200 student loan translates into 555.55and 277.73 worth of interest payments respectively.xxii Putanother way, a student using loans would pay an additional 46.39 for a 200 textbook. While a student with the ability to buy books outright payssticker price, a student using financial may actually end up paying a higher price for books.Similarly, to purchase a single, 200 textbook, a student would need towork nearly 28 hours in a minimum wage job. If a student were to buyonly 600 worth of textbooks every year, that would amount to anadditional 2 hours of work per week for the entire year.In context, to afford yearly in-state tuition at a public school, a studentwould need to work nearly 991 hours at a federal minimum-wagejob.xxiii That’s a 40-hour a week, full-time job for half the year. Add theaverage cost of room and board at a 4-year public institution, and even a28hoursper 200book7

year-round full-time job would leave that student in a financial deficit. High textbook pricesunnecessarily pile on top of that deficit.For many students, particularly those who rely on financial aid, the high cost of textbooksnecessitates a lose-lose choice: purchase the necessary textbook and add to their financialhardship, take time away from studying to work extra hours, or go without the book andaccept the impact on their ability to learn and perform well.T EXTBOOK P RICES P LAYANN EGATIVE R OLEINS TUDENT C HOICE P OINTS :Between 2003 and 2013, average tuition and fees increased more than 30%. Average costof room and board increased over 20%.xxiv This increase in cost means that the averagecollege-seeker today faces significant financial barriers to attaining a degree. These financialbarriers create discouraging choice points throughout a degree-seeking, or potential degreeseeking student’s career.On their own, the sticker shock of tuition and room and board causes many students to optout of enrolling entirely. In a recent study of non-college going students by the McKinseyCenter for Government, 48% cited an inability to pay as the reason they weren’t attendingschool, and 16% cited their need to spend time working.xxv High textbook prices only serve toaggravate this problem.In comparison with the tens of thousands of dollars spent on tuition or board, a few hundreddollars for textbooks is often overlooked, and written off as negligible. However, researchshows that seemingly small amounts of money can have a disproportionate impact: atMorgan State University, a study showed that 10% of students dropping out for financialreasons owed the University less than 1000.xxvi That’s less than the amount the CollegeBoard recommends full-time students budget for textbooks and course supplies for a singleyear.To add further perspective, at a community college, the cost of textbooks can be nearly aslarge a barrier as the cost of enrolling in a course itself. The tuition and fees for a 3 credithour Principles of Microeconomics course at the Virginia Community College system wouldbe 436.xxvii The price of the most popular Microeconomics textbookxxviii is 225.66 new, 100.06 on Amazon. In this instance, the book would cost between 52% and 23% of thecost of enrollment.In the current environment, it’s clear today’s textbook prices are no longer just aninconvenience – they are high enough to be a significant barrier to college enrollment.H IGH T EXTBOOK P RICESHAVEO PPORTUNITY C OST :Beyond the immediate burden on students, high textbook prices also create an opportunitycost in terms of available funding.8

Survey results show that 30% of students use financial aid for textbooks, at an average of 300 per semester. Further, there are an estimated 17.5 million enrolled undergraduatestudents in the United States.xxixThese numbers suggest that students are spending around 1.575 billion a semester, or 3.15 billion a year, in financial aid on textbooks. Therefore, alleviating high textbook costscould free 3.15 billion in state, federal, and local funding for use in reducing other highereducation costs.A N U NSUSTAINABLE T REND :One thing is clear – the current state of the textbook market is unsustainable. Unnecessarilyhigh textbook prices contribute to student economic hardship, and are a drag on enrollment,completion, and student success.This new data demonstrates that, in the broader context of increasing debt, high textbookprices are impactful enough to merit urgent, demonstrative action from policymakers on alllevels to support alternatives to the traditional system of publishing.9

AP OWERFUL S OLUTIONWith today’s technology, we know it is possible to share information more easily andefficiently than ever before. Capitalizing on these advances, an alternative with the potentialto challenge traditional textbook publishing has emerged: openly licensed educationalresources.Open licenses, the most common of which are the Creative Commons Licenses,xxx allow forintellectual property – like educational materials – to be accessed, used, copied, and evenadapted for free by the public.A burgeoning movement toward openly licensed educational materials – in particular,textbooks – is turning the traditional publishing model on its head. In direct contrast totraditional publishers, who strictly control every facet of access and use of their textbooksand materials, open textbooks are available for free online, are free to download, and areaffordable in print. This difference may seem small, but by their nature, open textbooks havethe potential to alleviate the ill consequences of an uncompetitive market on students,making them a serious challenge to publishers’ status quo business models.C OMPAREDTOT RADITIONAL P UBLISHINGPrice: A 2015 report by the Student PIRGs found that if every undergraduate student in theU.S. had just one of their traditional textbooks displaced by an open textbook, it would savestudents over 1 billion per year. On average, students save more than 100 per course,per semester when assigned an open textbook in place of a traditional one.xxxiCompetition: Open textbooks have the potential to reintroduce competition into thetextbook industry because they are produced and published in new and innovative ways,separate from the traditional system. Instead of concentrating market power in the hands ofpublishers, the decentralized aspect of open textbooks gives more power to students andfaculty, which will refocus competition on important characteristics like efficacy and clarity.Flexibility in Access: Open textbooks alleviate issues of access to course materialsbecause they offer students flexibility and choice. Open licensing allows a student, if theyprefer to read online

2006, the cost of a college textbook increased by 73%i - over four times the rate of inflation. Today, individual textbooks often cost over 200, sometimes as high as 400. Textbook prices have increased unabatedly because the textbook market lacks two major economic forces. Normal Market .Textbook Market Competition in the market forces