A CKNOWLEDGEMENTS :The authors would first like to thank the students and staff at CALPIRG, ConnPIRG, MarylandPIRG, MASSPIRG, NCPIRG, NJPIRG, OSPIRG, and WashPIRG, for their work to collect anddatabase the surveys used in this report. They are the both the inspiration for, and theprincipal drivers of, the Student PIRGs campaign to Make Textbooks Affordable.Additionally, the authors would like to thank Nicole Allen of SPARC, Lindsey Tepe of NewAmerica, Cable Green of Creative Commons, Sarah Cohen of the Open Textbook Network,and finally, Marilyn Billings and Jeremy Smith of UMass Amherst for their feedback and helpreviewing this report.Last, but certainly not least, the authors would like to thank the William & Flora HewlettFoundation for their continued financial support for this campaign.To attribute this work, please credit the Student PIRGs and provide a linkto 2016 by Student Organizing, Inc. Covering the Cost.This work is licensed under the Creative Commons Attribution 4.0 International License. Toview a copy of this license, visit photo credit:JohannesJansson/,CCBY.The Student Public Interest Research Groups (Student PIRGs) are independent statewidestudent organizations that work on issues like environmental protection, consumerprotection, and hunger and homelessness. For nearly 40 years, our students and staff havebeen making a real difference in people's lives and winning concrete changes to build abetter world.AUTHORS:Ethan SenackRobert Donoghue218 D St, SEWashington, DC 20003202-546-9707 [email protected]

E XECUTIVE S UMMARY :Over the last decade, the cost ofcollege textbooks has soared. Since2006, the cost of a college textbookincreased by 73% i - over four timesthe rate of inflation. Today, individualtextbooks often cost over 200,sometimes as high as 400.The result of a nationwide survey of nearly5,000 students, this report introduces a newdimension to our understanding of theproblem: that high textbook prices are seriouscause for concern about our students’financial well-being.Textbook prices have increased unabatedlybecause the textbook market lacks two majoreconomic forces.SURVEY FINDINGSNormal MarketTextbook Market Competition inthe market forcesprices down Five major publisherscontrol 80% of themarket, locking outcompetitors Consumer choicerewardscompanies thatcompete on priceand quality The student – theconsumer – has nochoice in whichtextbook they’reassignedFor nearly 30 straight years, textbookpublishers have exploited their uncheckedpower in the market through a variety oftactics designed to drive up the cost of newbooks, and undermine cheaper marketalternatives like used textbook programs.However: since textbook sticker prices appearsmall in comparison with the larger costs oftuition or room and board, they are oftenoverlooked, and addressing this problem isoften deprioritized.At the same time, no research to date —including our own — has attempted toinvestigate the degree at which prices actuallyaffect student’s financial standing andbehavior. As a result, the case for prioritizingaction around textbook prices has lackedurgency and potency.F INDING 1: A SIGNIFICANT NUMBER OFSTUDENTS TURN TO FINANCIAL AID TOPURCHASE THEIR REQUIRED TEXTBOOKS .Nearly one-third (29.7%) of students repliedthat they had used financial aid to pay fortheir textbooks. This is a startlingly largeresult, considering that student aid is typicallyapplied to direct expenses such as tuition,room and board before being used fortextbooks and other expenses.If applied to the enrolled undergraduatepopulation in the United States, this findingmeans that over 5.2 million students usefinancial aid to purchase their textbooks.iiF INDING 2: F OR THE STUDENTS THAT USEFINANCIAL AID ON BOOKS , IT ’ S USED TO COVERA MAJOR PORTION OF THE TOTAL EXPENSE .For those that used financial aid, the amountof financial aid dollars they put towardpurchasing textbooks was more than 300 onaverage per semester.F INDING 3: H IGH TEXTBOOK PRICES HAVE ADISPROPORTIONATE IMPACT ON STUDENTS ATCOMMUNITY COLLEGE .When broken down by type of college, ourdata show that a greater percentage ofcommunity college students use financial aidto purchase textbooks: 28% at 4-year public colleges22% at 4-year private institutions50% at 2-year & community colleges

ANALYSIST EXTBOOK P RICES A DD U NNECESSARYF INANCIAL H ARDSHIP :Of the students using financial aid fortextbooks, the average amount used is morethan 300 per semester. That adds to 2,400over the course of a four-year program, and 1,200 for two years at community college.That’s nearly the cost of adding an entire extrasemester for a community college student.The ultimate cost is even higher for a studentwho uses loans to cover that cost: a 2,400and 1,200 student loan translates into 555.55 and 277.73 worth of interestrespectively.iii Put another way, a studentusing loans would pay an additional 34.72for a 150 textbook. While a student with theability to buy books outright pays sticker price,a student using financial may actually end uppaying a higher price for course materials.T EXTBOOK P RICES P LAY AN N EGATIVE R OLE INS TUDENT C HOICE P OINTS :In comparison with the tens of thousands ofdollars spent on tuition or board, a fewhundred dollars for textbooks is oftenoverlooked, and written off as negligible.However, research shows that comparativelysmall amounts of money can have adisproportionate impact: at Morgan StateUniversity, a study showed that 10% ofstudents dropping out for financial reasonsowed the University less than 1000.iv That’sless than the amount the College Boardrecommends students budget for textbooksand course supplies for a single year.H IGH T EXTBOOK P RICES HAVE O PPORTUNITYC OST :These numbers suggest that students arespending around 1.575 billion a semester, or 3.15 billion a year, in financial aid ontextbooks. Therefore, alleviating high textbookcosts could free 3.15 billion in state, federal,and local funding for use in reducing otherhigher education costs.CONCLUSIONThis new data demonstrates that, inthe broader context of increasing debt,high textbook prices are impactfulenough to merit urgent, demonstrativeaction from policymakers on all levelsto support alternatives to thetraditional system of publishing.With today’s technology, we know it is possibleto share information more easily andefficiently than ever before.A burgeoning movement toward openlylicensed educational materials – in particular,open textbooks – is turning the traditionalpublishing model on its head. In directcontrast to traditional publishers, who strictlycontrol every facet of access and use of theirtextbooks and materials, open textbooks areavailable for free online, are free to download,and are affordable in print.Last year, the Student PIRGs released a reportshowing that open textbooks have thepotential to save students more than 1billion per year.vHowever, environmental and policy barriershave slowed the development and adoption ofopen educational resources. To realize thepotential of openly licensed materials , thesebarriers and inhibitors must be overcome.These barriers include .1. A centralized system of textbookproduction that relies on majorpublishers to cultivate content2. Skewed perceptions about learningmaterials that value frills over efficacy3. Reliance on a legacy system ofpublishing that is less time consumingbut also less effectiveTo solve the problem of high textbook prices,the higher education community must activelywork to transition the environment in highereducation. This report offers detailedrecommendations on how institutions,policymakers, faculty, and students can do so.


I NTRODUCTION :AH ISTORYOFR ESEARCHSince 2004, the Student PIRGs have published more than a dozenresearch reports investigating the college textbook industry,documenting the disturbing trends in pricing, exposing publisher tacticsto keep prices high, and revealing the impact of high prices on students.Over the years, we’ve surveyed nearly 10,000 students, interviewedalmost 500 faculty members, and tracked the prices of hundreds ofbooks.viD OCUMENTINGTHEP ROBLEM : P RICESOver the last decade, the cost of course materials – textbooks, specifically – has soared.Since 2006, the cost of a college textbook increased by 73%vii - over four times the rate ofinflation. Overall, since 1977, the cost of textbooks has increased 1041%.viiiToday, individual textbooks often cost over 200, sometimes as high as 400.ixAt the same time, the cost of highereducation has increased significantly overthe past decade. In 2013, 7 in 10 seniors atpublic and private nonprofit collegesgraduated with student loan debt. Amongthose borrowers, the average debt wasnearly 29,000.x As a nation, Americanshold over 1.2 trillion in student loan debt.xiTHEF ORCES B EHIND H IGH P RICESTextbook prices have increased unabatedly because the textbook market lacks two majoreconomic forces. Competition: In a free market, companies are forced to compete with each other onprice, quality, and features in order to accumulate consumers. This competition helpsdrive innovation and ultimately benefits the consumer. In the textbook market, however,five major publishers control over 80% of the market.xii These publishers tend to avoidpublishing books in subject areas where their competitors have found success, insteadfocusing in on their own particular subject or issue areas. In a 2013 study, just threepublishers were responsible for 74% of the top textbooks sold.xiii This tactic, and the size1

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