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Guest Post: A Textbook Proposal for Obama

[Editor's Note: Throughout his presidential campaign, President-elect Barack Obama often talked about the need to make college more affordable for low- and middle-income students. In today's post, longtime student advocate Luke Swarthout offers a proposal for overhauling the college textbook industry that he believes will result in significant savings for students. Luke's views are his own and do not necessarily reflect those of the New America Foundation.]

By Luke Swarthout

As the incoming Obama administration prepares its policy agenda and searches for ways to help middle class Americans within the constraints of the current budget deficit, it should consider championing efforts to bring down the costs of college textbooks. This goal could be accomplished in a relatively inexpensive manner: not by more generously subsidizing the current system but by sparking reform in the way textbooks are created and sold.

The high cost of textbooks is a significant but often overlooked part of the college cost equation for millions of students from low- and middle-income families. The average student pays nearly $1,000 for books each year -- a significant sum. For students at low-cost public colleges, books can cost as much as 40 percent of tuition and fees. And to add insult to injury, students and their families are often frustrated to learn that they cannot resell their textbooks at the end of the semester because new, but substantively unchanged editions are at the printers.

Local politicians from both blue states and red states (and those in between) recognize the saliency of the issue. Legislators in states as politically diverse as California, Georgia, and Ohio have introduced bills designed to make college textbooks more affordable at their public colleges and universities.

The flaws of the current system are well documented. Testifying in 2006 before the Advisory Committee on Student Financial Assistance, a federal panel that advises Congress on student aid issues, economist James Koch, described the demand side issues with textbooks as a classic example of a "broken market." 

"The textbook market is remarkable because the primary individuals who choose college textbooks (faculty) are not the people that pay for those textbooks (students)," Koch, a professor of economics at, and former president of, Old Dominion University, wrote in a report for the advisory committee. "Only a few other organized markets in the United States are similar in this regard. A comparable situation exists in medicine where doctors prescribe drugs for their patients, but do not pay for those drugs."

The supply side of the textbook industry faces similar problems. As a result of recent consolidations in the market, there are now three main publishers: Pearson, Cengage (formerly Thompson Learning and Houghton-Mifflin) and McGraw-Hill. While smaller academic publishing houses remain, the three effectively form an oligopoly. By maintaining relationships with authors, book stores, printers, professors, and colleges, these publishers are able to ensure their books wind up in the backpacks of college freshmen. Their control ensures not only the promotion of their own books but it has slowed the evolution of textbooks beyond their traditional format.  

The publishing oligopoly will not reform itself. For all the technological innovation of the last two decades, the college textbook continues to look much like it did in the nineteenth century: bound in hardcover and bought in bookstores. Publishers have been reluctant to move textbooks beyond their traditional medium for fear of losing their competitive edge in the market. Placing textbooks online diminishes the value of publisher relationships with printers and bookstores, just as producing a more affordable line of textbooks would undercut their current market.

The current market failure in the textbook industry comes not only at a high cost for students, but for taxpayers too. The federal government and states indirectly support the current textbook regime by allowing grant aid to be used to cover the cost of books.

Fortunately a growing coalition of non-profits, colleges, and companies are creating the tools to deliver open educational resources to students while protecting the rights of writers and professors. Students are increasingly willing to accept information, news, and texts through a digital interface. Only the lack of high-quality free resources stands between students and more affordable textbooks. 

The Obama Administration should propose a "21st Century Textbook Challenge Grant" to provide low-cost, high quality textbooks and bring educational resources into the new millennium. The program would enlist the best professors and textbook writers to create 20 introductory online textbooks in key disciplines like math, science, engineering, and foreign languages. These textbooks would be distributed for free on the web under a Creative Commons license. That would not only allow any professor to use these books without any cost, but would also enable any company to build upon the original textbook and sell an updated version or ancillary materials. The result would be a fleet of free, high-quality texts that could be used in part or in whole by any college professor across the country. 

The mechanics of the program could be quite basic. A $10 million pool of money could be used to make grants of between $250,000 and $500,000 to professors, companies or writers for the production of these textbooks. There are two clear benefits to such a program:

  • Savings: In the short term, free, high quality textbooks could save students hundreds of dollars a year in book costs. For example, if all California's community college students used one online textbook instead of buying a $100 book, they would collectively save $250 million a year. Since both Pell Grants and Cal Grants can be used for textbook costs, money from these programs could stretch further in covering the college costs of current students.

     

  • Market Reform: In the long term, the injection of real, low cost alternatives to the current crop of textbooks would force textbook publishers to deal with the realities of 21st century technology and increasingly unmanageable textbook costs. It could also help faculty become more comfortable with using online textbooks and prove the viability of this approach to smaller publishing firms. 

During the presidential campaign much was made of Obama being a candidate for the 21st century. This was a comment not simply about his age (the first post-boomer president), but his campaign (innovative in the areas of online fundraising and organizing) and his policies (health care technology and green collar jobs). The broken textbook market could benefit from the same type of innovative thinking and policymaking. A relatively small investment could not only help students struggling to pay for college but bring the industry into the twenty-first century.

Luke Swarthout was U.S. PIRG's Higher Education Advocate from 2004 to 2008. At PIRG he worked on issues of textbook affordability including legislation mandating publishers disclose the price of books to faculty. This legislation was included in the College Opportunity and Affordability Act of 2008, which passed earlier this fall. Luke can be contacted at luke.swarthout@gmail.com.

Comments

Textbook pricing

I teach at a Big Ten University, and I fully agree that the price structure of textbooks is totally out of control. But I was hoping to see this writer address the other side of the issue as well. I've been told by publishers that they only have about one year to make a profit on any given textbook, before pirate editions appear online from Asia. I have no idea if this is true or not, but the acquisitions editor I was talking to seemed to be a pretty straight up guy, so it did lead me to wonder if that's what's driving this insane increase in prices.

Textbook pricing is a complete scam!

Sales people but especially publishers have a vested interest in perpetuating their lies and phony reasons for high book prices. The standard one is: the high cost of production and the cost of the authors. They even go so far as persuading some colleges to present a complete (but phony) breakdown of the pricing structure on their bookstore's web site. Unwary student and their parents resignedly accept this hoax of an explanation as fact.

Nothing could be further from the truth as it appears that US college text books can be purchased brand new for less than the price of used text books at US college book stores at www.amazon.co.uk for example.

The same is true of college bookstores in Asia who do NOT pirate US text books but acquire them directly from actual US publishers at SUBSTANTIALLY reduced prices. The operative line her is that books are sold to those stores at "prices keyed to the local market."

Recession or not, damn the poor student seems to be the motto of the publishing cartel which operates much the same way as the oil cartel: hellbent on screwing US customers out of every penny they own and they will do it for as long as the ignorant sheeple continue to buy. The obscene profits in textbook markup should truly be regulated by government. I don't normally advocate government regulation on everything but since it affects EVERY college student and government controls a significant portion of education, it should also control out-of-control and rogue publishers. There is absolutely no need to reprint quality hard-bound books whose contents do not change every two years. Math and history books come to mind, for example. But as long as college professors have the sole reign on selecting college books for their students (for which these instructors never have to pay themselves) rather than the heads of faculty, the bewildering array of different books dealing with the same subject will remain. As will the rip-off pricing scheme.

As a person who works for an

As a person who works for an independent publishing company, I can tell you that we always keep the student's cost in mind when pricing our books (which happen to be some of the lowest around in the Humanities area.)
As to what is left out, is that most publishers sell their books to bookstores and National distributors at a huge discount (btw 30-50%) with Amazon and Barnes & Nobel demanding more. So our list price is not the profit we make on the book, hardly from that.
That is why you can get textbooks cheaper from Amazon and other online outlets. Plus, bookstores, especially college bookstores, offer buy backs at 30% of what the students paid then resell "used" books usually only 20% below a new book price. And none of this money goes to the publisher.
So before you are quick to think that ALL publishers are money-grubbing, all-powerful and scheming companies, remember there are independent presses genuinely out there trying to produce high-quality, innovative and affordable textbooks for students.
Also feed on this: There are only 4 major publishing/media outlets in the world that control over 85% of all (ALL) media (publishing including). Those are the companies to watch out for.

Facts

I am interested in this issue of a possible corner on the textbook market by the big publishing companies. I have a few questions for the previous commenters: Williamp: you stated the following: "The same is true of college bookstores in Asia who do NOT pirate US text books but acquire them directly from actual US publishers at SUBSTANTIALLY reduced prices. The operative line her is that books are sold to those stores at "prices keyed to the local market."" I was wondering if you had a source for this, as I had heard this same point from a friend. RoamingErrapus: you stated the following: "There are only 4 major publishing/media outlets in the world that control over 85% of all (ALL) media (publishing including). Those are the companies to watch out for." Do you have a source for this as well? I would be happy if the two of you could post sources or links to other helpful websites, and continue this thread. THANKS!