Part 1 of 2: Why doesn’t this happen?

If all required learning materials, including textbooks, were provided to all students on or before the first day of class, the average price per student of learning materials would drop and students would be more successful.

Then why do the vast majority of college students come to class without the required content on the first day of class, and a significant number never get their core textbooks at all?

First, because required doesn’t actually mean required in higher education. Is this because colleges and faculty do not care about the success of students? Of course not. Ask any academic leader on a college campus if students would be better off if they had all required learning materials and the answer will be a resounding, YES. Faculty spend valuable time planning their courses and choosing resources; however, in the end, after all that work, most institutions and most professors are willing to leave it up to the student whether or not they actually acquire and engage with the content. The actual content domain to be mastered in the course is, astoundingly, practically the only thing left to the whims of student choice. It is absolutely required that all dental students MUST have an articulator for class (an instrument for studying tooth and jaw). You cannot pass, you cannot even come to class, without one. But is it absolutely required that students possess the material detailing the various bones, muscles, nerves, and tendons involved? It is not.

Traditionally, little thought was given to the price of the resources or whether the students will purchase them. Why didn’t professors pay attention to price if they are so carefully choosing these resources? One reason is that resources used to be reasonably priced and another is that professors don’t have to pay for the content. Economists call this the Principal Agent Problem, meaning that the decision-maker (agent/faculty) is not the one affected (principal/student). This doesn’t mean that faculty don’t care about the price of textbooks, it is simply that it has not been the predominant factor in their equation for determining course materials. Certainly some instructors care strongly about cost, but the means they use to address the problem—think third-generation scans of articles, not properly licensed, or two copies of a book in the library for a class of 400 students—reduce the quality of instruction and are in the long term not effective against cost.

What is preventing all colleges and universities from including course materials in the cost of the course given that it is guaranteed to cut student costs of learning materials and increase student success?

Ironically, one reason is that academic leaders are sensitive to the perception of adding any cost tied directly to the institution. The cost of tuition has more than doubled (measured in constant dollars) over the past 30 years and institutions are reluctant to be perceived as increasing student costs. However, students spend an average of $1300 per year on textbooks and supplies alone. That's the equivalent of 39 percent of tuition and fees at a community college, and 14 percent of tuition and fees at a four-year public university on average. Including textbooks in tuition could save students at least $800 per year, a more than 60 percent reduction in cost.

Rather than consider the total cost of education, which includes required learning materials, it is easier to give students a list of “required materials” and leave that decision-making to them on how, when or whether, they get them. While conveniently allowing institutions to wash their hands of the costs of course materials, this model has directly led to the massive increase in cost of learning materials: an 82 percent increase in the cost of textbooks over the last 10 years. This number is more than three times the rate of inflation.

How can this be? The economics are simple. Education publishers invest tremendous resources into the creation of textbooks working with experts in the field – often leading professors – to author, curate, organize and deliver content and assessments in a package designed to facilitate learning. They then sell this print book into the market to students through a variety of channels including student bookstores and online sellers. However, unlike the food these same students may have purchased, that book does not get consumed and most students sell this book back into market. Sure, some students do keep for future reference and I do have a section on my personal bookshelf dedicated to titles from my formal studies. However, a quick review of that shelf will find that most of these were actually used when I purchased them.

The other issue here is scale. A textbook, regardless of how widely adopted, has a limited market. A New York Times bestseller has to hit an average of 9,000 copies a week to make the list. That is about 500,000 books a year. For a book to reach Amazon’s top seller list, that number is about 3,000, which equates to approximately 150,000 copies a year. A college textbook would be lucky to sell one-tenth of that number, concentrating the development cost across fewer anticipated sales.

This textbook, for which the publisher received revenue one time, may then be resold another six times without the publisher receiving any revenue. Making matters worse, rental textbook programs have grown significantly over the past five years as well, reducing the sell through of “new” titles even further. As a result, publishers have to maximize the price of their initial sale to cover the lost sales. It also reduces the number of years between new editions, since a new edition represents another opportunity for publishers to make a sale again before that title enters the used and rental markets.

When publishers sell new textbooks at absurdly high prices, it is easy to make them out to be the greedy villain in this story. However, publishers are just responding to the economic realities of their business and they are ready to participate in this solution.

Join us next week when we discuss the right solution to this problem.