Ripoff 101 2Nd Edition

State Public Interest Research Groups RIPOFF 101: 2nd Edition How the Publishing Industry’s Practices Needlessly Drive Up Textbook Costs A National Survey of Textbook Prices February 2005 Page i ACKNOWLEDGEMENTS Written by Kate Rube, Higher Education Advocate with the State Public Interest Research Groups (PIRGs), with contributions from Merriah Fairchild, Higher Education Advocate with the CALPIRG Education Fund. © 2005, State Public Interest Research Groups The author would like to thank the following people for reviewing this report and offering their comments: Robert Shireman, Student Loan Watch; Erwin Cohen, former publishing executive; George Blumenthal, Chair, University of California Statewide Academic Senate; Jerry S. Davis, higher education consultant; Barmak Nassirian, American Association of Collegiate Registrars and Admissions Officers; Roger Bowen, American Association of University Professors; Thomas Wolanin, The Institute for Higher Education Policy; and Edward Elmendorf, American Association of State Colleges and Universities. For more information, contact the State PIRGs’ Higher Education Project at: State PIRGs 218 D Street SE Washington, DC 20003 (202) 546-9707 Additional copies of the report can be obtained by visiting www.pirg.org/highered. Page ii TABLE OF CONTENTS EXECUTIVE SUMMARY............................................................................................................ 1 INTRODUCTION ........................................................................................................................ 4 SURVEY FINDINGS.................................................................................................................... 7 POLICY RECOMMENDATIONS............................................................................................ 10 METHODOLOGY...................................................................................................................... 12 END NOTES ............................................................................................................................... 14 Page iii EXECUTIVE SUMMARY In January 2004, the State Public Interest nearly half of the tuition and fees of two- Research Groups (PIRGs) released Ripoff 101, year public colleges and a fifth of the a report documenting the high price of amount that in-state students would pay for college textbooks. Ripoff 101 surveyed tuition and fees at four-year public colleges popular textbooks at 10 public colleges and this year. universities on the West Coast and detailed the gimmicks publishers use to artificially Key findings from this survey include: inflate the cost of textbooks. The report sparked extensive media coverage, a call to Textbook prices are increasing at a fast rate. action from hundreds of faculty members around the country, a congressional Textbook prices are increasing at more investigation, and government action in a than four times the inflation rate for all number of states, including California, finished goods, according to the Bureau Connecticut and Illinois. of Labor Statistics Producer Price Index. The wholesale prices charged by In order to both confirm our initial findings textbook publishers have jumped 62 and to follow up on a number of anecdotal percent since 1994, while prices charged reports of additional problems with textbook for all finished goods increased only 14 pricing, the State PIRGs conducted an percent. Similarly, the prices charged by expanded survey of the most widely publishers for general books increased purchased textbooks at 59 colleges and just 19 percent during the same time universities across the country. The 2005 period. survey also looked at a number of industry practices not featured in the 2004 report. New textbook editions are costly and limit Overall, the expanded survey uncovered the availability of used textbooks. more evidence that textbook prices are a significant part of college costs, that textbook The most widely purchased textbooks on prices are rising at a fast pace, and that college campuses have new editions publishers use a variety of tactics to inflate published every three years, on average. the cost of textbooks. In addition, we found that textbook publishers increase textbook New editions of the textbooks surveyed prices faster than the rate of inflation cost, on average, 45 percent more than between editions and charge American used copies of the previous edition. students more for the same books than students in other countries. When issuing new editions, most publishers raise the prices of their books. As higher education costs continue to Of the textbooks surveyed, new textbook skyrocket for American students and prices jumped 12 percent on average families, the price of college textbooks between the previous and current represents a serious part of the affordability edition, almost twice the rate of inflation equation. The average student will spend between 2000 and 2003 (6.8 percent). nearly $900 each year purchasing textbooks, Ripoff 101: 2nd Edition 1 Three-fourths (76 percent) of the faculty United Kingdom. For example, surveyed in our 2004 report said that Pearson’s Calculus textbook, selling for they found new editions justified only about $100 in the U.S., costs only $38 on “half the time” or less. the U.K. Amazon.com website, just one- third the price. Freeman’s Chemical Principles textbook, priced at $185 in the Bundling drives up textbook costs. U.S., is available in the U.K. for only $88—half the price. Half (50 percent) of the textbooks in the survey were sold “bundled,” or shrink- Some publishers display overseas prices wrapped with additional instructional on their websites. For example, materials such as CD-ROMs and Thomson Learning’s website lists the workbooks. prices charged to students in the U.S., U.K., Europe, Africa, and the Middle When a bundled book is available for East. According to this website, for the purchase unbundled (without the add- books included in our survey, Thomson on materials), the bundled book is, on Learning charges U.S. students 72 average, 10 percent more expensive than percent more, on average, than it does its unbundled counterpart. Some students in the U.K., Africa and Middle bundled textbooks are substantially East. Some books are priced even more expensive. For example, a higher. For example, Thomson Learning Thomson Learning chemistry textbook charges U.S. students $108 for its Biology was 47 percent more expensive bundled textbook, but charges students in the ($223.75) than when sold as a separate U.K., Africa, and Middle East only $51 textbook ($152.00). for the same book. More than half of the bundled textbooks surveyed (55 percent) were not available This report is a renewed call to the for students to purchase a la carte, in publishing industry to reform its practices. which the textbook is available without Publishers should: the add-on materials. Produce and price textbooks to be as Two-thirds (65 percent) of the faculty inexpensive as possible without surveyed in our 2004 report said that sacrificing educational value; they used bundled items “rarely” or “never”. Produce new textbook editions only when educationally necessary; Textbook publishers charge American Offer faculty and students the option to students more than students overseas for purchase textbooks unbundled; and the same textbooks. Provide faculty with more information The average textbook surveyed costs 20 on the company’s textbook materials, percent more in the United States than it prices, intended length of time on the does in the United Kingdom. market and substantive content differences from previous editions. Some textbooks were dramatically more expensive in the United States than in the Ripoff 101: 2nd Edition 2 In the past year, students, faculty and a accessibility of previous editions secondary number of state legislatures have asked the only to educational value when selecting publishing industry to adopt these books for their courses. Finally, students recommendations formally into their and universities should help make used business practices. To date, the publishing books available by sponsoring on-campus industry has refused to do so. and online bookswaps, campus rental programs and other means. In addition, we recommend that faculty use their decision-making power to demand substance over bells and whistles and consider cost and the viability and Ripoff 101: 2nd Edition 3 INTRODUCTION The benefits of affordable higher education unmanageable levels of debt, meaning that are numerous, both to individuals and our their monthly payments are more than eight society as a whole. College graduates will percent of their monthly incomes.4 earn 73 percent more income annually than typical high school graduates, generating In addition to borrowing, many students higher tax revenues on a local, state, and must work long hours to finance their national level. Individuals who pursue education. According to a survey conducted higher education are also more likely to by the State PIRGs, nearly half of all full- have higher levels of civic engagement, time working students are employed including voting and volunteer work.1 enough hours to hurt their academic achievement and the overall quality of their Despite its value to society, higher education. At the same time, the majority of education is becoming increasingly these students (63 percent) reported that unaffordable for American students and they would not be able to attend college if families. State

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