Students may gripe about high tuition costs, but soaring textbook prices are also a source of much anxiety. Even though the University has tried to reduce these costs by offering textbook rentals, the program can only go so far to mitigate the cost burden placed on families while still being financially viable for the bookstore.
About 1,500 members of the National Association of College Stores have enacted some form of a textbook rental program, but a Nov. 6 story in The Washington Post ("College textbook rental pilot not might not be making the grade") suggests these kinds of initiatives may not be as rosy as they seem. Currently, many colleges subsidize their textbook rental options with funds provided by the 2008 High Education Opportunity Act, which offers $8.9 million for programs this year and will offer another $10 million next year for schools to launch pilot rental programs.
But the nature of textbook rental can make it difficult for bookstores to earn a reasonable profit with such programs. The real problem rests with the publisher. Although it is certainly admirable for the University Bookstore to offer alternatives to buying expensive new books, the economics of a rental program make it a suboptimal long-run choice for bookstores - especially given the money games publishers like to play. A bookstore generally must rent out a textbook three times to make a profit, said Charles Schmidt, director of public relations at NACS, but complications arise when textbooks only are used one semester out of the year. In such cases, it would take three years to make a profit from each book and oftentimes by then another edition of the book is available. With these market realities, the textbook rental business becomes something of a gamble.
Apart from the government subsidy, there is no way to encourage compliance with the law without encroaching on professors' academic freedom to select textbooks of their choosing. Currently, there is no stipulation for professors to commit to a particular textbook for a set amount of time, said Jon Kates, executive director of the University Bookstore. Many professors may be unwilling to commit to one version of a text for the time period needed for the bookstore to make a profit, and to enforce such a provision would likely be unpopular among professors who ought to be able to select course materials more freely.
Certainly, offering rental programs may entice students to come into the bookstore rather than buying new or used textbooks from an online vender, which increases the chances that they will make additional purchases. But the nature of textbook pricing means that any effort to diffuse costs will be difficult. When textbook vendors such as college bookstores attempt to reduce the costs of course materials or the quantity purchased, publishers have an incentive to recoup the money in other ways. These companies set prices and determine how frequently new editions are released. They can also use strategies like bundling texts with electronic media or other resources to drive revenue upward.
In the end, rental programs are not a bad deal for many students - generally speaking, the more options available when it comes to purchasing course materials, the better. But such programs do not target the root of the problem: astonishingly high price tags on a number of books. Attempts to legislate away the problem are only moderately effective - even if they are able to pass through congressional gridlock, such laws can cause a host of new problems as incentives change for publishers. It is clear that the impetus for change must come from the demand side of the market:Universities and professors cannot turn a blind eye to the financial burden placed on students and their families from overpriced course materials.
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