The Myths of Skyrocketing Textbook Costs

So much hand-wringing, so many academics and politicians vowing to solve the problem, so little reality check.

In 1987, my final year at Dear Old Wabash, my final year of tuition, room & board, plus mandatory fees was $10,000, give or take a few hundred. This year, the 2007-2008 cost 20 years later will be $33,550. That's a whopping 235% increase over 20 years. That's a tidy 6.24% compounded annual increase. That's of course in line with most studies of runaway college costs lately and in line with college costs rising more than twice the annual rate of inflation. In fact, if college costs had risen exactly with inflation costs for the last 20 years, that 10 grand at Dear Old Wabash in 1987 dollars would "only" be costing $18,400 in 2007. A not insignificant savings of $15,000 over reality.

So in 1988 when I left 'Bash for "the real world" my first stop was in college textbook publishing. At the time, the "average" business statistics book retailed for $50. Today, that same typical business stats book will set you back $140. That's about a 5.57% compound annual growth rate over 19 years. Still ahead of inflation. If that $50 book had increased price at the rate of inflation, it would cost about $90.

If college cost increases had actually been held down to the book rate of 5.57%, that $10k of Wabash education would "only" be costing you $29,700. That's a $4000 per year savings over reality.

So yes, while both college and textbook costs are rising faster than inflation, and certainly faster than my wages or those of anyone I know, if you want to do something real about the money being stolen from you to pay for the cost of entry for your kids into the "real world," attack the elephant in the room that costing you $4000-$15,000 a year over what "the real world" says it should. The few hundred a year you might save if textbook costs were held down to inflation rates are chump change in this equation, or beer money for our beloved, departed Tommy's Silver Dollar Saloon.

Sidenotes:

• College textbook publishers are not subsidized by billions of dollars in state and local grants (our tax money) the way colleges are. There's another hidden cost that further separates the rate of growth of college costs from college textbooks
• College textbook publishers are not endowed by gifts from graduates, gifts that for colleges fortunately mask their real expenditure growth from students and parents
• Colleges don't have to fight an expensive used textbook market that cuts textbook sales to less than half the number of students enrolled in a class for a book used 3-4 years. Imagine if at the end of the semester, a student could resell their 3-hour intro to psych class ("I'm never using that again!"). That's 1/5 of the usual student load, tuition alone at 'Bash is $26 large, a student would pay say 1/2 price for a "used" intro to psych class ("B+ intro psych education, barely used, aisle seat near the back") so the incoming student pays $2500 to the selling student and the college is out $5k. I'll bet the college would have an answer to the "used" education market if it hit them the way it does publishers

Disclaimer: Working for Wiley, I have some fairly obvious interests in textbooks. I don't work in the textbook division, although some of our Wrox books are used as texts in many CS courses and programming skills classes at a variety of schools. But, trust me, you can be sure I had these opinions about the real drivers in bankrupting parents and students LONG before I came to Wiley.

Comments

[Joe Wikert]

Hi Jim. Excellent observations. The related post I made on my blog wasn't about the price but rather the questionable tactics used by the schools and stores. I found it interesting that Purdue's website provides every detail you could imagine about every course...except info about the required textbooks. When I asked Purdue about this I was told that this information is indeed nowhere to be found on their site and that "the textbooks are handled thru the campus book stores."

What an interesting way for a major university to duck a question! The bookstores don't *decide* what texts are required and which ones aren't; that's the job of the professor/school. So why doesn't the school provide this info on their website? There's no good answer for this, and as a parent and taxpayer (sending my kids to a state school), I'm outraged.

[Jim Minatel]

Right you are Joe, your post was actually one of the few I've seen that didn't scream about "doing something" about textbook costs AND simulaneously nodded to the real culpit, tuition/room and board. I should have pointed that out when trackback linking to you. It was actually your comment

"can't they find a way to fund their budgets with these skyrocketing tuition rates?!"

that got me thinking to do the quick math on just what the different rates of "skyrocketing" are.

[Tim Wohlford]

Jim --

One wonders what the mechanism will be that will force cost cuts on colleges. My local community college raised their tuition by 7-8% each of the past 3 years, and now they've got record enrollment. It's like wine prices - everyone assumes that the lower the price, the lower the quality, and the higher the price,the better the experience.

[Terry]

The cost of college is getting worse every year, and textbooks are way to expensive. The average student coming out of college is over $120,000 in debt. Not to mention that 50% of all students have to drop out of college because they can't afford it. If you want to have a financial advantage with college funding, then you need to do one of two things. 1. See a college funding specialist, or 2. Do your research. Since there are 153 tax codes on the college years alone, I would recommend seeing a specialist. If you want to try to do it on your own, then click on my name to get the book "Cash For College." It gives you the insider secrets on college funding. If you want to meet with a specialist, then the author of the book is Daniel Wansten, he is the nation's foremost leader in college funding, and he can take care of you in no time.