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Textbooks Again the Talk on Capitol Hill 9/22/06
Federal lawmakers are taking another turn at studying the cost of textbooks for higher education and examining ways to make them more affordable for college students. NACS was asked to comment on the issue again during a recent public hearing called by the Advisory Committee on Student Financial Assistance, a nonpartisan panel appointed by Congress to advise it on educational access issues, including financial aid.
The committee, asked by some Congress members to conduct a one-year study on textbook affordability, have until May 2007 to submit its report to Congress.
The study was requested by U.S. representatives David Wu (D-OR) and Howard P. McKeon (R-CA), both members of the House Committee on Education and the Workforce. It was that committee that first brought the national public discussion addressing issues of textbook affordability to Capitol Hill at a hearing in the summer of 2004. Following that hearing, the Government Accountability Office (GAO) began its independent study that produced last summer's highly anticipated report called Enhanced Offerings Appear to Drive Recent Price Increases, which has been widely referenced.
NACS Director of Government Relations Richard Hershman represented NACS at the Sept. 19 advisory committee hearing. His remarks were based on input from the NACS Government Relations Committee and Executive Committee.
Hershman urged the Congressional advisory committee to "ensure that all major stakeholders are at the table on an equal basis in discussing course material affordability and access issues." It is imperative that faculty be a part of the conversation and study, Hershman insisted. He noted that faculty perspective was not included in the GAO report even though it mentioned that "faculty have primary responsibility for determining what students are required to buy."
Patricia S. Schroeder, president and CEO of the Association of American Publishers (AAP) and one of five other panelists invited to address the advisory committee, agreed with Hershman. "Clearly, we need to examine more closely the role of faculty in the decision-making process," she said.
Wu called the textbook industry "a classic broken market" during the hearing. "The professor is making the decision, the publishers and bookstores are setting the prices, and the student has no choice in the product." Wu told the advisory committee that the Committee on Education and the Workforce receives more mail about textbook prices than about any other education issue.
The advisory committee is charged with accomplishing four objectives by next spring:
Shed additional light on the issue of textbook affordability for consumers.
Investigate further the problem of rising textbook prices.
Determine the impact of rising textbook prices on students' ability to afford a postsecondary education.
Make recommendations on what can be done to reduce costs.
Hershman and the other panelists also were asked to comment on a textbook economic impact report prepared beforehand at the advisory committee's request by James V. Koch, an economics professor and former president of Old Dominion University. In the report, Koch recommended a design for the study, strategies the advisory committee should explore, and ways to measure the outcomes.
Some of Koch's recommended strategies for addressing textbook costs included textbook rental programs, providing students with links to online sources that sell course materials, discouraging bundled books, and tax exemptions for higher education textbook purchases.
Hershman told the advisory committee that Koch's report "presents an incomplete and inaccurate picture of the economics of the textbook industry, a lack of understanding of the academic mission and structure of college bookstores, and underdeveloped or faulty assumptions of how various factors impact course material costs."
Hershman said a major disagreement with Koch's recommendations is his study design, which calls for conducting the study and disseminating findings as field hearings are being conducted. The committee should first conduct its study, collect relevant information and perspectives, and then disseminate its findings, Hershman suggested.
In addition, Hershman told the advisory committee it should hold focus groups and round table discussions with stakeholders instead of, or in addition to, regional field hearings proposed by Koch. "Hearings are more structured and less conducive to the type of in-depth conversations and exchanges of ideas and information needed to build a knowledge base and formulate best practices that are scalable," Hershman said.
In order to accomplish the four objectives of the study, Hershman recommended that the advisory committee focus on three important areas:
Determine ways to increase the understanding of what students on average pay for course materials, and recommend ways to improve the collection, the reporting, and the education of stakeholders about the costs.
Do further study on the supplemental materials that were identified by the GAO report as the primary reason for recent price increases in college course materials.
Study how students pay for course materials, what support exists for students, and to what extent the cost of course materials represent access issues for students in need. If such access issues exist, how can they be overcome?
Hershman said the advisory committee members seemed receptive to NACS recommendations. He said they were particularly interested in how custom books are developed and in sales tax exemptions. Currently 18 states offer tax exemption for textbook purchases, and five states don't collect sales tax at all.
Schroeder of the AAP recommended the advisory committee:
Encourage more states to remove sales taxes on textbooks.
End the practice of selling sample textbooks.
Support the production and sale of more electronic books.
Examine the impact that new supplemental materials and instructional technologies are having on student learning and performance, specifically under-served students.
The other panelists were Debra Prescott, senior analyst, U.S. Government Accountability Office (GAO); Valerie F. Lewis, commissioner of higher education, Connecticut Department of Higher Education; and David Rosenfeld, campus program director, Student Public Interest Research Group (PIRG).
In order for the publishers to compete with the wholesalers in buying back used books, they would have to compensate the author for a royalty (each time the book is resold) and protect the commission of their sales force who will lose their profit on the used book sales. That would drive their cost above the level necessary to generate the same profit realized on a new book.
As in all business theories, you have to "follow the money" and look to "the bottom line" to determine feasibility.
It has always been a mystery to me why publishers don't buy back their own books and sell them used. They would have an enormous advantage over the wholesalers because they would know exactly how many books are in circulation, what the demand is, and when the new editions are coming out.
If they did so, I suspect they could easily reclaim a large portion of the total textbook market. If they could sell a substantial number of copies of a title for several years - not just the first year - it would eliminate the need to change editions as frequently and to price books in order to cover all their costs in the first year of sales.
Giving publishers the benefit of the doubt, I suspect there are legal obstacles to this practice. If so, these should be examined. I am unsure that publishers would lower their prices in any case, but that is another can of worms.
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