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January 25, 2013

College textbook prices outpace inflation

VALDOSTA — It’s no secret that college tuition costs have risen in recent years, but it may surprise you where students’ wallets are getting hit hardest. It’s not housing, health care or even transportation, it’s textbooks.

A 2005 Government Accountability Office report showed that college textbook prices grew twice the rate of inflation from 1986 to 2004. A Bureau of Labor Statistics study reveals that college textbook prices are 812 percent higher than they were a little more than three decades ago, and higher than the inflation of medical services, new home prices and the consumer price index.

The National Association of College Stores reported that the average college student will spend $655 on textbooks each year. However, with a single textbook easily costing as much as $300, that total can be much higher.

“There are many factors when looking for a cause for these increases including the changes in demand and features,” said Bethanie Bass, director of the Valdosta State University Bookstore.

Books that include website study guides, access codes to workbooks, charts, graphics and more will drive up the cost of a single textbook, Bass said.

While special features drive cost, another contributing factor is the issuing of new editions. New editions of textbooks are released on average every 3.9 years, according to the U.S. Public Interest Research Group. This study also found that the revisions submitted by college deans, department chairs and faculty members were often minimal and did not always warrant a new edition.

These new editions not only drive the cost of new books but they also deplete the books’ current values. College students often realize this at the end of the semester when it comes time to sell their no-longer-needed books.

“The buy-back value of a textbook is based on its current demand,” said Bass.

If a textbook has been adopted by a faculty member for the next semester, its value to the VSU Bookstore is highest, Bass said; however, if the book has not been adopted, the bookstore cannot purchase the book at a retail value.

“If a textbook is scheduled for use the next semester, students receive one-half the retail price of a new book of the same title — even though the book they are selling back is used,” said Bass.

Therefore, if a student tries selling a book to the bookstore that will be used the next semester that has a new textbook price of $100, the student will receive $50 at that buyback. If the book is not being used again, the student is usually offered wholesale value of the textbook.

“This value is not under the control of the University Bookstore but is determined by the wholesale company who buys books for their own use,” said Bass. “These companies resell books to other colleges and universities.”

So where does all of that money go? The National Association of College Stores used to receive information from publishers about where textbook money goes, but that reporting has stopped. As recently as 2008, publishers provided a cost breakdown that showed that about 15.4 cents of every dollar went toward marketing the textbooks, 11.7 cents went to the authors, 32.2 cents went toward publishing costs, 1 cent went toward freight expenses, 7 cents went toward publisher income, and 22.7 cents cumulatively went to the costs associated with the college book store (store personnel, store operations, college store income).

“Fiscal year 2012, annual book sales were approximately $4.5 million, which included new and used textbooks, access codes and miscellaneous required course supplies,” said Bass. “Profits from these sales would be derived from all costs related to doing business.”

These costs include the actual cost of all textbooks and materials sold, shipping charges, restocking fees charged by publishers and wholesale companies for returns of unsold textbooks, and shipping charges of returns of textbooks to publishers and wholesale companies, Bass said.

As far as bottom-line pricing, the VSU Bookstore sets textbook prices at set margins using industry standards which are based on the type of book. New textbooks are priced to achieve an approximate 28 percent gross margin — this margin is the difference between what the bookstore pays for the book and its retail selling price — on each sale.

“This margin covers expenses and overhead including employee salaries, bookstore operation, and transportation and shipping,” said Bass. “These are all covered in the gross margin on each sale.”

Bass also noted that the cost of shipping textbooks has increased tremendously with the rising cost of fuel, the VSU Bookstore does not include shipping costs into the price of textbooks.

“This cost is absorbed as a cost of doing business and not passed onto the Valdosta State students,” said Bass.

While the cost of a single textbook has risen significantly during the past three decades, it is a cost that a single college bookstore cannot control.

“The bookstore maintains set margins to meet the cost of operations and services provided; therefore, the price to the student cannot be controlled by the bookstore without endangering the budget,” said Bass.

The VSU Bookstore is self-sustaining and directly contributes to the campus through auxiliary reserves.

“The VSU Bookstore is fully self-operating, which means that all operating expenses are paid out of the bookstore’s budget,” said Bass. “These expenses include the cost of the building, all utilities, maintenance, as well as salaries and benefits of full-time employees and student employees.”

Any profits made by the bookstore becomes part of the university’s auxiliary reserve, which provides necessary funds for various projects on campus that directly benefit VSU students.

“These projects include building maintenance, repairs of residence halls, and student centered areas of auxiliary services,” said Bass.

Students currently have more textbook-procurement options than ever before. They can purchase new or used at their school’s bookstore or online and even rent them. However, despite these options, the rise of textbook prices still rival health care, housing and even the 559 percent increase in tuition and fees during roughly the same period, according to the New York Times.

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