A textbook case of economics

LINCOLN — Freshman Alex Bullington has gotten into the swing of college life.

Studying. Eating fast food. Hanging out at the student union. Never having enough money.

But it's the cost of textbooks that throws the 19-year-old biology major from Grand Island, Neb., for a loop.

Books and supplies for two basic second-semester courses at the University of Nebraska-Lincoln — Biology 102 and Chemistry 110 — rang up $500 on the cash register.

And even though Bullington is an honors student, with a Regents Scholarship to cover his tuition and a $250 stipend for books, he had to dip into his savings from summer jobs to pay his textbook bill.

“Ouch!” he said, widening his eyes and smiling weakly.

Books for college have never been cheap. But the textbook industry now is in a state of flux. Prices for hardcover textbooks are rising at a gallop, some jumping by $20 to $30 a year.

Students are flocking to the Internet to find bargain books — buying them, selling them, even renting them from online sources.

To keep up, publishers and traditional bookstores are offering their own online products and rental services.

Hendrik van den Berg, a UNL economics professor and textbook author, said he has noticed a distinct shift in his students' book-buying behavior.

More students simply go without textbooks. Some will share a book with a classmate.

Instead of meekly heading to a bookstore to buy materials designated by their professors, some purchase through used-book venues on the Internet. Then, at the end of the semester, they offer their books for sale on eBay or Amazon.com, seeking a better price than they could get from a bookstore.

One popular book rental service, Chegg.com, came into existence after students at Iowa State University in Ames started an online site for buying and selling textbooks.

Co-founder Aayush Phumbra, a 2004 ISU graduate, said the company's goal is to provide books at the lowest possible cost to students. Rentals have proved the best way to do that.

“People are renting DVDs and they are renting tuxedoes,” Phumbra said, “so why not rent textbooks?”

Chegg.com offers 4.2 million textbook titles to students at 6,400 schools. Phumbra said a book's rental price is significantly lower than the cover price.

Many bookstores in Nebraska and Iowa are rolling out their own book rental programs.

Nebraska Book Co., which operates 285 college bookstores nationwide, began offering book rentals at about 100 of its off-campus stores this semester, including stores serving UNL, the University of Nebraska at Kearney and Wayne State College.

Follett Higher Education Group, the nation's largest bookstore provider, is offering rentals at 27 stores this semester and gearing up for rentals at all of its 840 U.S. stores by fall.

Follett's 16 stores in Nebraska and Iowa — including on-campus stores at UNL and UNK, Creighton University, Bellevue University and Metropolitan Community College — will be among those renting books by fall.

Iowa State University, which runs an independent bookstore, obtained a federal grant to develop a book rental program, to be kicked off this fall.

Book publishers aren't being left behind. Some are developing their own online rental programs. They're also increasingly turning to downloadable books — a much cheaper alternative for those who don't mind reading from a computer screen.

Cengage Learning sells some textbooks chapter by chapter from its Web site, CengageBrain.com. The average price is $3.99 per chapter.

Meanwhile, brick-and-mortar bookstores are highlighting their role as “one-stop” shops where students can buy all their course materials, from textbooks to lab books to computer access codes for online study guides.

“We guarantee that students have the right materials for the right class: the supplemental materials, the customized materials, the lab supplies that you may not be able to find through an online vendor,” said Amy DeLashmutt, marketing director for University Bookstore in Ames.

“They can walk in at the last minute and get them and not pay any shipping,” said Michael Schmidt, UNO Bookstore manager. “When they drop the class and want to get rid of the books, we're here to give them a refund.”

Book rentals can be a dicey endeavor for stores, which have to buy high-dollar inventory from publishers and then gamble that the books can be rented frequently enough to pay off before they go out of date.

The UNO Bookstore has no plans to offer book rentals, Schmidt said. Operated independently by UNO, the bookstore sees too little repeat use of texts for rentals to be profitable.

Nebraska Bookstore offers rentals on about 20 percent to 30 percent of its book list — titles deemed most likely to get repeat use, said Tom Van Sant, vice president of retail administration for Nebraska Book Co., which operates the Nebraska Bookstore.

“If we think we can rent it a second or third time, it's much more attractive to rent the book,” Van Sant said.

Book rental is not for every student. Several interviewed said they would go the rental route only if the store was out of cheaper used editions. Others said they prefer to keep their books for future reference, or to sell them.

Book vendors said they can't explain why textbook prices are rising so high.

“Over the past five years, publishers have been raising their prices at about twice the rate of inflation,” Van Sant said. “I don't know why. The costs of paper haven't increased that much. Production costs haven't increased that much. Publishers are looking for a way to make money.”

Van den Berg, the UNL economics professor, said textbook publishing has been consolidated in the hands of a few international companies. Publishers don't make money when used books are sold, so they compensate by printing fewer textbooks and charging higher prices.

But a Cengage official said publishers are printing as many textbooks as ever.

Publishers incur higher costs today because they have to train faculty to use the high-tech products that college students now demand, said Stephen Hochheiser, Cengage's vice president of college store and public affairs.

“When I was a student, there were not a lot of options,'' Hochheiser said. “We weren't the audience for marketing from the time we started breathing until the time we went to college.”

Bailey Andersen, a sophomore business administration major at UNL, said she trimmed more than $200 from her book bill by renting textbooks from Chegg.

As an author, van den Berg winces at the lost royalty income. But as an economics professor, he said, he can only applaud students' savvy.

Van Sant said the most economical route remains buying a used book and selling it back to the bookstore at the end of the semester. But renting requires the least cash upfront.

“I think this is going to be popular for the student who is short of cash today,” he said. “It's like when you rent a washing machine because you can't afford to purchase one.”

World-Herald staff writers Caitlin Kern, Travis Beck, Dave Houfek and Kate Veik contributed to this report.

Contact the writer:

402-473-9581, leslie.reed@owh.com

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