Presented by: Tom Bauer, Director, SMCCCD Bookstores

1. Current Textbook Issues: SMCCCD Bookstores Efforts to Provide Lower Cost Textbook Options for Students Presented by: Tom Bauer, Director, SMCCCD Bookstores SMCCCD Board of Trustees Study Session January 11, 2006

2. What Topics Will We Cover Today? • Textbook Affordability and Access • GAO and CalPIRG RIPOFF 101 Reports • SMCCCD Bookstores and College Initiatives • SMCCCD Bookstores Textbook Rental Program • Next Steps

3. Course Material Affordability Policy Landscape • Noticeable increases in college costs in tuition, fees, and college textbooks. • State budget cuts for higher education. • Federal student aid funding not keeping up with need. • Students more dependent on federal loans.

4. College Board 2005 Report

5. College Board Textbook and Supply Costs 2004-2005 to 2005-2006 • Average College Tuition and Fees • At two-year public, tuition and fees average $112 more than last year, a 5.4 percent increase. • At four-year public, tuition and fees average $365 more than last year, a 7.1 percent increase. • At four-year private nonprofits, tuition and fees average $1,190 more than last year, a 5.9 percent increase.

6. Annual Percentage Increase in College Textbook Prices, College Tuition and Fees, and Overall Price Inflation, December 1986 to December 2004

7. Course Material Affordability Policy Landscape (con’t.) • The growth of non-traditional students and changing student expectations. • Increased sophistication and organization of student advocacy groups (CALPIRG). • Changes in the book publishing and retail industry are in the news.

8. COURSE MATERIALS FEDERAL EFFORTS

9. Why GAO Conducted The Textbook Pricing Study? • In March 2004, 15 Members of Congress requested the GAO study textbook pricing. • Given that nearly half of undergraduates receive federal financial aid, Congress is interested in the overall cost of attendance, including the cost of textbooks.

10. Why GAO Conducted This Textbook Pricing Study? • The stated objectives of the study were to examine: • what has been the change in textbook prices, • what factors have contributed to changes in textbook prices, and • what factors explain why a given U.S. textbook may retail outside the United States for a different price.

11. What was GAO’s Methodology? • Examined data from the U.S. Department of Labor’s Bureau of Labor Statistics’ Consumer Price Index to determine how textbook prices have changed over time. • Examined data from the U.S. Department of Education’s Integrated Postsecondary Education Data System (IPEDS) to gain an understanding of the estimated cost of textbooks for first-time, full-time college students.

12. What was GAO’s methodology? • Interviewed representatives of NACS, AAP, publishers, wholesalers, and student advocacy groups like CalPIRG.

13. What GAO Found Pricing: • In the last two decades, college textbook prices have increased at twice the rate of inflation but have followed close behind tuition increases. • Increasing at an average of 6 percent per year, textbook prices nearly tripled from December 1986 to December 2004, while tuition and fees increased by 240 percent and overall inflation was 72 percent.

14. What GAO Found Pricing: • The cost of textbooks, as well as supplies, as a percentage of the “published price” of tuition and fees varies for first-time, full-time, degree-seeking students by the type of institution attended: • 72% at 2-year public institutions • 26% at 4-year public institutions • 8% at 4-year private institutions

15. What GAO Found Supplemental Materials: • While many factors affect textbook pricing, the increasing costs associated with developing products designed to accompany textbooks in bundles, such as CD-ROMs and other instructional supplements, best explain price increases in recent years.

16. What GAO Found Supplemental Materials: • Publishers say they have increased investments in developing supplements in response to demand from instructors. Wholesalers, retailers, and others expressed concern that the proliferation of supplements and more frequent revisions might unnecessarily increase costs to students by negating buyback opportunities.

17. What GAO Found International Pricing: • U.S. college textbook prices may exceed prices in other countries because prices reflect market conditions found in each country, such as the willingness and ability of students to purchase the textbook. • While geographical barriers have historically limited the reentry of textbooks intended for international distribution back into the United States, known as reimportation, recent advances in electronic commerce have broken down this barrier.

18. GAO Study: Impact on College Bookstores • GAO consistently reported that college stores were concerned about students and made efforts to make course materials affordable for students. • The study will hopefully spur additional research, influence campus and system policies, or frame the basis for future state/federal legislation. More broadly, the study may affect the nature of the debate about the cost of textbooks and how stakeholders should react to those costs.

19. GAO Impact on Federal Legislation • H.R. 609 The College Access and Opportunity Act of 2005 • H. R. 495 — Sponsored by Representative Tim Ryan, (D-OH). The College Textbook Tax Credit Act of 2005 • H.R. 625 — Sponsored by Representative Dave Camp (R-MI); S. 1697 — Sponsored by Senator Gordon Smith (R-OR). • H.R. 1380 — Sponsored by Representative Phil English (R-PA). The Higher Education Affordability and Equity Act of 2005 • S. 1677—Sponsored by Senator Charles Schumer (D-NY)

20. COURSE MATERIALS STATE EFFORTS

21. State Course Material Legislation and Policy • 38 college course material bills or studies in 17 states are under consideration or acted on (as of 10/30/05). • State studies in Connecticut, Georgia, Illinois, North Carolina, and Virginia (West Virginia to review GAO report). • State policies in one state may have the potential to impact other states or the nation. • Most proposals are not well researched or lack engagement of college store industry stakeholders.

22. 2005 State Higher Education Textbook Legislation and State Studies Textbook Legislation and State Studies* *State studies have been completed or underway in CT, GA, IL, NC, VA, and WV. No Action as of 10/25/05

23. 2005 State Sales Tax Exemptions for College Textbooks No Exemption Existing Sales Tax Exemption (16) or No State Sales Tax (5) 2005 Proposed Legislation 2004 Proposed Legislation 2005 State Sales Tax Exemptions For College Textbooks ? as of 10/31/05

24. State Course Material Legislation and Policy (Cont.) Types of Legislation/Policy: • Mandate and regulate college course materials by: • how they are adopted (including faculty ethics). • how they are packaged. • how they sold or delivered. • disclosing pricing, adoption lists and other information on course materials. • Encourage, but not mandate: • Same as above items. • Promoting rental programs. • Convening task groups/study/policy recommendations. • Adjusting education tax and student aid policy. • State Buying Power Leverage (Maryland HB 70 and Illinois).

25. California Leads The Way • CALPIRG Rip Off 101, 101 2nd edition, Textbook Rental Guide, and bundling campaign. • AB 2477 -Law. • AB 2678 (rental) -Vetoed. More to come… • A Return to the Rental Debate? • Adoption Lists? • Copycat other states? • State Buying Power Schemes.

26. CalPIRG RIPOFF 101 Findings • The most widely purchased textbooks on college campuses have new editions published every three years, on average. • New editions of the textbooks surveyed cost, on average, 45 percent more than used copies of the previous edition. • When issuing new editions, most publishers raise the prices of their books. Of the textbooks surveyed, new textbook prices jumped 12 percent on average between the previous and current edition, almost twice the rate of inflation between 2000 and 2003 (6.8 percent). • Three-fourths (76 percent) of the faculty surveyed in our 2004 report said that they found new editions justified only “half the time” or less.

27. CalPIRG RIPOFF 101 Findings • Half (50 percent) of the textbooks in the survey were sold “bundled,” or shrink wrapped with additional instructional materials such as CD-ROMs and workbooks. • When a bundled book is available for purchase unbundled (without the add-on materials), the bundled book is, on average, 10 percent more expensive than its unbundled counterpart. Some bundled textbooks are substantially more expensive. For example, a Thomson Learning chemistry textbook was 47 percent more expensive bundled ($223.75) than when sold as a separate textbook ($152.00). • More than half of the bundled textbooks surveyed (55 percent) were not available for students to purchase a la carte, in which the textbook is available without the add-on materials. • Two-thirds (65 percent) of the faculty surveyed in our 2004 report said that they used bundled items “rarely” or “never”.

28. CalPIRG RIPOFF 101 Findings • The average textbook surveyed costs 20 percent more in the United States than it does in the United Kingdom. • Some textbooks were dramatically more expensive in the United States than in the United Kingdom. For example, Pearson’s Calculus textbook, selling for about $100 in the U.S., costs only $38 on the U.K. Amazon.com website, just one third the price. Freeman’s Chemical Principles textbook, priced at $185 in the U.S., is available in the U.K. for only $88—half the price. • Some publishers display overseas prices on their websites. For example, Thomson Learning’s website lists the prices charged to students in the U.S., U.K., Europe, Africa, and the Middle East. According to this website, for the books included in our survey, Thomson Learning charges U.S. students 72 percent more, on average, than it does students in the U.K., Africa and Middle East. Some books are priced even higher. For example, Thomson Learning charges U.S. students $108 for its Biology textbook, but charges students in the U.K., Africa, and Middle East only $51 for the same book.

29. CalPIRG RIPOFF 101 Recommendations • Produce and price textbooks to be as inexpensive as possible without sacrificing educational value. • Produce new textbook editions only when educationally necessary. • Offer faculty and students the option to purchase textbooks unbundled. • Provide faculty with more information on the company’s textbook materials, prices, intended length of time on the market and substantive content differences from previous editions.

30. AB 2477 – Liu. Postsecondary education: production and pricing of college textbooks. California Association of College Stores

31. COURSE MATERIALS SMCCCD BOOKSTORES AND CAMPUS ACTIONS

32. SMCCCD Bookstores Staff ARE the Experts on Textbook Issues • Monitor what things are being said by education officials (legislators, state boards, secretaries of education) and key stakeholders within our own community. • We begin the dialogue. We communicate our value, business model, and openness for feedback to your key stakeholder's. The Bookstore’s staff ARE the experts. • Understand the potential impact of policy proposals to the SMCCCD community, convey that information as appropriate to the proper individuals: president’s office, VPI, VPSS, faculty, staff, students and administration.

33. What have the Bookstores done with the GAO and CalPIRG reports? • Talk with others—convene or participate in meetings with key stakeholders on campus regarding the report and the larger issues of textbook value and pricing. • Explain how the GAO and CalPIRG study provides an independent and unbiased examination of textbook costs. • Highlight how the report consistently found that college stores are concerned about students and the academic mission of the institutions of higher education that college stores serve.

34. What have the Bookstores done with the GAO and CalPIRG reports? • We use the report to help explain the process of textbook adoption, the evolution of course materials, the role of the store, and how our role in the adoption process supports the stakeholders and provides value. • We discuss how our stores currently support the goal of making a college education more affordable and how the store works every day to find ways to reduce cost for students.

35. SMCCCD Bookstores Actions • Used Textbooks become a District wide focus in 2004. • Used Textbook Sales Increased $464,090 from 2003 to 2005; an increase of 27%. • Used Text Sales Increased due to Bookstore and Faculty Collaboration. • The Faculty Stepped Up! • On Time Book Orders up from 63% at due date in ’03 to 88% in ’05!

36. Bookstores Used Text Sales Increases 2003-2005

37. SMCCCD Bookstores Actions • Bookstore Management Team attends all DASAC meetings to report to students and respond to concerns. • Bookstore Management Team attend Division meetings to talk about textbook issues and how they impact students and student success. • CSM Bookstore donates 1 copy of each major textbook to Library for students use free of charge.

38. SMCCCD Bookstores Actions • Work with publishers to purchase unlike textbooks as a bundle at a reduced cost. • Aggressively seek out lower cost textbook editions; paper binding, abridged versions, custom editions, loose-leaf editions, B&W. • Sponsored the first Publisher Fair in Nov ’05 for publishers to market lower cost textbook options to SMCCCD Faculty at all campuses.

39. SMCCCD Bookstores Actions • Actively source used textbooks from as many as 6 used textbook wholesale companies. • Actively source used textbooks from non-traditional sources such as Amazon.com. • Actively work with faculty to extend length of use as well as review excessive supplemental materials packaged with textbooks.

40. Bay 10 Bookstores Consortium

41. Bay 10 Bookstores Consortium • In the past few years, college bookstores in the San Francisco Bay Area have taken several steps to help contain students’ costs by working with faculty and publishers on our individual campuses. Several success stories are heard. The BAY 10 BOOKSTORES group hopes to move these efforts further, in order to achieve greater savings, by combining enrollments and creating selling terms which will induce publishers to offer lower prices.

42. COURSE MATERIALS SMCCCD CAMPUS ACTIONS

43. Campus Actions • Cañada President’s Textbook Scholarship raised $52K last year for text scholarships. The fund helps fill in where state and federal aid has fallen short. Committee of community leaders actively raise funds. The fund received an anonymous donation of $25K in September 2005 that went directly to provide textbooks for needy students who would not otherwise have one.

44. Campus Actions • Bridge for Success Program at Cañada College is funded by a community leader and friend on Cañada College. Students with extraordinary financial needs are referred to Financial Aid Office for assistance. The program currently funds textbook needs for students that “fall between the cracks” or are in extreme need. These books are rented to the students and the rental fees covered by the fund.

45. Campus Actions • Partnership with Sequoia Board funds the Sequoia Allied Health Book Grant at Cañada College. A $15K grant through the SMCCCD Foundation provides textbook scholarships to Allied Health and Nursing Students who demonstrate financial need not met by “standard” funding sources.

46. Campus Actions • Financial Aid Offices at all three colleges work tirelessly in cooperation with the Bookstores to identify students with additional financial need not met by current sources. All involved strive to ensure that students do not go through class without a textbook.

47. INNOVATION • WHAT MORE CAN THE BOOKSTORES DO TO PROVIDE ANOTHER LOW COST TEXTBOOK OPTION TO STUDENTS?

48. Excerpt from CALPIRG’s “Ripoff 101” • Colleges and universities should consider implementing rental programs similar to those at several universities in Wisconsin and Illinois. Students would rent books similar to the way they are shared in K-12 but the students would pay a fee that covers the cost of the books.* *CALPIRG RIPOFF 101 January 29, 2004

49. SMCCCD Textbook Rental Program • Jai Kumar, manager at Cañada Bookstore, partners with Professor Diane Eyer from the ECE program at Cañada to create the first textbook rental program in the District. • Textbooks rent to students for 25%-30% of their new price. • $100.00 Textbook rents for between $25.00 and $30.00 for semester.

50. Benefits of a Rental Program • Savings to students---significantly reduced initial investment. • Saving in freight---Bookstores do not have to continually reorder books semester after semester. • Campus community sees the bookstore as actively seeking solutions regarding textbook prices.