A Report on the Feasibility of Textbook Rental - IBHE

January 12, 2007Ms. Judy ErwinExecutive DirectorIllinois Board of Higher Education431 East Adams StreetSpringfield, Illinois 62701-1418Dear Ms. Erwin:The feasibility study of implementing textbook rental programs at Illinois community colleges and publicuniversities conducted by the State presents an oversimplified solution of reducing the cost of textbooks.Renting textbooks only shifts the cost of textbooks rather than providing any true efficiencyimprovements. The concept is risky without compensating reward in that it calls for substantial capitalinvestment in assets (textbooks) that have unstable and rapidly declining values. Hiding the cost oftextbooks in a rental program is not a prudent solution to help the affordability of education in the State ofIllinois.The difference between the purchase price and the sell back price is the true economic cost of using atextbook for any given period of time. There is not an economic savings in this cost by restructuring thepayment to a rental.Renting textbooks requires mandatory adoption periods that are typically longer than existing adoptionperiods. Assuming a three-year adoption period the “book life” is equivalent to approximately an 80%used book ratio. The used book ratio, percentage of used text to total text, is approximately 33% at Tritonand in line with the industry standard. The rental system results in some students using very old editionsand makes the assumption that there is no value in purchasing new books.Mandatory adoption periods do not solve the problems of fluctuating enrollment. Decreasing enrollmentwould require Schools to make risky decisions on either to hold stock or to sell it at wholesale prices.Enrollment increases may even require Schools to purchase old editions. Budget cuts may also putpressure to keep old editions for far to long. Schools might even be “forced” to hold classes based onbooks in stock rather than the needs of the student. There are also additional inefficiencies on collectingbooks back from students and keeping the School’s textbook inventory in good condition for use. Usingoutdated or poor condition learning materials would deprive Students in Illinois of the best possibleeducation.The current used book market is fair in the fact that students typically can purchase used textbooks at 75%of the new book price when they are available, and students typically can sell textbooks to the bookstoreat 50% of the purchase price if the textbook is adopted for the next semester.The potential for savings is in making more used books available to students, and getting students thehighest buy back price from the bookstore. This is best accomplished through a timely adoption processand not by renting or artificially imposed adoption periods.The efficiency savings is produced from getting adoptions in on a timely manner. The report states onpage #40 that “More than 90% of orders received by the [on campus] bookstore come in well past thepreferred due date.” Timely adoptions would allow the bookstore to pay the student the maximum valuefor the book, and increase the number of used text the store can procure from other sources. Buying back-120-