A Report on the Feasibility of Textbook Rental - IBHE

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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-
more used books benefits both the bookstore and the students. This does not limit academic freedom, orrequire the State to float multimillion-dollar revenue bonds. Schools making decisions on which booksthey will adopt in a timely manner best achieves the goal of producing cost-savings to students.In response to the sales tax savings shown on page #39 of the report, it would be far more prudent toexempt textbooks sales from sales tax rather than restructuring the sale to a rental program to avoidpaying the sales tax.Profitable bookstore operations result in funding the School’s overall mission. Changing from selfsufficientbookstore to a subsidize rental bookstore would just use funds from other operations withoutproducing any overall benefit to the student. A subsidized rental system would also allow newinefficiencies to emerge. This would hinder competition that makes on-campus stores work hard to keepthe sale of textbooks from going elsewhere.It is not surprising that so few Colleges and Universities rent textbooks. In contrast the State should lookat emerging changes in technology that would allow better digital delivery of information. Leadership inthe digital age is where the State of Illinois should be focused. In the near future textbooks may evenbecome obsolete due to technology advances. For the State to pass legislation or issuing revenue bondsto implement an antiquated and an inefficient rental would not yield the results intended nor be aneffective approach to improving the affordability of Education. This plan will cost the students one-wayor the other. Schools will raise tuition to cover the loss in revenue and to cover the costs of operating therental program.Please feel free to contact Jim Reynolds at 708-456-0300 ext. 3542 if you have any question concerningthis response.Respectfully submitted,/S/Jim ReynoldsJim ReynoldsExecutive Director of Finance/S/Doug OlsonDoug OlsonAVP Student Services-121-
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A Report on the Fe
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EXECUTIVE SUMMARY .................
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Estimated Textbook Rental Cost Per
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EXECUTIVE SUMMARYGrowing apprehensi
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• Faculty members, administrators
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ConclusionTextbook rental programs
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INTRODUCTIONAcross the nation, the
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increase in tuition and fees (7 per
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Source: Government Accountability O
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The IBHE’s 2006 survey found that
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ookstores, 17 percent to friends/re
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1. provide the option of purchasing
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Student fees are collected:• as p
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CURRENT ILLINOIS TEXTBOOK RENTAL PR
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MethodologyCOSTS AND FEASIBILITY OF
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Submitted cost data are presented b
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PUBLIC UNIVERSITIES - TEXTBOOK RENT
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Under a textbook rental program, ea
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FundingSR 692 directs the IBHE and
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have a separate series so that if a
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Impact on Tax Revenue.Property Tax.
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Textbook Selection. While acknowled
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According to the Student Monitor, i
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of the exact custom book. This alte
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Current Status of Voluntary Faculty
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APPENDICES-51-
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09400SR0692 Enrolled - 2 - LRB094 2
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APPENDIX BTextbook Study Timeline -
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Funding:1. Please provide an itemiz
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Textbook Survey - Third Party Books
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Estimated Annual Cost - Community C
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Estimated Annual Costs - Public Uni
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Estimated Textbook Rental Cost Per
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Kentucky. House Resolution 9 would
Page 69 and 70: Washington. House Bill 3034 would p
Page 71 and 72: materials to bookstores at wholesal
Page 73 and 74: ook wholesalers, stands this issue
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Page 103 and 104: Attn: Nicole Krneta Rogers-103-
Page 105 and 106: Spring 2007: ISBN 0-618-75386-9 Rai
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Page 109 and 110: universities and the largest univer
Page 111 and 112: separately and be stuck with any co
Page 113 and 114: From: Wilcockson, Mark [mailto:M-Wi
Page 115 and 116: supports informed decision making.
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Page 119: From: Brad O'Brien [mailto:bobrien@
Page 123 and 124: From: Devi Prasad V.Potluri [mailto
Page 125 and 126: Comments submitted on IBHE website:
Page 127 and 128: REFERENCE LISTAssociation of Americ
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A Report on the Feasibility of Textbook Rental - IBHE

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