Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Can Amazon Be the Source for Cheap Textbooks Students Desperately Need?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

With students and parents already dealing with the rising cost of attending college, little attention is paid to the ridiculous price of text books. The U.S. Public Interest Research Group, or PIRG, is looking to change that with the release of "Fixing the Broken Textbook Market: How Students Respond to High Textbook Costs and Demand Alternatives."

Big business, captive audience
Whereas regular book publishers have to compete with the idea that you can choose the new Stephen King over the new John Grisham (or simply not read at all), academic publishers have a captive audience that has to buy their books. Because of that, while prices for regular books have fallen since the advent of e-reader's like's  (NASDAQ: AMZN  ) Kindle and Barnes & Noble's (NYSE: BKS  ) Nook, prices for textbooks continue to climb.

According to the PIRG study, the average student in United States spends around $1,200 a year on books and supplies. Between 2002 and 2013, the price of college textbooks rose 82% -- nearly three times the rate of inflation.

To make matters worse, those rising prices, the study said, have forced already strapped students to make some difficult choices.

  • 65% said they had decided against buying a textbook because it was too expensive.
  • Nearly half (48%) said the cost of books had an impact on how many or which classes they took.
  • 94% of the students, who had skipped buying a required book, said they were concerned that it would hurt their grade in that course.

Amazon to the rescue?
PIRG says publishers use "a set of tactics to drive prices skyward," such as releasing new editions every three to four years regardless of changes in the subject material.

"They price these new editions quite high, which in turn dictates the price of used books and rental books," said Ethan Senak, a higher-education associate at PIRG. "Even as they move into e-textbooks, publishers incorporate paywalls, expiration dates, and printing restrictions that further continue the practices they've used to control the traditional market."

Amazon, and a variety of online start-ups, have tried to create alternate markets for textbooks, which cuts out the publishers and Barnes & Noble, which runs bookstores at a number of universities. Through its used-book market, Amazon, has bought back books from students and resold them well-below their list price.

The textbook publishers, however, are hip to this strategy and have come up with a number of ways to force students to buy new books. According to PIRG:

  • Publishers release new editions every three to four years regardless of changes in the subject, with prices that are 12% higher on average. Once a new edition is released, that copy takes the place of older editions on store shelves. That means students are not only forced to buy the more expensive new edition, but are also unable to sell back their used book from the previous semester.
  • Publishers also increase costs by packaging textbooks with online pass-codes or CDs that increase prices 10% to 50%. These pass-codes often expire after a limited time period, eliminating the viability to sell back the book.
  • New "cost-saving" options like loose-leaf and custom editions are more affordable upfront, but often end up costing more because they have no resale value.

Little competition 
Just five textbook companies control more than 80% of the $8.8 billion publishing, market, according to PIRG. Three of those companies -- Pearson  (NYSE: PSO  ) , Cengage Learning, and Macmillan Publishers -- sued a start-up, Boundless Learning, which was attempting to offer free alternative textbooks. That federal court case was settled with the details not released, but it shows that those making the most money off of students will do whatever they can to protect their turf.

Still, change is coming
Students overwhelmingly support a change in the system. According to PIRG, 82% of students felt they would do significantly better in a course if the textbook was available free online with buying a hard copy optional. This is exactly how open textbooks are being designed.

In addition to open textbooks, which are only available for a tiny percentage of college classes, a number of schools have begun book rental programs. According to PIRG, there were only 300 schools with rental programs in 2009, "that number had increased 10-fold to more than 3,000 by 2013.

In addition, launched a college textbook rental program in 2012. Per a PIRG spokesman, "The proliferation of these programs seems to have mitigated the cost curve for students over the last several years."

The next step for you
Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you what you need to get started, and even give you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.

Read/Post Comments (3) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 04, 2014, at 9:21 AM, LexSC wrote:

    It is about time that this ridiculous system is fixed. This is blatant collusion between the professors and the text book publishers. The professors get kickbacks from the publishers.

  • Report this Comment On February 04, 2014, at 10:56 AM, Morgana wrote:

    Dear LexSC!

    After 40 years of teaching, I can tell you that you are wrong: professors do NOT get kickback from publishers. If . . . IF the professor wrote the book, he might . . . MIGHT get royalties.

    The textbook companies are HORRIBLE! We professors have been complaining for years, threatening not to use certain publishers texts unless they lower the price for quantity purchases. Many schools are now adopting departmental versions of a text. (Why? because upwards near 65% of faculty in colleges is part time--adjunct. With shifting, non-permanent personnel, the department requires one textbook . . . whether or not the adjunct professor using it approves of it or not, whether or not it fits his/her pedagogy, and whether or not he has developed his/her own materials to save students some money.

    Imagine a department of 100 professors adopting a certain textbook for their classes. That gives us some leverage on price but, mostly, a migraine because the publishers are intractable. Worse yet, the biggest publishers are DETERMINING the "science" (read: bogus science) and other politics and philosophies to be put into textbooks.

    Power is money, dear. Look at Citizen United.

    In the last five to seven years, we professors have found that we can use the internet for sources and "create" our own textbook even for an in-person class. If you care anything about freedom of thought, creativity, reason!, logic!, you should support free textbooks or vastly discounted online textbooks or any alternative to the mega-book companies. And, if we wish to get this country back on track, we should support education--particularly scaling back adjunct use to save money in colleges and universities. It is not only the Walmart and fast food workers who are limited in work hours, but adjuncts all across the country: no pension and no benefits.

    Here is a breakdown of a popular book for teaching English: rent paperback $17; buy $75.50; kindle rent $33.44; buy kindle $59.83. These are inexpensive compared to "better" books for English and positively cheap compared to STEM tetbooks (science technology, engineering, and math books). Professors can customize a textbook but they get about one dollar per text (

    When I went to college at CCNY, tuition was free in the late sixties and early seventies and had been since the 19th Century. Bless the school and the professors: they taught us to think (not regurgitate), expected us to be creative AND HONEST and, above all, fecal detectors. When I taught in the CUNY system, I could pick my own textbook. Rule #1. Teach the students to think.

    So, LexSC, if you can give me some national statistics on the professors getting kickbacks for the last ten years, I would appreciate it.


    A recently retired someone who has taught for forty years on two coasts and in the middle and blesses MF every day for being fecal detectors.

  • Report this Comment On February 05, 2014, at 4:40 PM, 45ACPbullseye wrote:

    I really like the passion behind Morgana's post. My undergraduate degree, in state, from UCLA -- tuition was about $2,600 + plus books. Books were not a reason to avoid a class. Parking was the biggest challenge, which meant I could afford a car as a student. It is quite likely that MOOCs will ultimately solve this problem, while creating other issues at the same time.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2822151, ~/Articles/ArticleHandler.aspx, 8/28/2015 9:09:27 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Daniel B. Kline

Daniel B. Kline is an accomplished writer and editor who has worked for the Microsoft's Finance app and The Boston Globe, where he wrote for the paper and ran the business desk. His latest book "Worst Ideas Ever" (Skyhorse) can be purchased at bookstores everywhere.

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,654.77 369.26 0.00%
S&P 500 1,987.66 47.15 0.00%
NASD 4,812.71 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/27/2015 3:59 PM
AMZN $518.37 Down +0.00 +0.00% CAPS Rating: ***
BKS $15.69 Up +0.45 +0.00%
Barnes & Noble CAPS Rating: *
PSO $17.18 Up +0.16 +0.00%
Pearson PLC (ADR) CAPS Rating: ****