Topic:
HIGHER EDUCATION;
Location:
EDUCATION - HIGHER;

OLR Research Report


January 3, 2007

 

2007-R-0020

TEXTBOOK RENTAL PROGRAMS

By: Rute A. Pinhel, Research Analyst

You asked about college textbook rental programs, in response to a recent article in The Providence Journal, “His Idea: Rent-a-Text to Save Students Cash.” You also asked for information on the privatization of college bookstores.

SUMMARY

Approximately 25 postsecondary institutions nationwide offer a type of textbook rental program. Most rental programs provide the majority of student course materials and do not require mandatory student participation. Rental programs are funded mainly by rental fees and fines. The programs generally require faculty members to make a three to five year commitment to their adopted course materials. While rental programs can provide greater accessibility to textbooks and cost savings for students, the start-up costs, space considerations and academic freedom issues are limitations of the programs.

TEXTBOOK RENTAL PROGRAMS

Overview

According to the National Association of College Stores (NACS), approximately 25 postsecondary institutions offer a type of textbook rental program to their students. This amounts to less than 1% of colleges and universities nationwide. The majority of rental programs have been in existence since the inception of these institutions.

Various textbook rental program models currently exist. The NACS reports that 67% of textbook rental programs provide for a majority of course materials, 19% use a limited rental model by grade level or subject, and 14% use a hybrid model where students may rent or purchase their textbooks. In total, 33% of these programs require mandatory student participation.

Rental programs generally require faculty members to make a three to five year commitment to their adopted course materials. The NACS reports that in some cases, rental programs may violate state contracts between college boards and faculty associations regarding faculty's right to select instructional materials.

Rental programs are funded mainly by rental fees and fines. Programs may charge rental fees per credit hour, per course or per semester. For example, the University of Wisconsin program referred to in the article charges a flat $63.50 per semester. Southeast Missouri State University charges $17.75 per course while students at Rend Lake College in Illinois are charged a $28 fee per book, plus a $20 deposit.

Benefits and Limitations

The Illinois Board of Higher Education (IBHE) has recently reported on the feasibility of implementing a textbook rental program in the state public higher education system. Among its findings, the IBHE study concluded that the potential benefits of textbook rental programs include:

Cost Savings- The study found students at Illinois public universities and colleges with existing textbook rental programs pay less than half of what they would be expected to pay at other institutions.

Acquisition of Required Textbooks- Rental programs funded through mandatory student fees would guarantee that all students have access to all required textbooks.

Recruitment and Retention- A textbook rental program could be a deciding factor for students and parents with financial constraints.

The study also identified the following limitations of textbook rental programs:

Start-Up Costs- Implementing a rental program would require significant start-up costs for the initial setup and textbook inventory, as well as possible costs associated with constructing a new facility or converting space to house the program.

Space Considerations- Space needs would vary based on the number of students, the number of textbooks per student, the number of courses, and the length of time the books are kept in inventory. Storage may also be a concern for colleges with multiple off-campus sites.

Loss of Revenue- The study recognized the potential loss of revenue for the institution. Campus bookstores may serve as a source of revenue for their institutions, generating funds typically spent on student activities or student union operating expenses. Institutions with bookstores under contract management would lose the commissions typically provided through these arrangements.

Academic Freedom- In general, rental programs require faculty members to agree to adopt a textbook for a period of three to five years. Faculty members and administrators would have to reach a consensus to maintain the same texts for a determined period of time.

PRIVATIZING COLLEGE BOOKSTORES

NACS reports that approximately 4,450 college stores serve 4,236 institutions in the United States. Chart 1 illustrates the composition of college store ownership.


Chart 1: Campus Bookstore Ownership



Source: National Association of College Stores, Higher Education Retail Market Facts and Figures 2006

Only 13% of college stores are privately owned, while 34% are privately operated under a contract with the institution. Under contract management, colleges and universities contract with an outside vendor to operate the campus bookstore. The NACS reports that Barnes & Noble, The Follett Corporation and College Bookstores of America are the most prevalent contract firms in college stores nationwide. The largest percentage of stores are owned and operated by the institution. Most on-campus college stores are owned by the institution while off-campus stores are typically privately owned.

RP:ts