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GAO Probes College Textbook Price Increases

Textbook prices have nearly tripled since 1986

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Dateline: August 2005

Bought your textbooks yet? Did you need a loan? Ever wonder why college textbooks have become so expensive? So did Congress.

Considering that nearly half of all U.S. college students receive federal aid to fund their education, the U.S. Congress asked the Government Accounting Office (GAO) to investigate the soaring price of college textbooks. Guess what the GAO found out?

Over the last 20 years, 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.

Eyes popped when the GAO analysts saw those figures, so they decided to find out (A.) why textbook prices have soared and (B.) why a some U.S. textbooks may sell outside the United States for lower prices.

GAO found that while many factors affect textbook pricing, the increasing costs associated with developing products designed to accompany textbooks, such as CD-ROMs and other instructional supplements, best explain price increases in recent years. 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.

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 re-importation, recent advances in electronic commerce have broken down this barrier. In response to concerns that the international availability of less expensive textbooks might negatively affect textbook sales, publishers have taken steps to limit large-scale textbook re-importation.

In conducting its research, GAO received technical comments from the Department of Labor. The Department of Education had no comments. The National Association of College Stores generally agreed with the report's findings. The Association of American Publishers agreed with some findings but expressed concern about the data sources GAO used and the characterizations made by retailers and wholesalers regarding the impact of publisher practices on students.

GAO also found that the cost of textbooks as well as supplies as a percentage of tuition and fees varies for first-time, full-time, degree-seeking students by the type of institution attended--72 percent at 2-year public institutions, 26 percent at 4-year public institutions, and 8 percent for 4-year private institutions.

The complete GAO report is College Textbooks: Enhanced Offerings Appear to Drive Recent Price Increases, GAO-05-806, (.pdf)

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