New report: Automatic textbook billing: Limited choice, uncertain savings

Portland, Ore— Earlier this year, the U.S. Department of Education proposed a regulatory change that would give students the right to “opt in” to textbook and course material charges, rather than being billed on their tuition invoices without their affirmative consent. This proposed policy would empower students, provide greater consumer choice and improve transparency. To make the case that the Biden administration should make its proposal a rule, the Student PIRGs and U.S. PIRG Education Fund released on Thursday a new report: Automatic textbook billing: Limited choice, uncertain savings.

This new study of so-called “inclusive access” billing programs shows that they lock students into an uncompetitive textbook market and may limit the spread of open educational resources, which can be customized by faculty and are available for free. 

Report researchers reviewed 171 contracts for course materials at 92 two- and four-year public colleges and universities or consortiums of public higher education institutions. Specifically, they found: 

1. Of the contracts between schools and third-party bookstore operators that included provisions for automatic textbook billing, most included revenue-sharing provisions between the bookstore and the school. In other words, the school bills students for textbooks, pays the bookstore and then receives a portion of that money back. This creates a potential conflict between students’ and the institution’s financial best interests. 
2. Some contracts with publishers require that a very high percentage of students participate in automatic billing programs or the school risks losing promised discounts. This may discourage schools from promoting used or rental textbooks that might save money for students or from making reasonable efforts to ensure students can opt out.
3. A key selling point of automatic textbook billing programs is the promise that they will reduce student costs. However, savings in contracts with publishers, third-party bookstore operators and digital platforms are difficult to evaluate, and some contracts may provide no savings. 

“Calling something ‘inclusive access’ may sound great for students, but in reality they’re anything but inclusive,” said Charlie Fisher, OSPIRG’s state director. “These programs undercut low-cost options such as free, open textbooks, used books, and textbook rental programs. As a result, students now have fewer options than ever to save money when purchasing course materials.”

This current system often makes it difficult for students to easily opt out of these programs or use older, used textbooks without classroom penalties.