Dear Friends —

It’s no secret that college tuition has been rising faster than the rate of inflation for at least the past twenty years. It turns out, a less obvious component of college costs has also been climbing: the price of textbooks.

Congress is so concerned about this it commissioned a study by the Government Accountability Office. In hearings held on Capitol Hill this past summer, the GAO reported that from December 1986 to December 2004 textbook prices nearly tripled, increasing an average of 6 percent per year — twice the rate of inflation and “close behind tuition increases.”

According to Travis Reindl of the American Association of State College and Universities (AASCU), it’s not unusual for students to spend nearly $1,000 per semester on textbooks, “especially if they’re in their junior or senior year and in the hard sciences such as chemistry or pre-med.”

The GAO study laid a large part of the the blame for textbook price hikes in recent years on “bundling” — the addition of CD-ROMs, study guides, and other supplemental materials that are included when you buy the book, whether they’re required or not. While publishers claim they’re adding these “enhancements” at the request of instructors, many professors counter that they don’t use them.

“Textbook publishers know they are selling to a captive audience. It boosts their profits to put these things together rather than sell them a la carte,” says Reindl.

In fact, in what is oddly similar to the situation with some prescription drugs, identical textbooks sold in other countries often sell for less simply because they don’t include these supplements.

Frequent revisions of textbooks also raise the price. “In some disciplines this makes sense,” says Reindl. “But Greek tragedy hasn’t changed a lot and you probably don’t need a new edition” every couple of years.

The increasing price of textbooks is just one more obstacle college students have to factor into their already tight budgets. Sadly — and shockingly — some are dealing with the issue by simply not buying a required book.

According to a survey by Half.com, the book re-sale arm of Internet retailer eBay (EBAY), 56 percent of college students say they have avoided purchasing textbooks for their classes because they were too expensive. One in six admits to either not taking a class or dropping a class because of the cost of the required texts.

EBay spokesperson Chris Donlay says the results “surprised us, too. Books seem to be something students worry about and don’t have a lot of control over because prices change.”

Web sites such as half.com and amazon.com represent one example of how students are trying to cope by buying used books and re-selling last semester’s texts to raise money. Donlay points out students can also find brand new books online for less than the list price they would normally pay in the school bookstore.

Some colleges and universities are also trying to help. A dozen or so, including several campuses of the University of Wisconsin, have started textbook rental services.

If there is one positive trend concerning the cost of college it is that the double-digit tuition increases we’ve seen in recent years appear to be slowing. Ironically, the biggest tuition hikes in recent years were seen at public institutions because funding is tied to state tax receipts. When these declined because of the slower economy, college and universities had to pass their higher costs on to students.

Although the official results won’t be tabulated until next month, the AASCU’s Reindl expects tuition at four-year public college went up about 8 percent this year. That compares to a 13 percent increase two years ago and 10.5 percent last year. He predicts the picture will continue to improve next year, with tuition rising between 5-to-6 percent — in line with its 20-year average — “if the economy holds.”

But don’t expect things to get much better than that. Reindl points out that many of the things colleges and universities spend money on are experiencing the biggest inflationary pressures. Take health care costs. Because 80 percent of the money is spent on people, Reindl says the skyrocketing cost of health insurance “is walloping higher education.”

In addition, many of the campuses in this country were built in the late 1950s and 60s and are in need of updating. As everyone knows, the cost of concrete has also gone through the roof thanks to the building binge in China. There’s also demand to retrofit existing buildings with technology such as broadband and high-speed computer lines, all of which costs money.

Finally, higher fuel prices hit colleges and universities hard. All of those university-owned vehicles, from cars to buses, have to be up and running. And then there’s the coming “Katrina crunch” in the form of higher utility bills.

As I’ve said before, there’s a reason they call it “higher” education!

All the best,

Gail

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