Tuesday, August 15, 2017

Thrifty Thinking: Textbook Rental

Student loan debt continues to surge - up 450% since 2003 - even though most recently U.S. college tuition is growing at the slowest pace in decades. Bottom line: college remains expensive and students need to be industrious and look for ways to save and make money. One often-overlooked way is via textbooks.
·         The cost of a college textbook has increased by 73 percent since 2006 and individual textbooks often cost over $200, sometimes as high as $400.
·         College Board recommends a budget of $1,200+ a year for textbooks and supplies.

I had a chance to interview CampusBooks’ CEO Alex Neal to learn simple ways for students to be smarter about textbooks when preparing for the upcoming school year. CampusBooksis a leading textbook price comparison website, where students and parents can find or sell textbooks.

Textbooks can be a major part of a student's budget. How have textbook prices changed recently?
A Bureau of Labor Statistics (BLS) study from 2015 showed that textbook prices have risen over three times the rate of inflation from January 1977 to June 2015, a 1,041 percent increase (vs the Consumer Price Index).  Recently, however with online business models increasingly disrupting the traditional textbook retail model, the cost of textbooks is misleading as students are not having to pay these exorbitant prices any longer.  In fact, one of the most expensive textbooks right now Principles of Instrumental Analysis has a list price of $447.95, but is available used on CampusBooks.com for $31.69 (including shipping).   So despite the headline numbers, savvy online shoppers don't have to pay anything close to retail prices for textbooks.

Why do so many students overlook price shopping for textbooks?
Many students overlook price shopping because they are simply not aware that option exists for them.   College freshmen especially are wed to the notion that the have to buy their textbooks at the campus bookstore; their perception is that only the college bookstore has the exact books they need.  However, as students learn the system each year a larger percentage of them don't buy their books on campus.  In fact, according to industry data, by senior year a majority of students don't buy their books at the campus bookstore.

Why should students consider renting textbooks?
Students should consider renting renting books because it's an easy, cheap, and convenient option to acquire their textbooks.  In addition, you know your total out of pocket cost when you acquire the rental, as opposed to purchasing a book and selling it at the end of the semester when you don't know what your actual buyback price will be.  Rental isn't always cheaper however, and in certain cases it is more cost effective to purchase a book.  In addition, if you want to keep your book or aren't able to take good care of your book, then purchasing is a better option.  The patent pending CampusBooks Buy Vs Rent tool allows a student to compare the total cost of ownership so they can make the best decision based on their unique needs.
Are there disadvantages to renting a textbook?
The major disadvantages of renting a book are that if you lose or damage the book, sometimes you can incur costly damage charges.  Additionally, there are limits to how much you can highlight the book and if you wish to keep the book for future reference, obviously that is not an option for rentals.  Finally, renting isn't always the cheapest option so using CampusBooks allows you to take all of these considerations into play when making a purchase decision.

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