How Your Textbook Dollars Are Divvied Up

New editions and high-tech supplements help drive up the cost of textbooks.

College students in the aisles of the Georgetown University bookstore.

Laura Kadue won't be studying economics this semester, but that isn't stopping her from conducting a cost-benefit analysis. This academic exercise isn't taking place in the library or in her dorm room. It is playing out while she weighs textbook prices at the George Washington University bookstore.

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"I was going to get my books at the store, but people have been saying they're cheaper other places," like on, she says. That could save her some serious money. Her most expensive book, a calculus textbook, is $289.

A few aisles away, second-year political science Ph.D. student Lucas Winter considers his options. He could rent his books, he says, as he points to the prices on one of his course books—$35 to buy it new, $22.75 to rent it.

"It's not worth it," he says. With such a small price difference, says Winter, he might as well pay full price and keep the book.

Students currently have more textbook-procurement options than ever: buy them new or used (at the bookstore or online), rent them, or buy or rent e-textbooks on their Kindles or iPads. However, as students like Kadue and Winter choose, their prices are being constantly pushed upward. According to the Labor Department, textbook prices as of July were 8.1 percent higher than in July 2011, while prices for all goods only grew by 1.4 percent overall.

That trend is long-standing. A 2005 Government Accountability Office report showed that college textbook prices grew at twice the rate of inflation from 1986 to 2004.

Where does all that money go? According to figures from the National Association of College Stores, an average of 21.6 cents of every dollar spent on a new textbook will go to the bookstore, whether for personnel costs, operations, or income. For Kadue's $289 textbook, that's around $62. Another cent of every dollar pays for the freight of shipping a heavy book around, so subtract another $3 from her cost. That leaves around $224 that goes to the publisher, or around 77.4 cents for every dollar.

NACS no longer receives information from publishers about where textbook money goes, but as recently as 2008, they provided that cost breakdown. At that time, around 15.4 cents of every dollar went toward marketing the textbooks, 11.7 cents went to the authors, and the largest chunk—32.2 cents—went to the basics: paper, printing, and paying publishers' employees.

How much students spend on their textbooks depends on whom you ask. According to Eric Weil, managing partner at market research firm Student Monitor, a student spends around $535 per year on textbooks. According to NACS, a student spends $655 for required course materials. The College Board puts the annual cost of college books and materials at $1,168 for students at public four-year universities—a figure that is even higher for public two-year and private four-year schools.

Students aren't happy about those costs. Around 75 percent of students agree that the cost of textbooks is "excessive," according to Weil. "There's no excuse for a calculus textbook to cost $250. That's just insanity," says Nicole Allen, affordable textbooks advocate at Student PIRGs, an association of student advocacy groups. Differential equations, after all, were the same in 1960 as they are now; charging ever-increasing costs for the same information, says Allen, is unjustifiable.

Publishers say the cost matches the work put into creating the books. "If you want a concept book in black and white, go get it, and it will be incredibly cheap," says Bruce Hildebrand, executive director of higher education at the Association of American Publishers. "What faculty are looking for are calculus books that have interactive components and have applications," he says, like the website codes that accompany many books and allow students to learn via online demonstrations and quizzes.

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According to Hildebrand, developing and producing a textbook takes three to five years on average, and can be even take more than a decade for some science books. When students plunk down hundreds of dollars for academic tomes, he says, they are paying for this labor-intensive process.