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#Federal Textbook Price Disclosure Law

Federal Textbook Price Disclosure Law

The HEOA, short for the Higher Education Opportunity Act, is a higher education reform bill passed by Congress in 2008.  Among the many provisions in HEOA was a set of important regulations to help make textbooks affordable, which went into effect July 1, 2010 .

Summary of HEOA Textbook Provisions

1. Price disclosure.  Publishers are required to disclose prices and revision information when marketing textbooks to professors.  This law helps counteract the "broken market" at the root of high textbook prices by providing all of the information professors need to identify and consider lower cost options.

2. Unbundling.  Ever bought a textbook packaged with a CD or passcode you never used?  Thanks to HEOA, publishers now are required to offer all of the items in textbook bundles for sale separately.  This gives students freedom to buy what they need and not what they don't.

3. Textbook lists.  The new law also asks colleges to provide the list of assigned textbooks for each course (including ISBNs and prices) during registration.  That way, students can plan ahead for the expense, and they have more time to shop around for the best deals .

Analysis of HEOA Textbook Provisions

Below we explain and analyze each of the primary provisions in the textbooks section of the Higher Education Opportunity Act (HEOA).  Click the links below to jump to the corresponding section, and click here to view the full text of the bill.

1. Price Disclosure

What it says:  Publishers are required to include pricing information with any information they provide to faculty about a textbook.  Pricing information includes the following four items:

1. Wholesale price (and publisher's retail price if available)
2. Copyright dates for the past 3 editions, if applicable
3. List of substantial changes between the current edition and the previous edition
4. Any available alternate formats and their prices

Why it is necessary: Textbook prices have gotten out of control because the textbooks market does not function like a normal market.  The people who choose textbooks (faculty) are not the same people who buy them (students), and therefore price plays a lesser role in purchasing decisions. Textbook publishers exacerbate this problem by withholding price information from faculty.  Inevitably, when price is not put on the table, more expensive items will prevail.

A faculty survey conducted by the Student PIRGs shows that pricing information is difficult to find:

• 77% said that publishers rarely or never report the price of a book during sales interactions.
• Only 23% rated publisher websites as "informative and easy to use"

How it lowers costs:  Since the problem is that cost is not naturally a part of textbook sales, the first step is to get that information on the table.  This provision gives professors the tools they need to identify and consider lower-cost options - the prices enable them to compare books apples-to-apples, and the revision and format information can help them gauge whether a cheaper or older edition would be sufficient.

The vast majority (94%) of the professors we surveyed said they'd choose the less expensive of two equal options.  Although price disclosure will not transform the market overnight, increased transparency and preference for lower cost texts will eventually compel publishers to respond with better books at fairer prices.

2. Unbundling

What it says:  Publishers are required to offer all “bundled” textbooks for sale as individual unbundled textbooks and supplemental items.  Textbooks with supplemental materials that are integrated into the content are exempt (e.g. a CD with clips analyzed in a music text), and publishers must unbundle custom textbooks "to the maximum extent practicable."

Why it is necessary:  “Bundling” -- the common practice of shrink-wrapping or packaging textbooks with other books or supplemental items including CDs, workbooks and online passcodes -- inflates prices and makes used books harder to find and sell.  These items often go unused and thus do not contribute to the educational value of the text.  Research conducted by the Student PIRGs confirms that bundling is a common and costly practice:

• About half of all textbooks are bundled, and bundled textbooks are 10-50% more expensive than the textbook alone.
• Two-thirds (65%) of professors reported they “rarely” or “never” use the supplemental items in bundled textbooks.

How it lowers costs:  Students have the option to purchase only the materials they need, and they can save money by finding used copies of the individual components.  Additionally, instructors also have the option to assign less expensive, unbundled textbooks.

It's important to remember that bundling itself is not necessarily a bad practice.  The problem is that publishers have used it as a way to inflate prices and undermine the used book market.  The intent of the law is not to prohibit bundling, but instead to ensure bundles are created for the right reasons.  Note: It is possible that publishers will use the exemption for "integrated textbooks" to evade the unbundling requirement in some cases.  However, given the clear legislative intent and the strength of the overall bill, this should not be a major concern.

3. Textbook List Disclosure

What it says: Colleges must provide the list of required and recommended textbooks for each course in the catalog students use during registration.  The list should include the following information:

1. International Standard Book Number (ISBN) or author, title, publisher, copyright date
2. Retail price
3. The phrase "To Be Determined" if the information is unavailable

Colleges may choose the manner in which they present the information, but they must comply with this provision "to the maximum extent practicable."

Why it is necessary:  Textbook costs are unpredictable - one semester could total $100, the next could be $600, and students often do not know their book assignments until the semester starts.  Students lose out on the opportunity to shop around for the lowest prices, and the final amount can catch students and their families off guard.

How it lowers costs:  This provision can save students hundreds by giving them time to search for the best deals, and to evaluate options like rentals and e-books.  It also makes textbook costs more manageable by giving students the information they need to plan ahead for the full cost of attendance.

Other Provisions

In addition to the provisions outlined above, the textbooks section of the HEOA includes the following:

Disclosure to bookstores: Colleges must provide their affiliated bookstores with the most current course schedule, course enrollment and textbook assignments, upon request.

Disseminate information to students: Colleges are encouraged to disseminate information to students regarding on-campus programs to reduce costs including rental programs, book-swaps, guaranteed buyback, alternate content delivery programs, and other cost-saving strategies.

GAO report: Calls for a new GAO report by 2013 that examines the impact of the above provisions.  Click here for information about the 2005 GAO report .

Academic Freedom: The bill language also includes a clear statement about academic freedom:

"Nothing in this section shall be construed to supercede the institutional autonomy or academic freedom of instructors involved in the selection of college textbooks, supplemental materials, and other classroom materials."

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Analysis of HEOA Textbook Provisions