College students rent textbooks to save money

Image via Wikipedia

By Jenna Johnson
Washington Post Staff Writer
Monday, January 18, 2010; B01

At the beginning of each semester, George Mason University Bookstore's general manager ventures into the school's mailroom and tries to figure out where everyone bought their books, because fewer and fewer students are coming into her store.

This year, the competition was easy to spot: bright orange boxes from chegg.com, which considers itself the Netflix of textbook rentals.

Chegg.com has rented more than 2 million books to students at more than 6,400 schools since it was launched nationally in 2007. Students can rent books by the semester, quarter or summer at rates that vary depending on the popularity of the title and when the semester starts. But the books are usually at least half off retail. Students hang on to the orange boxes and mail the rented books back at the end of the semester for free.

The site has gained popularity by infiltrating Twitter and Facebook, using student ambassadors who are paid $5 for every customer they recruit (one student has made more than $17,000) and promising to plant a tree for every book rented. It has also agreed to donate money to Haiti earthquake relief efforts for each order. "Students are very green, but they are also very socially aware," said Tina Couch, a spokeswoman for the company.

Image via Wikipedia

Students are also thrifty, especially with prices of textbooks steadily increasing and, in some cases, spiking because publishing companies have packaged the thick volumes with computer programs, workbooks or access codes to content-related Web sites. Estimates for a typical student's spending on textbooks range from $700 to $1,000 annually.

For years, some students have cobbled together their required reading lists by shopping for used or discounted books online, coordinating trades on Facebook and reading online class reviews to see whether they even need the book. Freshmen often spend the most because they haven't figured out where else to shop, said Lauren Morency, 20, a junior psychology major at Catholic University.

"Freshman year, I bought all my books from the bookstore. . . . I spent a little over a thousand dollars," she said. "I would be in the bookstore, and everyone around me would be talking about buying their books online instead. It's just a lot cheaper."

Image via Wikipedia

During her sophomore year, Morency bought several books on eBay's half.com and a few used titles at the bookstore, which saved her a little money. This year, she rented nearly everything on chegg.com, which cost her $400 last semester and about $270 this semester.

Many campus bookstores are trying to change their image and reclaim their customers by allowing students to order books online, speeding up checkout lines, marketing through social media and reminding students how convenient it is to buy on campus.

At the beginning of the school year, several of the largest bookstore operators began rental programs at a handful of campuses. Barnes & Noble, which operates 636 college bookstores, started the rental program at three schools and expanded it this semester to about two dozen more, including George Mason and the University of Maryland at College Park.

Barb Headley, the general manager of George Mason's bookstore, volunteered her store for the pilot program: "I told them, 'If there's anything that's out there for rentals, we want to do it.' Kids, they are getting smarter. If we don't give them a cheaper book, they will go elsewhere."

Of the store's more than 4,000 titles, 50 are available to rent, at 42.5 percent of the cost of a new book. All 50 are some of the country's most popular textbook titles, which are likely to be used by multiple classes.

For example, "Social Psychology" would cost about $142.65 new, $107 used, $99.86 as an e-book and about $60 as a rental. New and used books usually can be sold back at the end of a semester for a fraction of the initial cost, but students simply return rentals by the end of finals week. If they lose or severely damage a book, they are charged full price.

The rentals have been popular with students pre-ordering their books online, Headley said, but most students will not start buying their books until after classes start Tuesday.

For now, the rentals are one more option for students searching for the cheapest books. George Mason junior Alicia Long, a biology major, plans to borrow some books from friends, buy some online and rely on the bookstore for campus-specific lab manuals.

"It's so much work to find a cheap textbook," she said.

Textbook Publisher to Rent to College Students

By TAMAR LEWIN

In the rapidly evolving college textbook market, one of the nation’s largest textbook publishers, Cengage Learning, announced Thursday that it would start renting books to students this year, at 40 percent to 70 percent of the sale price.

Students who choose Cengage’s rental option will get immediate access to the first chapter of the book electronically, in e-book format, and will have a choice of shipping options for the printed book. When the rental term — 60, 90 or 130 days — is over, students can either return the textbook or buy it.

With the growing competition from online used-book sales, digital texts and new Internet textbook-rental businesses like Chegg and BookRenter, other publishers and college bookstores are also edging toward rentals.

Follett Higher Education Group, which manages more than 850 college bookstores, is starting a pilot rental program this fall at about a dozen stores, including those at the State University at Buffalo, Grand Rapids Community College in Michigan, and California State University at Sacramento. The stores will offer about 20 percent of their titles for rent, charging 42.5 percent of the purchase price.

With college textbooks often costing more than $100 apiece, students spend an average of $700 to $1,100 a year, representing one of their biggest expenses after tuition and room and board. Many students try to save by buying used books or ordering books from overseas, where they can often cost half the domestic price. Many students also resell textbooks at the end of the academic year, feeding the used-book market.

Besides giving students a new option, rentals give both publishers and textbook authors a way to continue earning money from their books after the first sale, something they do not get from the sale of used textbooks.

“Our authors will get royalties on second and third rentals, just as they would on a first sale,” said Ronald G. Dunn, president and chief executive of Cengage, formerly Thomson Learning. “There’s a tremendous amount of activity around rentals now, but we’re the first higher-education publisher to move in this direction.”

Cengage’s rental business will begin with several hundred titles this year, and then expand, Mr. Dunn said.

“The Internet has really changed everything in terms of our abilities to reach customers in different ways,” he said. “Our strategy has been to offer as many choices as we can, in terms of price points and different kinds of products. So if they choose not to buy the printed book, they can rent it, just as we already offer them the choice to buy an e-book, or a chapter.”

McGraw-Hill is taking a different route into rentals, through a partnership with Chegg, a fast-growing online textbook-rental business. Under an agreement that is to be announced soon, McGraw-Hill will supply 25 of its books to Chegg, in return for a portion of the rental revenue.

Ed Stanford, the president of McGraw-Hill Higher Education, would not disclose what share of each Chegg rental his company would get.

“It’s an opportunity to explore a different model that we think has some real promise,” Mr. Stanford said. “We’re not a retailer of our textbooks, so we’re not trying to play the retail role. But we are also talking to large college bookstores who are interested in rentals as an option. It’s of great interest to us as a way that we could begin to share the revenues after the first sale.”

A few college bookstores have been offering rentals for years, and many more are moving in that direction.

“There’s a changing climate in the industry, with all the pressures on the costs of higher education,” said Elio Distaola, of Follett. “The reason we’re doing the rental pilot is just to see the viability of the program.”

Barnes & Noble College Booksellers, too, is starting a pilot rental program at three of its 624 college bookstores this fall.

“I think it could very well end up being a standard offering,” said Patrick Maloney, the executive vice president. “We’re renting books at 35 percent of the list price, and it’s only for hardcover texts, because paperbacks would get beaten up too fast. The schools assist us with collecting the books at the end, as they do with library books. The other option, taking the student’s credit card and billing it if the book wasn’t returned, didn’t seem very user-friendly.”

Mr. Maloney said the rental program would have been offered at more colleges and universities, if more faculty members had been willing to commit to using the same textbook for at least two years.

“We had a lot of discussions with schools, but in one case, they wanted to get 10 faculty members to sign on, and they couldn’t get any,” Mr. Maloney said.

Since a federal report four years ago found that textbook prices nearly tripled from 1986 to 2004 — rising an average of 6 percent a year, twice the inflation rate — Congress and state legislators have been working to contain textbook costs.

The Higher Education Opportunity Act, passed last year, included $10 million for grants to support textbook rental pilot programs; according to Charles Schmidt of the National Association of College Stores, more than 20 college bookstores have applied for grants.