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New Legal Analysis Exposes Loophole Preventing Many College Students From Obtaining Affordable Textbooks

April 3, 2023 

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New Legal Analysis Exposes Loophole Preventing Many College Students From Obtaining Affordable Textbooks

Student Defense today released a new analysis outlining regulatory and legal changes that could bring increased competition and accountability to the higher education textbook market. Published by the Postsecondary Equity & Economics Research (PEER) Project, the paper outlines how a 2016 change to the Cash Management regulations allows schools to automatically include the cost of textbooks in tuition and fees if they partner with a third-party publisher or retailer to offer the books “below competitive market rates” and give students a way to opt out. 

This loophole prevents students from saving money on textbooks by effectively eliminating  competitive textbook markets. Additionally, the ability to opt-out is often illusory where schools and publishers prevent students from comparing costs and opting-out for less than all of their courses. To close this loophole, Student Defense proposes the Department of Education define “below competitive market rates” and require institutions to disclose their pricing and discount methodology. 

The Department recently announced a negotiated rulemaking committee to prepare proposed regulations for programs including the Cash Management rule and the disbursement of Title IV funds toward textbooks. 

“A few simple regulatory fixes will free countless students from the burden of the current textbook market scheme, creating the illusion of choice and affordability and yet, still overcharging students for tools they need to fully enjoy the benefits of a higher education,” said Student Defense Senior Counsel Libby DeBlasio Webster.

This paper also includes a proposal for Congress to update Section 133 of the Higher Education Act (HEA) so publishers would be required to disclose cost-saving strategies and schools would be required to make coursework accessible separate from textbook costs automatically charged as tuition. 

U.S. Sen. Durbin (D-IL) has proposed the Affordable College Textbook Act, which would address some of the issues raised in the paper.

A full copy of the paper can be found here.