The rallying cry against high textbook costs is now ubiquitous across college campuses. Administrators, faculty, students and parents have all complained as textbooks prices continue to climb. Recent studies have shown that many students are opting not to buy all the textbooks for their courses due to these high prices, leading to students being less prepared for class and negatively impacting their academic performance.
While the high prices of textbooks affect all students, there is a hidden and massive cost for students on financial aid loans - which could be adding as much as $4 billion to the spiraling student debt load a year - that has not yet been a part of this very important discussion.
Consider the Fall 2014 federal student financial aid interest rates. Subsidized and unsubsidized rates for undergraduate loans were 4.66% with a typical repayment term of 10 years. However, most common loan repayment programs include deferred plans after graduation, which provide students the opportunity to choose from several options including repayment schedules that extend from 15 to over 18 years. There are a number of online student debt calculators that you can use to calculate student loan repayment options. One I recommend is The New York Times ‘Student Loan Calculator.'
Considering the standard rate above, if a student is using loan aid to pay for textbooks, the impact on the effective prices is quite staggering. For example:
- Purchasing a $200 textbook will cost $251 by the time the loan is paid off
- Spending $1,000 a year on textbooks and class materials will cost $1,253
With total undergraduate enrollment now at 18MM and 80% percent of first-time undergraduate students in degree-granting institutions receiving financial aid, there are over 14 million undergraduates who are receiving financial aid funds to apply towards the purchase of textbooks. If each student spends an extra $253 a year (due to the interest rate of loans), an additional $3.6 billion in student debt is created.
This comes at a time when the growing problem of student debt in the US is now at $1.3 trillion, topping even credit card debt. Factoring in this massive hidden cost, there has never been a more important time to drive down textbook prices and provide students with more affordable course material options.
At Akademos, we are focused every day at driving down the cost of textbooks and course materials to lessen the long-term cost of education for students. By providing access to over 12 million IBSNs with a complete inventory of new, used, rental, eBook and Marketplace options for textbook purchases, students can increase their purchasing power and reduce their growing student debt load. Last year alone, Akademos saved students over $10 Million in textbook and course material costs.
The $200 new textbook would cost an average of 60% less by purchasing from the Akademos Marketplace. Thus, if a student spent $120 instead for that textbook, they would save $400 a year. Across the entire student population of undergraduate students receiving any financial aid this savings would translate into a $1.5 billion reduction in the student debt obligation. More importantly, these savings would make it easier for students to purchase all their required textbooks, facilitating learning and their academic success.
To learn more about our ideas and solutions for expanding affordable textbook options for students, please visit our website at www.akademos.com.