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This is a research report on the use of automatic textbook billing, a current practice of textbook publishers.

For more than 30 years, textbook publishers have added to that financial burden by using their power in the market to drive up textbook costs through a variety of tactics. Three companies – Pearson, Cengage, and McGraw-Hill – control 80 percent of the college textbook market. These publishers have historically driven up prices by issuing new editions with limited changes and taking advantage of a captive market of students who cannot choose an alternative to the assigned textbook. The result is clear: the rapidly increasing cost of textbooks has students now spending over $3 billion of financial aid dollars each year on course materials.

In the internet age, students have found new ways to work around high textbook costs. The past decade has seen the creation of a thriving online marketplace that facilitates trading, renting, and selling of books. And, a growing movement of openly licensed textbooks that are free or can be printed at low cost are creating real competition for traditional publishers – and saving students hundreds of millions.

Requiring students to purchase access codes for a proprietary publisher platform to submit homework or other course materials is crucial for publishers to stay relevant in this shifting marketplace. These codes lock students into high cost textbooks without significantly increasing educational value. Instead, students continue to struggle to afford critical educational material and often lose access to the materials at a later date. This is a continuation of the broken textbook market, not a radical solution. Rather than making changes that are more consumer-friendly, access codes are a last-ditch attempt from the publishing industry to maintain – and even strengthen – their monopoly.

To increase use of access codes, publishers have sought out partnerships with institutions to steer faculty into these products and automatically bill students for these materials. Variously known as inclusive access, innovative pricing, or other names specific to the publisher, contracts between publishers and institutions set in place the conditions and discounts under which students are automatically charged on their tuition bill via an opt-out charge for each assigned class material.

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