With student loan debt now topping $1 trillion, nearly everyone agrees that rising college costs must be controlled. A few weeks ago I published a guest post from an executive of McGraw-Hill’s higher education division detailing a proposal to cut the cost of textbooks —by requiring all students to buy e-books and having the college bursar bill them for those books.

Today, I’m publishing a guest post with a radically different solution. The author is Ariel Diaz, co-founder and CEO of Boundless, a Boston-based start-up that makes textbooks available for free on-line by curating information from Wikipedia, government publications, Creative Commons licenses and other free sources. In April, Boundless raised its second round of venture capital funding—$8 million from a group led by Venrock. Not surprisingly, Boundess has also raised the hackles of publishers. In March Pearson Education, Inc., Cengage Learning Inc; and Macmillian Higher Education filed a suit charging Boundless with copyright infringement—a claim it denies. (The suit, which raises some interesting issues, is available here.)

The Right Solution to the “E-Book Problem”: Putting Students First

By Ariel Diaz, CEO of Boundless

Textbook publishers are trying to stay relevant in this increasingly open and digital world–but at what cost?

Tom Malek’s recent guest post on this site (“Solving the E-book Problem in Higher Education”) details textbook publisher McGraw-Hill’s new plan to accelerate the adoption of its digital texts by forcing students to buy the e-books for their courses, whether they’d like to or not.

The textbook industry is often called a broken market, as the end consumers do not select the product that they’re ultimately forced to buy. Students are able to choose from a number of options, thankfully, such as used and rental texts, but this compulsory e-book model threatens to make things even worse for them.

Today’s E-Books Don’t Meet Students’ Needs

Malek is right about one thing—digital is the future of higher education. According to a recent survey conducted by Wakefield Research, the majority of college students (67%) use digital technology every hour. A startling 40% of students can’t stay away from technology for more than 10 minutes at a time.

However, his conclusion about why today’s e-books are failing is wrong. Malek blames the slow uptake of digital texts on students’ ignorance of the benefits of e-books and their reluctance to give up the “familiarity” of print. Studies have shown that more than half of students do still prefer physical textbooks to e-books. Yet if you give those students a chance to interact with a great e-book experience on an iPad,75% of them prefer the digital alternative.

Today’s e-books aren’t the solution to students’ textbook woes because they’re expensive, poorly designed products that students don’t want. Publishers make very high gross margins on traditional textbooks, and since e-books radically reduce the cost of distribution and printing, one would expect prices to drop substantially for digital offerings. Yet thus far, e-books haven’t saved students enough to make switching from print worthwhile. A recent study released by Daytona State College revealed that many students only saved $1 by switching to e-books.

Malek argues that the high-cost of e-books is due to the fact that physical production costs are “only a fraction of what it costs to produce a textbook.” Yet numerous innovative publishers have found ways to produce high-quality texts for far less than their traditional counterparts. Flat World Knowledge, for example, offers cheap print copies of their textbooks and makes them available for free online.

Price aside, the reality is that students have never been offered excellent digital products that cater to the way they best study and learn. A quick glance at traditional publishers’ e-books reveals mostly non-interactive PDF files and “innovative learning platforms” that are little more than multiple-choice questions with a shoddy user experience. Malek and the publishers have chosen to ignore the obvious signal of students’ disdain for current e-book offerings, calling it a mere “problem of perspective.” But rather than improving that perspective, their plan is to drive students even deeper into the textbook trap.

Malek’s Solution: Eliminating Student Choice

This new “model” is a brazen attempt by publishers to further insulate themselves from market pressure. Malek justifies the forced-purchasing model by setting up a false dilemma: the choice between very expensive digital texts and slightly less expensive ones. He avoids the obvious third option—better and significantly cheaper digital learning tools.

It’s not a surprising omission: e-books are a publishers’ dream, as they’re often riddled with restrictive DRM and eliminate the booming secondary market of used and rental texts. Despite this fact, Malek claims that this new forced purchasing model will ultimately help students save money.

Yet by hiding textbook costs in the tuition bill, prices are even MORE likely to increase. According to the US Bureau of Labor Statistics, textbook prices have already risen over 500% over the past 30 years, at 3X the rate of inflation. Only three things have risen faster: tuition, tobacco and hospital stays. Do we really need another excuse to accelerate the rise of textbook prices by bundling them with something that is rising even faster?

Student loan debt has reached new heights in this country—additional mandatory costs are the last thing our college students need. In fact, this forced purchasing policy would increase the total mandatory cost at community colleges by 33%, where textbooks often make up a quarter or more of tuition, fees & supplies.

Is it any wonder that Malek doesn’t mention student sentiment in his discussion of the pilot programs of this new model?

Putting Students First

The best way to solve the “problem” of e-book adoption is creating MORE of a market, not further restricting competition. The future of education lies in building products for students—after all, they’re the ones whom the educational system is meant to serve. Thankfully, countless innovators and educators are putting in the hard work to realize the dream of a more student-centered design approach.

The Open Educational Resources movement has created an enormous library of 100% free content for students and professors alike. Open Content understandably does not compute for traditional publishers, as it can be both cheaper and more effective than traditional alternatives. Wikipedia, for example, often contains the same information (and more) than expensive introductory texts in a given subject.

Education technology companies have seen an unprecedented acceleration of venture investment over the past few years, topping $400MM in 2011 and potentially surpassing that this year.

New initiatives like MIT and Harvard’s edX are promising to distribute high-quality free content to learners around the globe. Companies like Kahn Academy are creating enormous content libraries that integrate deeply with the “super-adaptive” learning tools Malek praises—for $0. At Boundless, we’re committed to replacing textbooks altogether by connecting students with open content in new and exciting ways.

The Future of Educational Content

Desperate attempts to protect antiquated business models are not the answer. The solution is delivering great products for students.

The seeds of this educational revolution are being sown in classrooms, incubators and coffee shops all around the world.

It’s time to give students more choice—not less.

Source: Forbes