Renting textbooks used a growing trend

By Gina Belmonte

With college textbook prices rising at twice the rate of inflation, students have sought alternatives to keep textbook costs from emptying their pockets. Textbook prices in university bookstores increase annually by about 6 percent per year, according to a study by the U.S. Government Accountability Office.

Circumventing campus bookstores, some students have turned to the used-book market online, and recently a new alternative has emerged: textbook renting.

Since 2006, book rental services have sprung up as a way to help students save money on textbooks, as much as 60 to 80 percent, the services claim. Santa Clara offers no textbook rental system, and few universities do.

Approximately 25 colleges and universities in the nation offer textbook rental programs, but that is still less than 1 percent of higher education institutions, according to the Illinois Board of Higher Education.

With new editions released annually, keeping textbook prices high, students spend an average of $898 on textbooks each year, according to the GOA. Still, the high prices may be preventing students from purchasing some books altogether. The National Association of College Stores found that nearly 60 percent of students nationwide do not buy all the required course materials.

For students who attend a university without these book-rental programs, online services are replacing the traditional book-buying process. The handful of online services available also try to win over consumers by pledging to be eco-friendly in their attempts to recycle and reuse textbooks.

Chegg.com, an online book rental service based in Santa Clara, plants one tree for every book rental. Launched in July 2007, Chegg has student subscribers from over 1,000 campuses nationwide and has helped plant over 100 acres of trees in cooperation with Eco-Libris, a member of the Sustainable Business Network of Greater Philadelphia dedicated to reforestation. Originally Textbookflix.com, a textbook exchange service in 2003, Chegg changed its name and became a rental service in 2007.

Frustrated with the rising costs of textbooks, Chegg co-founder Osman Rashid came up with the idea to start up a textbook rental company while attending the University of Minnesota. Rashid teamed up with fellow student Aayush Phumbhra, vice president of Chegg, to make textbooks more affordable.

Chegg's collection includes millions of titles, but the company focuses on the most popular titles used nationwide in introductory courses, said Maria Reiling, vice president of marketing at Chegg.

Often times, Chegg rental prices are half the price of used books at the university bookstore. For example, "Looking Out/Looking In," the text required for the introduction to interpersonal communication course, rents at $35.13 at Chegg, compared to the bookstore used price of $73.15 and the new price of $98.35. "International Politics on the World Stage," the book required for the introduction to international relations course, rents at $22.80 on Chegg, while the bookstore sells it for $48.75 used and $65 new.

Natalie Bosque, a Santa Clara subscriber to Chegg, said she saved a little over $400 with Chegg, spending a total of about $200 in one quarter compared to the estimated $600 total from the bookstore.

Chegg offers rentals for both semester and quarter periods, and the company allows for a 15- to 30-day period of return for students who may drop a class. Chegg's rental process allows students to order the books, receive them through the mail, use them until the end of the term and return them with their pre-paid label. Subscribers may not highlight more than a quarter of each page.

Books are typically rented and reused two to three times, said Reiling. Chegg is sponsored by venture partners Mike Maples and Sam Spadafora, and has partners in the publishing industry.

Ultimately, it is the publishing industry that sets book prices, said Deborah Kendall, manager of the campus bookstore.

Prices increase according to rising costs of paper, manual labor and production, and other factors. All in all, the bookstore only makes about 2 percent net profit from the sale of books, Kendall said. Chegg, a for-profit company, declined to disclose its profits or revenue.

The university has not considered a textbook rental service because it has not been suggested, said Jane Barrantes, assistant vice president of Auxiliary Services.

However, adopting a university rental service at Santa Clara could be a "huge monetary investment," said Kendall. Because the university bookstore is operated by Barnes and Noble, the university would have to withdraw its contract or take specific action to implement a rental service program, she said.

San Mateo California Community District, which includes Skyline College, the College of San Mateo and Cañada College, is one of the few institutions nationwide to have adopted a textbook rental service in 2006. The program is funded by large state grants, but also solicits private donations to build a large bookstore inventory, according to the bookstore's Web site.

This year, the university developed the Book Advisory Committee, comprised of students, faculty and staff, to discuss suggestions for the bookstore, Barrantes said.

Barrantes said she was interested in learning how other schools are able to implement a rental program and said it would be a good idea to bring up to the Book Advisory Committee.

"It would have to make a good business case, and of course serve students, and should not violate the contract with the bookstore," said Barrantes, adding that the bookstore will negotiate contract terms over the next couple years.

Contact Gina Belmonte at (408) 554-4546 or gbelmonte@scu.edu.