Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Dec 27, 2012

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Across the country, college textbooks are the bane of cash-strapped students who are already dealing with student loans. These books can cost hundreds of dollars, forcing students to spend a thousand dollars or more each semester on books alone. This can cause students to devote a large amount of their student loans to just books. Some students may borrow more student loans simply to cover the costs of books.

While the high price of textbooks is profitable for publishing companies, those prices present challenges for students already burdened by the high cost of their education. Fortunately, these challenges have been met by enterprising e-textbook publishers.

OpenStax College, a nonprofit organization, is ready to take on textbook publishers by offering low-priced but high-quality electronic textbooks for $4.99, which are viewable on computers and iPads. The organization also offers low-cost physical versions of the textbooks for students and learners that do not have access to computers or tablet PCs.

“About 3 or 4 years ago, [OpenStax] supporters, like the Bill & Melinda Gates Foundation and the Hewlett Foundation, really wanted to cross over to the mainstream. What we decided to do was create material that was at the highest quality for faculty to adopt,” said David Harris, OpenStax College’s editor in chief, in an interview with loans.org.

The organization’s name was born from a single negative experience. According to Harris, the organization’s founders were touring different college campuses. At one campus the group was surprised to find that stacks of books had been cordoned off. The group was later told that the stacks had been cordoned off in order to prevent students from stealing the expensive books. Galvanized by this experience, the organization’s founders vowed to “open the stacks” for students.

The Book Race

Despite their innovative fervor, OpenStax isn’t the only proverbial horse in the race to overtake traditional college textbook publishers. They will be competing with Flat World Knowledge, another college textbook provider. Unlike Flat World Knowledge though, OpenStax College is nonprofit and open license. As these two competitors battle it out, they will have to contend with ongoing innovation since the future of textbooks may very well lay in electronic formats.

“We definitely see a move toward digital. The reality is that the use of digital is very varied,” said Harris.

To deliver their product to the greatest number of students, OpenStax has offered its materials in epub, PDF, and iPad-accessible formats.

OpenStax may have another card up its sleeve that can place it well ahead of any competitors.

The organization has partnered with WebAssign, an online class work assignment service. This allows students to read chapters on OpenStax’s e-textbooks then seamlessly transition to assignments that can be completed online, all from the convenience of a computer or iPad. This streamlined transition from assigned reading to class work has reaped impressive results.

“We have close to 100 schools now using college physics and sociology books. In the physics area I would say approximately 60 to 70 percent of courses are using WebAssign. It’s been tremendous,” said Harris. “We estimate that student savings already exceed $1.5 million. The savings are now greater than the resources required to publish.”

It takes OpenStax roughly 12 to 18 months to create a textbook. According to Harris, textbooks undergo a rigorous development process where they are created by hired faculty. All content undergoes peer review.

“Without quality it is not going to be used. If it’s not used, it’s not part of the solution,” said Harris.

The new e-textbook industry’s arrival can partly be attributed to the booming tablet computer market that has sold millions in recent years. Apple touts that it has sold a whopping 14 million iPads during the Fourth Quarter of 2012.

However, the fact that OpenStax even exists (along with the existence of the entire burgeoning e-textbook industry) begs the question: why are college textbooks so expensive to begin with when publishers surely know students are already burdened with ever-increasing student loans?

A Pricey Past

According to Harris, the 1990s saw a rash of publishing acquisitions and consolidations. Amidst this corporate merging was also a merging of debt. The cost was passed down to students in the form of higher textbook prices.

On top of that, computerized assessments, CDs, and accompanying DVDs have also raised the costs of modern textbooks. That increase in material combined with the fact that publishers can only sell a textbook or e-book for one or two semesters before necessitating an updated version, means that publishers are able to continually justify their raised prices—a costly impact on already cash-strapped college students saddled with student loans.

As the student debt crisis continues to bubble and fester, young borrowers will need to wisely spend their student loans amid the soaring costs of college tuition. Borrowers with student loans will save thousands if organizations like OpenStax increase their product lines. Being able to obtain a college textbook in convenient electronic formats for only a few dollars is going to be a welcome relief to many students. They can only hope that such innovation continues to spread to student loan financing.