Thoughts on OER and Cost Savings

Yesterday, Phil Hill wrote about OpenStax’s new method for calculating the savings students see when their faculty adopt OER.

His article highlights these paragraphs from Rice University’s recent press release:

Our community is creating a movement that will make a big impact on college affordability. The success of open textbooks like OpenStax have ignited competition in the textbook market, and textbook prices are actually falling for the first time in 50 years.

As a result of the unprecedented downward shift in textbook prices, OpenStax will be decreasing its estimated student savings figure from $98.57 to $79.37 based on federal data. The U.S. Department of Education’s National Center for Education Statistics published a study in May stating the average undergraduate student spent $555.60 on required course materials for the academic year. Dividing that number by seven courses (the undergraduate average, according to enrollment data) comes out to $79.37 in savings for each student using an OpenStax book.

I agree with Phil that it’s great to see OpenStax updating the baseline from which they calculate student savings.

What strikes me as odd about OpenStax’s new way of calculating the savings associated with OER is that it ignores some fairly important and well-understood things about student spending when faculty adopt OER – things OpenStax has a made a pillar of their long-term sustainability plan. And if you’re going to update the way you figure savings, why not fix all the issues with your savings estimate at once?

In her 2010 whitepaper for the Student PIRGS titled A Cover to Cover Solution: How Open Textbooks are the Path to Textbook Affordability, Nicole Allen estimated that students whose faculty adopt OER spend, on average, $27.68 (see Table 3, page 12). This figure is explained further in the section titled “Open textbooks could reduce costs by 80% overall.” (Spoiler: some students purchase a printed version of the open textbook, some students spend money printing chapters themselves at Kinkos, etc.)

This research is now eight years old and definitely needs to be refreshed. Student attitudes toward print and reading online have likely changed. The cost of purchasing a printed copy of an open textbook may have changed, though the average price of a printed OpenStax title doesn’t seem to be any lower than the average price of the Flat World Knowledge titles Nicole’s research examined. But regardless of how and how much these indicators have moved, the main point here is this – the amount of savings that come from OER adoption does not equal 100% of what students would have paid for other materials.

While the field more broadly desperately needs an updated version of Nicole’s research, OpenStax does not. They already know how much money students spend when their faculty adopt OpenStax.

OpenStax is quite public about the fact that print textbook sales and the revenue generated through OpenStax Partner vendors play an important role in their sustainability model. (See their FAQ). They’re using these revenue streams to sustain their organization, so they obviously know exactly how much of this revenue they’re receiving. Some percentage of students who use OpenStax purchase a printed copy from Amazon. Some percentage of students who are assigned an OpenStax book purchase a homework solution from a vendor who is an OpenStax Partner.  The percentages of students who are making these purchases must be fairly high, or it wouldn’t be much of a model for sustaining a 50+ person organization.

My question is, as long as they’re updating their savings estimate, why not account for the money students spend when their faculty adopt OpenStax? If the average student using OpenStax is spending $30 on a printed OpenStax book or on a homework system from an OpenStax Partner, why not decrease the savings estimate by $30? Or $25? Or whatever the number is?

Savings from OER should be calculated as “the amount of money students would have spent” minus “the amount of money students did spend.” We know that last number isn’t $0. OpenStax’s sustainability model is predicated on that number not being $0. Yes, in the early days of the field many of us (first person inclusive) estimated cost savings as if students whose faculty adopted OER spent $0. But we know better now. Why won’t we say it out loud?

Why does it matter how we calculate savings, you may ask? The way we calculate savings estimates is incredibly important for us as a field. As our estimates of student savings from OER grow larger and larger, they are more likely to catch the eye of policymakers and others who will subject them to rigorous review. If our savings estimates don’t stand up to basic scrutiny, the credibility of the rest of our work will probably also be called into question. We don’t need that headwind.

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