High Risk in the Inclusive Access Debate

The question should be around effective federal policy to improve course material access

Author

Phil Hill
April 03, 2024

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I’ll admit it to being a food and drink snob. I want my cappuccino cappuccino-size, my old fashioned with a single large ice cube and not a slush of tiny cubes, my egg yolks orange and not yellow, and my meal ingredients to come from several multiple grocery stores and markets. And I’ll toast Michael Pollan before enjoying that experience.

At the same time, I have to admit that Norman Borlaug’s work leading to the Green Revolution has led to dramatically increased crop yields, which has helped prevent hundreds of millions of deaths in the past half century due to decreased infant mortality and starvation. And many developing countries have become net food exporters due to these changes.

There are excesses that have followed from this movement and real problems to address with factory farming, but if I were to become President, should I issue an executive order or instruct an agency to reverse or decimate the Green Revolution advances? One choice would be to craft incremental, specific regulations to improve the food industry and provide guardrails, while the other choice would be to effectively gut those practices and push everyone towards my preferred eating style. The former risks not making a big enough change in factory farming, and the latter risks increased mortality and economic chaos. The choice is one of effective federal policy.

Personally, I would choose incremental improvements, despite my personal preferences, to avoid massive unintended consequences.

Likewise, if I were a student today, I would probably not be fan of Inclusive Access and definitely not a fan of its variation, Exclusive Access (where the costs of textbooks and required course materials are bundled into the cost of tuition and fees). But would it be better to craft incremental, specific regulations to put guardrails on the adoption of Inclusive Access or to effectively decimate that model? The former risks maintaining a promising but flawed system without sufficient change, and the latter risks reversing the gains and increasing the average costs of textbooks for students and making it less likely they will have required course materials at the beginning of a term. This choice is quite representative of a number of federal policy debates during this administration.

Like in the food case, I would choose incremental improvements, despite my personal preferences, to avoid massive unintended consequences. The US Department of Education (ED) appears to favor the more radical approach, despite the risks.

NegReg

This is the choice we are seeing in the Cash Management section of this year’s negotiated rulemaking sessions for Program Integrity and Institutional Quality. Should the ED create rules to make Inclusive Access more transparent and to provide guardrails, or should ED effectively dismantle the model and force institutions and publishers to find some other way to reduce costs and provide beginning-of-term access across the board?

What we are not seeing is actual negotiations, however. There are two sides to the debate over what to do with Inclusive Access, with negotiators representing essentially all institution types and related associations arguing for the incremental approach, and negotiators representing foundation-funded consumer protection activist groups arguing to gut Inclusive Access. Outside of the negotiations are additional interested parties, with publishers and college bookstores in favor of maintaining Inclusive Access options, and many librarians disliking that option.

ED is not acting in a manner to get input from negotiators and figure out the best federal policy that minimizes risks; instead, ED appears to be in the camp of the activists, as can be seen from the initial proposal, which starts out by elimination.

Eliminate the provision allowing institutions to include the cost of books and supplies as part of tuition and fees (§ 668.164(c) and (m)). Current regulations permit schools to automatically charge students for books and supplies as part of tuition and fees, without student authorization, even when the materials can be obtained from a source other than the institution. The regulations permit these charges if the school has a contract with a third-party publisher or retailer, offers the books “below competitive market rates,” and gives students a way to opt out, so long as the student can obtain the books and supplies by the seventh day of the payment period. The Department is concerned that lack of disclosure and transparency limits students' ability to find less expensive materials or assess if their school is offering the most affordable arrangement. Under the proposal, we would maintain the allowance for including books and supplies in tuition and fees when institutions demonstrate there is a compelling health or safety reason, or if the institution is the only option for students to access the books or supplies.

Arguments Keeping the Model With Modifications

Jason Lorgan, the negotiator representing public four-year institutions, provided arguments on why this elimination would be harmful.

The proposed regulation updates would effectively gut these programs by making it much more difficult for students to apply their federal student aid to course materials, undermining the successful legacy of a key Obama-Biden era campaign promise to bolster quality and affordability in higher education.

Affordability and access programs will, of course, continue to improve and evolve over time. We are committed to enhanced transparency and disclosure for students. But there is simply no good reason to threaten the extraordinary progress that these programs have made in terms of affordability and improved student outcomes over the past eight years.

In a separate proposal from negotiators representing all institution types, there were specific recommendations made to address ED concerns over transparency and student choice.

Arguments to Kill the Model

On the other side, the consumer protection groups think ED did not go far enough [emphasis added].

As noted, we strongly support the Department’s efforts to revise this section of the federal rules to make them more student-friendly and ensure that students can get the full value of the aid they are entitled to. We urge the Department to move forward with eliminating §668.164(c)(2)(i) as proposed, and to go even further and eliminate §668.164(c)(2) in its entirety. While (i) eliminates the most significant concerns for students, the remaining two exceptions under (ii) and (iii) create unnecessary loopholes that the textbook industry could exploit. As came up in discussion during negotiations, there is ambiguity over what a compelling health or safety reason would be or how to determine whether materials are available elsewhere. Students should have the right to choose how their Title IV aid is used and where they will purchase their course materials, period.

Final Draft

In the end, ED proposed language that would mandate an opt-in model for course materials to be included in tuition and fees for financial aid purposes, along with prior notification of costs and guarantees of below-market rates. This would eliminate the Inclusive Access model used by 99% of institutions adopting it, one based on opt-out.

The amount incurred by the student for the payment period for purchasing books, supplies, and other educationally related goods and services provided by the institution for which the institution obtains the student's or parent's authorization under § 668.165(b)., provided that –

(A) For each payment period, the institution individually discloses the cost of such books, supplies, and other educationally related goods and services to the student prior to any authorization being signed and the student or parent chooses to purchase those materials provided by the institution; and

(B) The institution makes those books or supplies available to students at or below competitive market rates

There was no consensus on this language. Essentially all negotiators representing higher ed institutions pushed back, with one memo stating that these changes would eliminate the cost savings and gut Inclusive Access.

The opt-out structure underpinning these access programs has allowed publishers the economies of scale necessary to offer bulk discounts that would otherwise not be available to students. As a result, affordable access programs have been credited with helping to bring down student spending on course materials by an astounding 57 percent in less than a decade and most programs offer better terms and features than found in the retail marketplace, including free access each term through the add/drop period. [snip]

Instead of advancing regulations that could have unintended consequences for college costs and make it more difficult for students to succeed academically, we strongly urge the Department of Education to preserve the existing structure of access programs while working with institutions and stakeholders to advance commonsense modifications that enhance transparency and protections for students. Any regulatory actions must not compromise the integrity of access programs nor harm institutions’ ability to continue offering these convenient, popular, and affordable programs.

In other words, ED stuck to the approach of decimating Inclusive Access. There was no agreement or consensus from this group, and in my reading, there was no attempt to reach consensus. ED is choosing to believe its activist allies over the nearly-united voice of those representing higher education institutions of all types.

What Comes Next

ED now has the freedom to draft the rules it wants and release them likely in June. It is possible that ED will have a change in heart behind closed doors, but by all outward appearances the department is set on removing Inclusive Access options.

If that happens, we are likely to see a whole new set of “unintended consequences” that end up increasing student costs for textbooks and course materials. A high risk move based on the preferences of a small group of activists. We would have been better served with actual negotiations and attempts to listen to the broad set of negotiators in the meetings, especially those on the front lines of actually educating students.

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