President Biden made a big deal simplification of fees:
THE FTC Proposes Rule it… would prohibit companies from charging hidden and misleading fees and require them to state the full price up front. The rule would also require businesses to indicate up front whether fees are refundable. This would mean no more surprise resort fees upon check-out or unexpected service fees for purchasing a ticket to a live event.
Like everyone else, I don’t like these kinds of fees, although I don’t think they’re a good subject for legislation. But I certainly wouldn’t prevent companies to offer simple, upfront fees. And yet, that is exactly what the Biden administration is doing in higher education.
So called Inclusive access The programs allow colleges to bundle textbooks with tuition and other fees. Students receive an invoice and have access to textbooks on the first day of college. It’s practical, no more searching for school textbooks or sticker shocks. Additionally, inclusive access programs give colleges bargaining power when negotiating prices.
Strangely, the Biden administration’s Department of Education wants ban colleges to offer inclusive access programs. So the Department of Education argues that simplified pricing is bad for consumers, while the FTC argues that simplified pricing is good for consumers. What makes this contradiction even more baffling is that inclusive access was a program promoted in 2015 by the Obama-Biden administration!
Supporters of the ban argue that letting students negotiate their own purchases allows them to better tailor the outcome. Maybe, but it’s the same argument for allowing airlines to separate seat selection and baggage allowances. Difficult to have it both ways. Pricing is complex.
Tyler and I are textbook authors then you might wonder where our interests lie. Actually, I have no idea. It is complicated. I suspect that inclusive access leads to a winner-takes-all textbook market. Modern principles win, so for those reasons I would be supportive. More generally, though, I would remove the FTC and Department of Education from pricing decisions and let colleges and companies negotiate. Pricing decisions are more complex and contextual than bans or simplified regulations.
