Henry Ford once said, "The highest use of capital is not to make more money, but to make money do more for the betterment of life." This phrase is very significant for the average Rutgers student. Ford is saying that the most efficient way to use resources is to ensure that money spent enhances and improves life. Rutgers is the epitome of this phrase. Since its opening in 1766 Rutgers University has been a great educational value. "Rutgers has always been for poor boys.People without capital.In that sense it was a great educational opportunity."(Gang FT2) Many of the students that enter Rutgers come because of the relatively low cost and the close proximity to their homes. But, to the bereavement of many students the financial relief that came with a Rutgers education is getting harder and harder to reach. As we enter the 21^st Century one of the largest problems at the State University of New Jersey is going to be the rising costs that each student faces.

There are many types of costs that an institution of higher education faces. Faculty salaries, research costs, facilities maintenance costs, technological upgrades, and student services are just a few. Many of these costs are covered by federal and state grants, but students must pay for the remainder. Student costs at Rutgers having been rising exponentially over the past decade. As can be seen in Figure 1, between 1988 and 1998 the cost of tuition, and room and board alone has increased $4795.00. This reflects an increase of 172 percent over the ten-year period. This is due to rising costs and a decrease in federal and state funding sources. Tuition, Room, and Board aren't the only costs that students incur. There is also a large amount of fees that students pay each semester. Rutgers College students pay $545.25 each semester for student activities, athletics, transportation, and other costs. These fees have been rising consistently in past years also. (Kirschner 1) For example the Rutgers College Student Centers Operations fee rose $1.50 per semester from the 1998-1999 to 1999-2000 academic years. There is also a proposed fee increase of $4.00 from the 1999-2000 to 2000-2001 academic years. This represents an increase of 11.5% over three years for Rutgers College students. (Breitman 1) Coupled with these college fees, students must also pay University wide fees that have also been rising exponentially in previous years. The University computing fee was $25.00 per semester for 1997-1998. It was then raised to $50.00 in the 1998-1999 academic year, and then to $100.00 for 1999-2000. This is an increase of 400% in two years. (Haska 1)

Besides the University based fees that students incur is another set of mandatory costs. These include books, which are essential to education, and items used in everyday life. These costs have also risen tremendously over the past few years. Books and the like are used in virtually every class, and professors expect students to buy them. The cost of books has risen tremendously in the past decade. In 1988 a student could have expected to spend around $450.00 on books per year. In 1998 the average student paid nearly $1000.00 on books per year. As can be seen in Figure 2, there was a 10% increase per year in book costs from 1988 to 1998. The initial cost of books is high for students but the greatest loss of money is through the depreciation of books over the semester.The bookstores offer an end of the semester book-buyback, where they buy books back from students for cash. Although many students keep their books in near perfect condition, the bookstores often only offer a maximum of 50% of the purchase price during buyback. Essentially a chemistry student that buys $500.00 worth of chemistry books will only get a maximum of $250.00 at the end of the semester. The bookstore will then take these books and sell them to another student the following semester for a higher price. This continues for many semesters until a book is no longer usable, or the academic department changes books or editions. The eventual loss of money to students is as tremendous as the amount of sheer profit that the bookstores make on buybacks. Bookstores justify the cost of books by saying that the amount of profit that they make on each book is minimal. Figure 3 shows the breakdown of each dollar spent on a textbook. The justification of the bookstores is flawed however. The breakdowns they provide only reflect the original purchase of the book and not the turnover from book buyback. The earnings from buyback are close to 100% as overhead for buyback is minimal. This money becomes a complete and unnecessary loss for students.

Figure 2                   Source: Rutgers Office of Institutional Research

These fiscal stresses are problems that most college students around the country face. A simple solution to the problem of the high costs of higher education is to just lower costs. Any amount of money that a student saves from $10 to $1000 is significant. The savings translate into a meal or less to payback in student loans. To lower tuition or student fees is not simple though. These fees provide funds that a University must have in order to operate and excel. Lowering other costs for students isn't as complex though. Lowering the cost of books seems like a good place to start. A handful of other universities throughout the country have realized this, and started programs that help students save money when purchasing, repurchasing, or selling books.

RESEARCH

The rising costs of higher education are a chief concern for student leaders around the United States. Tuition, student fees, and room and board rates have been rising exponentially since the mid-1980's. Student leaders have found that by helping their peers save money on books, they have in turn lessened the burden of the financial responsibility that each student faces. Students presently use the bookstores as an intermediary that buys books from one individual and resells them to another. It is a proven economic theory that the presence of intermediaries raises transaction costs (Mishkin 8). "The presence of transaction costs in . markets is explained in part by . intermediaries.and their role in markets" (Mishkin 201). By eliminating this intermediary through the use of trading systems, many universities have effectively saved students these "transaction costs" - the bookstore's profit. Although this does not solve the overall problem of skyrocketing costs, it gives students hope, and helps them pay their bills in the short run. Therefore, an effective way of saving money on books is to provide a channel for students to barter or sell books directly with one another.     

"Barter occurs in the absence of money.or where there is not enough money to go round" (Humphrey 4). What phrase would better exemplify a college campus, other than a place where there is not a lot of "money to go round." Barter is a system of trading that has been used for centuries. It started as a way to obtain an item or service that one wants, but is willing to give up another item or service for. Simple forms of bartering are used everyday by people of all ages. For example when kids trade baseball cards and when major league teams trade players, barter transactions have taken place. The transaction costs of bartering are minimal. Students would be able to trade or barter books with each other for virtually no cost.

Many student leaders throughout the country have implemented systems that provide a way for students to barter or sell books to each other. All of the systems are based on the Internet, which provides for a fast and effective way of communication. Texbooks, "The Official University of Texas Book Exchange" was the first book exchange system on the Internet. The system allows sellers to post the name of a book, its condition, the course it was used for, their selling price, and their contact information. Buyers then go to the website, www.texbooks.com, and search for books. Buyers can search for posted books referenced by academic department. For example a buyer wishing to buy a book for an Introductory Accounting course, would search through books that have been used in courses offered by the Accounting department. When the buyer sees a book posted that they are interested in, they contact the seller - usually by email. The two parties then determine the logistics of actually exchanging the book. They can barter one book for another, pay the seller in cash, or a combination of the two. The website replaces the bookstore as the intermediary at absolutely no cost to the buyer and seller. Systems directly based upon "Texbooks" have been implemented at Northwestern, Boston University, and Princeton. Similar systems have been recently introduced at the University of Toronto.

There are also many commercial companies that specialize in book exchanges. Bookswap is one of the most popular sites with over 145,000 users. (Bookswap website). This site allows student leaders to sign up their respective University at the Bookswap main website. Bookswap will then develop a website geared towards that college for free. For example if Rutgers was to sign up at the Bookswap site, a site in scarlet red, named the Rutgers Bookswap would be created. The student leader is only responsible for linking to the site, and maintaining an advertising campaign to attract students to the site. Bookswap allows students to buy and sell books to each other through the site for free, while making profit by selling advertising space on each website. Other major Internet companies such as Amazon.com have started similar sites. Amazon's site is named Exchange Books and provides users options similar to those of Texbooks.

All of these sites have seen tremendous results. Texbooks boasts "40,573 visitors since April 25,1998" (Texbooks website).  The Boston University site, www.textbookexchange.com, shows "15,356 visitors since January 1999" (Textbook Exchange website). As can be seen above in Figure 4 many Universities have experienced similar success. The numbers of visitors to each site shows how well received and used they have been. The numbers of books posted is also phenomenal. As seen in Figure 5 these impressive numbers show that students are using the site as a no-cost intermediary to buy and sell books. The University of Toronto's website also reports that "758 books have been sold through this website" (University of Toronto Book Exchange Website).

As can be seen in the chart below, the statistics for the commercial sites have higher numbers in visitors to the site, and number of books posted. The main reason for this is that the sites serve the worldwide online community. The University based sites, although open to the public, generally attract local students. The problem with the commercial sites is that there may be transaction costs for the buyer or seller. This includes postage and the risks involved with sending cash through the mail, getting bad personal checks, or never receiving a book. 

Another interesting way to exchange goods on the Internet is through auction sites such as www.ebay.com. As its website states Ebay is "the world's first, biggest and best person-to-person online trading community." (Ebay website) This "trading" community allows users to buy and sell anything they would like, from books to automobiles. There are no costs for buyers at this site, but sellers have to pay a nominal fee. Contact between two individuals can be made in any way they deem proper. Buyers are able to bid on goods with other buyers from around the world. This ensures that the seller gets the best price, and buyers get an item when it is at the price they are willing to pay. The variety of goods offered at the site attracts a larger number of visitors, and still serves as an intermediary between people.