Cengage Unlimited Subscription Has Saved Students $125 Million

Savings expected to grow to $160 million by the end of the current academic year

Cengage Unlimited Subscription Has Saved Students $125 Million

Source: Cengage

Sixteen months after its launch, education and technology company Cengage has sold 2 million Cengage Unlimited subscriptions, saving college students an estimated $125 million in digital textbooks, ebooks, study guides and other online resources. The subscription program is expected to save students a total of $160 million by the end of the current academic year. The subscriptions are all-inclusive. For one flat-rate, students get unlimited access to Cengages full library of online materials for a term, ranging from four months to two years.

4 months $119.99

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In addition to online course materials, subscribers get:

  • 30-day Chegg study pack and 60 minutes of tutoring
  • Access to the online textbook library featuring more than 22,000 resources via the Cengage Mobile app
  • $7.99 print textbook rentals with activated courses with free shipping
  • Test prep, study guides and flashcards
  • 6 months free of Quizlet Plus
  • College success and career resources
  • Free 6-month access to Evernote Premium (otherwise $7.99 a month)
  • Free Dashlane Premium to save passwords ($4.99 a month, billed annually)

In a January 6 news release, the Boston-based company listed the five colleges where students have saved the most using Cengage Unlimited:

  1. University of Alabama – Tuscaloosa – $1.8 million
  2. Texas A&M University – $1.7 million
  3. North Carolina State University – $1.1 million
  4. Arizona State University – $853,000
  5. University of Houston – $836,000

Cengage also shared the top savings per student:

  1. University of Illinois – $256
  2. University of Findlay, OH – $182
  3. University of Connecticut and Gaston College (NC) – $179
  4. Saddleback College, CA – $175
  5. Spokane Community College – $172/student

Cengage Unlimited Subscription Has Saved Students $125 Million

Source: Cengage

“The college affordability crisis is impacting students and colleges across the country. It’s clear the entire ecosystem must pursue innovation to deliver students more value for their money,” said Cengage CEO Michael E. Hansen.

“That’s why we created Cengage Unlimited: to offer students affordable access to quality learning materials and other resources needed to excel in their studies, graduate and find a job. The number of subscribers and savings to date shows that Cengage Unlimited is making a real difference for them, Hansen added.

Cengage announced its subscription program in December 2017 with the program going live in August 2018. At that time, CEO Michael Hansen said the high costs of education were limiting for too many students, making college unaffordable or forcing students into additional debt.

With Cengage Unlimited, students finally have an alternative to the traditional and costly approach of paying for each courses materials individually. We are taking unprecedented action to break down cost barriers and end the cycle of students having to choose between course materials they can afford and the results they want, Hansen said.

Despite the companys success, Cengage has had legal challenges since announcing its unlimited textbook subscription. The first came when textbook authors David Knox and Caroline Schacht filed suit in the United States District Court Southern District of New York in May 2018, three months before the subscription service launched. The authors sought class action status for their cause which alleged the that Cengages Unlimited subscription would cause their sales and royalties to drop substantially. Cengage denied the allegations, and the parties settled the lawsuit in October 2018.

Fast forward to August 2019 when another group of textbook authors filed a class action lawsuit in the same court, alleging that Cengage was not paying them according to their contracts but is, instead choosing how to pay royalties and from which pool of money. They asked the court to award damages and restitution for unpaid royalties for the Cengage digital product. Cengage disputed the allegations.

In an excerpt of their rebuttal, Cengage said, We have communicated clearly with our authors that the subscription service is consistent with the terms of their contracts, which we continue to honor. Since the service launched, we are in regular communication with them about the impact of the subscription on their royalties.

Insider Take:

We are pleased that the subscription model seems to work well for Cengage, students and universities and that students are, collectively, enjoying big savings from subscribing to Cengage Unlimited. There is always concern, however, when owners of intellectual property allege that they are not being paid fairly for their work. As we noted in our August 19, 2019 column, the usage of intellectual property can be more challenging to measure than the use of physical property. We hope that companies like Cengage, Spotify and Apple Music are compensating authors and artists according to their contracts, so that both sides of the equation benefit. When the parties dont agree on whats fair, the courts should decide.