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During test-optional college admissions, exam-prep companies still thrived

1 day ago
By Sam Becker,
Features correspondent

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Student prepping for SAT exam (Credit: Getty Images)
Standardised tests such as the SAT and ACT have been optional at many US colleges
since 2020. But many applicants still took them – and paid a premium for higher
scores.

For many students in the US, applying for university means sitting for a long,
often gruelling standardised tests that could make or break acceptance to their
dream school. These tests – commonly the SAT, ACT and Advanced Placement (AP) exams
– have been around for decades.

For most students, these exams require a lot of preparation, both to learn the
format and the material. As such, many of the millions of American students who
take them each year rely on test-prep companies, which help them crack the exam and
boost their scores.

This instruction comes at a premium. While some free and low-cost exam tutoring is
available, many of the largest companies run group sessions that can cost between
$600 and $1,500 (£480 and £1,205) or beyond, depending on duration – or on the
extreme end, run into the five figures for private tutoring at the most elite
levels. The test prep industry is expected to reach a value of nearly $50bn
(£39.6bn) within the next few years.

According to the College Board, which develops and administers standardised tests,
2.2 million American students in the class of 2019 took the SAT, an increase of 4%
over the past year. It was the largest group ever. During the pandemic, however,
amid mass cancellations at testing centres and disruptions in the college
admissions process the exams became optional at many US institutions – in most
cases, for the first time. Since 2020, they have largely remained voluntary. Since
the policy change, the number of students who took the SAT dropped by thousands;
for instance, in the class of 2022, only 1.7 million students took the exam.

Yet test-optional admissions policies are on the way out. In April, leading US
institutions Harvard University and Caltech announced they would once again require
first-year applicants to submit scores from either the SAT, ACT, AP or
International Baccalaureate (IB) exams. This followed similar announcements from
Yale University, Dartmouth College and Georgetown University earlier in the year.
Other colleges are expected to follow suit.
On its face, this is good news for the test-prep industry, which stands to benefit
from customers keen to ace once-again compulsory exams. But experts in the industry
say these companies' bottom lines held surprisingly steady during the four years of
test-optional admissions. In fact, many of the test-prep industry's largest players
emerged largely unscathed. That's because some students continued to take the exams
and pay for the prep courses. Many were betting that even though test weren't
required, reporting solid scores would put their applications at the top of the
pile. And by and large, they were right.

Getty Images Companies including The Princeton Review still saw a swath of students
eager to prepare for the SAT and other similar college entrance exams (Credit:
Getty Images)Getty Images
Companies including The Princeton Review still saw a swath of students eager to
prepare for the SAT and other similar college entrance exams (Credit: Getty Images)
'The ups and downs'
Despite optional testing policies throughout the past four years, many students
continued to prepare for, and subsequently take, entrance exams such as the SAT and
ACT. Where some students saw an opportunity to forgo submitting scores, many others
ploughed ahead as if nothing had changed. This was particularly the case for those
in higher income brackets.

Data from the College Board shows that during 2022, 46% of students who took the
SAT came from either the highest (more than $110,244 [£88,678]) or second-highest
($83,766 to $110,244 [£67,379 to £137,054]) quintile in terms of median family
income. During 2023, these figures were nearly identical. Comparatively, only about
10% of SAT test-takers during those two years came from the lowest earning quintile
($53,263 [£42,838] or lower).

"Students coming from the highest income levels not only took the SAT more than any
other group, but they scored the highest," says Sara Harberson, a former dean of
admissions at Pennsylvania's Franklin & Marshall College, and a college admissions
expert. Many students from these higher-income groups continued to use test prep
services while the exam was optional in the same way they would have in the pre-
pandemic landscape.

"It is clear that parents' income directly impacts a student's ability to take
standardised tests and perform well on them," she says. "Despite most colleges
being test-optional these last few years, colleges have clearly valued students who
report test scores – and high scores at that. The wealthier students were at a huge
advantage as they were more likely to take standardised tests during the pandemic
and perform better."

Business for most exam-prep companies – including both The Princeton Review and
Kaplan, executives at each company told the BBC – hummed along as students
continued to take high-priced classes, just as they would have pre-pandemic.
Throughout the test-optional years, industry leaders say many students were advised
by both experts and parents to act as if nothing had changed in order to stand out,
especially if their kids were applying to highly selective colleges, which saw a
spike in applicants during the period.

Getty Images Some test-prep classes are online, while others are taught in person
(Credit: Getty Images)Getty Images
Some test-prep classes are online, while others are taught in person (Credit: Getty
Images)
"I had to tell parents that they needed to invest in test prep," says Harberson.
"Scores matter in this landscape so much that if a family needs to choose how to
spend money in regard to the college admissions process, I want families to invest
in test prep."
"Despite shifting college admission requirements, The Princeton Review never
pivoted away from providing students with resources for the SAT and ACT," says Rob
Franek, editor-in-chief at The Princeton Review, one of the largest test-prep
companies in the US. "Over the past four years, more than 13 million students took
the SAT and or ACT… Test scores have continued to matter to colleges."

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He says test scores also matter in determining tuition factors such as financial
aid, scholarships and grants, so many students continued to take the exams when
they were optional. In a survey released from The Princeton Review in February, 36%
of respondents said financial aid was their main reason for taking the standardised
exams. "With 98% of our respondents reporting they will need financial aid to pay
for college, we think this is a very significant reason students are taking the SAT
and ACT."

Preparing for a new era

Even as revenue has remained relatively steady throughout the past four years, the
restoration of past exam policies should help drive more customers. "As many of
those schools have come back to making it a requirement, that has led to a surge
again in that business," says Steven Marietti, the chief commercial officer for
supplemental education at Kaplan, which has operated for 85 years.

A revamped SAT for 2024 – now shorter and digital – offers even more potential
revenue. While the exam will remain similar at its core, even minor changes have
sent students scrambling to prepare. Harberson says the changes are a business
boon: "I guarantee the test-prep industry has gotten a big boost."

And as college admissions change with more applications than ever, exam scores may
be more important than ever. "Colleges are spending four or five minutes on an
application," adds Harberson. With so little time to take everything into
consideration, "students better jump off the page".

--

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