The standardized-test smackdown

The makers of the SAT and ACT are fighting for market share as more college-bound students sit for entrance exams.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By David A. Kaplan

9 green certification programs
These community colleges, bolstered by federal funding and industry demand, are partnering with companies to train the green workforce.
How has the $787 billion stimulus package affected the economy?
  • It has aided a recovery
  • It has made the situation worse
  • It has had no impact
  • It's too soon to tell

(Fortune Magazine) -- On the first Saturday in December, thousands of high school students will undergo that American rite called the SAT. A week later thousands more will take the ACT.

Despite burgeoning criticism of standardized testing, both exams remain key hurdles for getting into college. Students know that strong scores put you in the "good" pile at the Harvard admissions office and that weak scores can mean second-tier oblivion. But in addition to the race to the Ivies, another competition will be under way between the exams themselves and the nonprofit empires built around them.

The College Board -- which owns the SAT -- and American College Testing -- which owns the ACT -- are now engaged in an undeclared war for market share and mind share. And remarkably, the vaunted, venerable SAT is on the defensive.

The SAT, designed in theory to democratize admissions, has been around for more than 80 years. The ACT was created more recently, in 1959, and aimed at measuring classroom achievement rather than innate ability; for years the test was popular only in the Midwest and surrounding states.

Not until the last decade did the ACT pose a real challenge to SAT supremacy. For the high school class of 1999, the SAT/ACT share was 54.5% to 45.5%. For the class of 2009 there was virtual parity.

Both organizations still were doing just fine: The number of test takers had grown by almost a third (to more than 3 million), and the heads of both organizations earned salaries above $500,000.

Though a nonprofit, the College Board -- an organization that took in $631 million for the fiscal year, producing $57 million in "excess" (profit by any other name) -- couldn't ignore its loss of market share.

This fall the College Board launched Score Choice, which allows students to hide bad scores from universities -- something the ACT has always permitted.

It used to be that when you took the SAT more than once, all scores were reported. Now students can send only their best score from a single test date. The College Board said its goal was to "reduce stress." But the policy presumably would also mean more repeated tests.

The College Board denied any economic motivation, though internal e-mail indicated otherwise. In one message that became public, Laurence Bunin, a senior vice president, referred to "less kids taking the SAT ... threatening the viability of the program itself." The College Board declined to comment to Fortune.

For its part, the ACT insists it's not in a competition. "Our crazy philosophy is to try to keep up with students' needs," says Jon Erickson, a senior vice president. Of course, more students taking your test suggests you're meeting their needs, so market share becomes synonymous with mission. Neither group will disclose test-taker numbers for this fall. So it's impossible to tell whether Score Choice is paying dividends.

Critics of the arms race say it's the wrong question. "It's not clear how any of this is benefiting students," says Bruce Poch, vice president and dean of admissions at Pomona College. "In a traditional market, you choose the best product. Instead, here, consumers now are choosing both products." It's a great deal for two thriving businesses in a billion-dollar industry. Too bad you can't invest in them.  To top of page

Company Price Change % Change
Bank of America Corp... 16.15 0.00 0.00%
Facebook Inc 58.94 0.00 0.00%
General Electric Co 26.56 0.00 0.00%
Cisco Systems Inc 23.19 -0.02 -0.09%
Micron Technology In... 23.91 0.00 0.00%
Data as of Apr 17
Index Last Change % Change
Dow 16,408.54 -16.31 -0.10%
Nasdaq 4,095.52 9.29 0.23%
S&P 500 1,864.85 2.54 0.14%
Treasuries 2.72 0.08 3.19%
Data as of 12:35pm ET
More Galleries
50 years of the Ford Mustang Take a drive down memory lane with our favorite photos of the car through the years. More
Cool cars from the New York Auto Show These are some of the most interesting new models and concept vehicles from the Big Apple's car show. More
8 CEOs who took a pay cut in 2013 Median CEO pay inched up 9% in 2013 to $13.9 million. But not everyone got a bump last year. Here are eight CEOs who missed out. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.