How Much Does The College Board Make Off The SAT?
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How Much Does The College Board Make Off The SAT?


Standardized tests are a part of life for
every American, and indeed for almost everyone in the developed world. But especially for America, there is one company
that stands above all others both due to its success and shady practices. That’s why today we’ll be looking at the
world’s largest standardized test provider, College Board. This video is brought to you by Skillshare. The first 500 people to sign up with the link
below will get a 2 month free trial. Now, standardized testing has been around
in the US since roughly the 19th century, but back then it wasn’t on a national scale. Universities were limited to choosing test
from local institutions, which rarely spanned more than a single state. At the turn of the 20th century there were
roughly 1300 academic tests on the market, so you most likely had to take a different
one depending on which university you wanted to go to. Obviously this system was rather wasteful,
so in 1899 Columbia University partnered with 11 other universities to adopt a more universal
standard for testing. What they created was the College Entrance
Examination Board, better known today simply as College Board. As you may have noticed, four of its founding
members would eventually be part of the Ivy League, so College Board was considered a
very high-level institution right off the bat. Originally it provided tests for 9 different
subjects, which allowed participating universities to streamline their curriculum. The advent of World War 1, however, would
be a game changer for standardized testing. The US military developed the Army Alpha,
a general test that could evaluate the intelligence and skills of new recruits. In an unprecedented effort, more than 2 million
tests were administered during the war. Afterwards, College Board hired one of the
leading figures in the Army Alpha program, who began working to adapt the test for academia. Thus, in 1926 College Board began administering
the Scholastic Aptitude Test or SAT. At first, universities like Harvard used the
SAT to determine who would receive scholarships, but pretty soon the test became adopted as
a standard for admission. Technological advances were a big reason why
the SAT became popular. IBM, for example, developed a machine that
could grade tests 10 times faster than even the best teachers. Over the next decade College Board’s membership
would swell to 52 institutions. When America joined the Allies in World War
2, College Board was directly assigned to administer tests for the military. But despite being the largest testing organization
in the US, in 1945 College Board found itself in a rather difficult position. Only 15% of universities were using the SAT
and there was still huge variance in tests across the country. But now that peace had been secured, American
universities were faced with unprecedented demand for higher education. The man responsible for that was FDR, who
in 1944 signed the G.I. Bill, which paid for the tuition of every
American soldier that had served in the war. College Board realized that it wasn’t in
a position to capture all of this new demand, so instead of trying to compete, it secured
an alliance with two other big testing institutions. The first one was the American Council on
Education, which was created towards the end of the First World War to help the military
in parallel with the Army Alpha. The second one was the Carnegie Foundation
for the Advancement of Teaching, which was founded by Andrew Carnegie, the titan of the
American steel industry. Together with College Board, the three organizations
created the Educational Testing Service in 1947, delegating to it the job of developing
and administering most of their tests. Now that the industry was much more consolidated,
the SAT’s adopting rate grew exponentially, reaching 25% less than ten years later. In 1955 College Board felt confident enough
to expand its individual subject tests into the Advanced Placement program. Unlike the subject tests, the AP program gave
students the opportunity to essentially earn credits instead of having to take classes. During the 60s and 70s College Board and the
ETS grew to dominate the testing industry in America, administering one and a half million
SATs per year. Collectively, the two organizations were bringing
in over $200 million of revenue, which they used to spread their influence across the
world, first in Europe and then in Asia. But this aggressive expansion, coupled with
their near-monopolistic power in the US, has attracted a fair bit of criticism. The most obvious one is the cost of their
services, which can be very expensive for low-income families that don’t qualify for
the waivers, which by the way don’t apply to international student. But the real problem with College Board is
its complacency, which is a trap that’s very easy to fall into if you’re a big successful
player in a mature market. Despite the immense revenues and resources
this non-profit organization has, it is full of cases of downright incompetence. In late 2005 for example, College Board found
out it had given wrong reports to several thousand students, artificially lowering the
grade of 4,000 them. That might seem like an honest mistake, until
you realize that College Board found out about the mistake in December, and didn’t issue
corrections until March 2006, long after the admission period. Even the grading procedures themselves are
notoriously suspicious. A study done by MIT showed that there was
a significant correlation between the length of an essay and its score. In fact, just assigning grades based on length
would match the score given by College Board 90% of the time. Ongoing leaks of test questions have become
commonplace in South Korea and China, where there were major scandals over cheating two
years in a row. Then you also have the questionable practice
of selling student information for under 50 cents per person, which got College Board
entangled in a class action lawsuit that didn’t really change anything. All of this has put College Board and ETS
in the weird position where people are challenging their status as non-profits. Today, the two organizations collectively
bring in over $2 billion of revenue, which in and of itself is perfectly fine, until
you combine it with their monopolistic practices and excessive executive compensation. In 2013 the president of ETS earned almost
$1.5 million, while the CEO of College Board brought in just over half of that. Which again, nothing wrong with paying your
executives competitive salaries, but under these specific circumstances it does look
a bit suspicious. And while College Board and ETS have never
been more profitable, their future is far from certain. With the rate of university enrollment trending
downwards and the ever-increasing popularity of trade schools and online courses, the long
reign of College Board may eventually come to an end. Speaking of online courses, if you’ve thought
about learning a new skill recently I can highly recommend Skillshare. They offer thousands of easily-understandable
courses for as little as $10 a month. With Skillshare you really can learn anything,
from graphics design and animation to marketing and web development. Their professional classes are easy to follow
even if you’re a complete beginner, so if you feel like picking up a new skill, Skillshare
is the best platform to do that. In fact, the first 500 of you to use the link
below will get a two-month free trial, courtesy of Business Casual. By the way, the YouTube channel PolyMatter
did a great video on the SAT and the current state of College Board’s monopoly. The channel makes very thought-provoking animated
videos, which you’re gonna love if you’re a fan of Business Casual. So go over there, watch the video and consider
subscribing if you like what you see. Lastly, I’d like to say thank you to my
patrons for supporting me and to you for watching. Don’t forget to follow me on Facebook, Twitter
and Reddit, and as always: stay smart.

About James Carlton

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90 thoughts on “How Much Does The College Board Make Off The SAT?

  1. The FitnessGram Pacer Test is a multistage aerobic capacity test that progressively gets more difficult as it continues. The 20 meter pacer test will begin in 30 seconds. Line up at the start. The running speed starts slowly, but gets faster each minute after you hear this signal. [beep] A single lap should be completed each time you hear this sound. [ding] Remember to run in a straight line and run as long possible. The second time you fail to complete a lap before the sound. Your test will begin on the word start. On your mark, get ready, start

  2. Love your videos business casual but as a note. I've only ever heard Carnegie pronounced Carn-eggie rather than Car-neggie. Just something to keep in mind 🙂

  3. PLEASE REDO — Canada is just as much a victim or beneficiary of the CB testing scheme as the US is. Your into text should say "Every North American" (at least this leaves room for Mexico and its role in this too) …

  4. Couldn't have been a better day for this video to be released as I sent in my SAT Scores to my colleges today. The amount of money CB makes on AP Test and SAT is too much.

  5. if they are tax exempt because they are 'non profit' screw them ,they are a money making enterprise and should be liable for taxation

  6. Collegeboard has locked me out of my account with them, and now I can't access the official copies of my SAT scores. Good thing my university got me a special waiver because otherwise I wouldn't be able to take my classes. So I can personally confess to their lack of competence.

  7. The SAT is a fucking scam, go to community college and transfer, not only do you avoid the bullshit SAT but your first two years that employers don't give a shit about will be alot cheaper

  8. The ACTs and SATs are extremely useless in my opinion. Why? You have to take a series of courses to pursuit a certain career. Standard courses for several careers. For Dental School, Med School, to become an RN, School teacher….etc.

  9. I have a problem with your sign off. You say “stay smart” and I think it’s just too generic. It’s a huge missed opportunity. I think you should sign off with “stay casual”. It links in better with your name. 😉 I don’t know of anyone else signing off with casual, get on it!

  10. I've never understood the SAT.

    "Hey, lets make a test and give kids absolutely no resources except maybe a calculator. Because that happens all the time in real life!"

  11. does anyone else think it's weird that Harvard was the first institution to adopt the SAT, and is currently one of the most difficult to get admission to? Maybe the SAT is what Harvard considers to be a standardized test, but other institutions might have other ideas.

    Idea; every private institution generates their own test to determine their own standard to measure by.

    ..or just do away with trying to find a standard metric of comparison and realize that each individual has their own strengths by which they should be measured by on an individual basis.

  12. The SAT is a scam. Everything about it speaks for itself. Now its gutting the nation from within with no let up.

  13. Wow, that sounds terrible, even worse than standardized tests themselves. So you don't get a graduation grade from school but from a private company? That's weird and wrong. And I thought AP stood for advanced placement, you're saying it's just extreme test learning?
    The only standardized tests I took were teacher evaluations, the tests that didn't matter that much. My heart goes out to the people who have to deal with that crap.

  14. It's interesting to me that this video appears to assume the SAT is entirely dominant in the US. I mean, I know it's preferred in the south and for the Ivies, but here in Michigan, and most of the Midwest AFAIK, very few people ever take the SAT, instead taking the ACT, which is required by the vast majority of Michigan schools and one testing of which is paid for by the state. I did take both, and honestly preferred the SAT of the two, but almost no one else I knew took it, and I only took it for a scholarship that required it.

  15. The US has the standardized testing of students run by 2 private companies instead of a government institution? Why does that even surprise me… Is there anything in the US that's not handled by profit-oriented capitalists?

  16. SAT & ACT are unnecessary for going to college. I have never taken either, and I have attended college & university. Also GRE is useless too. I attended graduate school without it. Standardized tests are completely unnecessary. Why is this even a topic? We all know this.

  17. DARN IT. I JUST took a two-part ETS exam TODAY (April 5th)! The professor who administered the test saw how nervous I was (the test was based on how much I learned in my 4.5 years in college, and as an adult student my memory isn’t as great as the students half my age) and stated that the school was being graded on how effective the teaching methods were, and that the students themselves WOULD NOT SEE THE GRADES.

    Anyway I finished the second half of the exam, completed the survey that came after it, and guess what popped on the final screen: (insert name): ranking, percentile, lowest score, highest score, mean of scores.

    I almost got sick in the exam room. Five weeks before graduation, trying to find work, about to be bankrupt, finishing final projects, tweaking the resume, chasing my younger classmates around to finish group projects, and all of a sudden, I’m being personally graded on a mandatory test that the school told me that I WOULDN’T be graded on, when I could have seriously used the time to study or be on LinkedIn.

    Wouldn’t students' major, minor and cumulative GPAs be enough for measurement? NO, because the test is required for the school to pat themselves on the back while students like me are huddled in a corner barefoot, gulping down either coffee or booze and swallowing aspirins by the bottle.

    Way to stress out soon-to-be college graduates more when they’re near enough to the limit, ETS.

    Great video BC.

  18. Wait what? In america they have tests where u have only 4 options and u have to choose between one of them? thats so easy. no wonder american education system is shit. I live in Slovenia and we are 12th in terms of education system. All of the schools (exept private schools) are free in Slovenia (yes including colleges) and in our tests you have to know the answer and write it down. You dont have 25% chance of getting the answer right. You know it or you dont. I know there are tests like that in Finland (the best education system in the world) and a few other countries. Thats why our education system is one of the best. Just change your tests America and your students will score way better.

  19. America, the land where you're free to profit off of others as long as big brother deems it legal and is also profiting off of it too.

  20. Thanks for watching! Enjoyed? Don't forget to like & share!
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