Smartest in the Room: College Board CEO David Coleman revamped and revived the SAT, but offering free test prep from Khan Academy has done little to boost Black and brown student scores.
Chaos. That’s the effect Covid-19 has had on America’s system of higher education, which was already struggling before the pandemic. One need look no further than the current state of affairs at the College Board, long regarded as an impenetrable fortress among the ivory towers. Its core product, the SAT, has set the standard for college admissions for more than five decades. Few realise it, but the New York City-based organisation that offers the SAT and Advanced Placement tests is a non-profit that operates as a near-monopoly. Its tests, which have a stranglehold on their student-customers, fuel more than $1 billion in annual revenue and $100 million in untaxed surplus. It has $400 million invested with hedge funds and private equity, and its chief executive, McKinsey-trained David Coleman, 50, pulls down compensation of almost $2 million a year.
But fortress College Board is under attack.
“Shame on them,” says Anne, a mother of two teenage girls in Raleigh, North Carolina. “If the College Board cared about the well-being of students, they would shut down the test.” Her 17-year-old has been trying to take the SAT since the spring, but all three of her test dates were canceled. More than 1 million students are in the same boat.
“Such incompetence and recklessness!” posted Stacey Falk Feinsilber on the College Board’s Facebook page. Her daughter Hannah got three contradictory emails over the two days before her August 29 exam at a Tumwater, Washington, high school. The final note canceled the exam less than 12 hours before it was set to begin. “Any lawyers out there interested in pursuing a class-action suit against the College Board?”
Frustrated students and apoplectic helicopter parents aren’t the College Board’s only problems. The non-profit and its SAT have long been criticised as perpetuating a lopsi-ed system that favours the affluent. The College Board proclaims that its mission is “to connect students to college success and opportunity.” Yet its own data show that Black and brown students score lower on both the SAT and AP exams than do whites.
But it’s the Board’s inability to safely adapt its operations to the pandemic that has prompted customers to opt out in droves. Since March, more than 500 colleges, including every school in the Ivy League, have joined the growing “test optional” movement. All told, more than 1,600 four-year schools will not require scores for admission in 2021, and a growing number are becoming “test blind”, meaning they won’t consider scores at all.
For many students and colleges, the testing exodus will make 2021 one of the most bewildering admissions cycles ever. The disruption may not be temporary. Prior to the pandemic, the Board of Regents of the prestigious University of California system, in the state with the largest share of the nation’s SAT takers, had considered whether to get rid of the test. The Regents were moved by the data on disadvantaged students. “I believe this test is a racist test,” said Regent Jonathan Sures during a UC conference call. “There’s no two ways about it.” In late May, the university system announced its admissions officers would stop considering test scores entirely starting in 2023, and a judge recently ruled that policy must be implemented immediately.
If the College Board has a recovery plan, it isn’t articulating it. Instead, it’s hunkering down, refusing repeated requests from Forbes to speak to senior management and answering questions solely by email. “Local schools and test centres make individual decisions about whether to administer the SAT,” writes a spokesperson. To critics who say the College Board isn’t fulfilling its mission: “Each year, we help clear a path for more than 7 million students to own their own future.”
What has emerged from interviews with more than 75 sources, including 13 former highly placed College Board executives, all of whom asked not to be identified because they still work in education or related businesses in which the College Board wields considerable influence, is a picture of an organisation under serious strain, run by an elitist, tone-deaf chief executive. After becoming CEO in 2012, Coleman turned the organisation into a seemingly invincible cash machine. But 2020 has been its undoing. Some are now questioning the SAT’s long-term survival. Forbes estimates that thwarted spring and fall test dates have kept more than 1.5 million students from taking the SAT, resulting in as much as $200 million in lost revenue for the College Board.
The growing criticism of admissions tests is part of a larger debate about access to higher education in America. “College has become the capstone in an inequality machine that raises and perpetuates class and race hierarchies and sinks the lower classes,” writes Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce in his 2020 book, The Merit Myth, which lays out the ways that America’s most selective colleges foster and perpetuate wealth disparity. Carnevale, an economist who served on commissions for Presidents George W Bush and Bill Clinton, says the College Board deserves some of the blame.
“It’s the evil empire,” he says. “The SAT is basically a dodge... It provides a shiny scientific cover for a system of inequality that guarantees that rich kids go to the most selective colleges. It makes all that sound like science when it’s not.”
The College Board’s role in admissions started more than a century ago. The organisation was founded in 1900 by a group of 15 elite colleges and prep schools, including Columbia and Princeton, that wanted to increase enrollment of highly intelligent students from beyond the East Coast upper class. The first Scholastic Aptitude Test, given in 1926, was designed by Princeton psychologist Carl Brigham, an avid supporter of the eugenics movement, which advocated selective breeding to eliminate traits like low intelligence. He believed Black people to be intellectually inferior. The exam, which was adapted from an intelligence test given to soldiers in World War I, purported to measure smarts as opposed to knowledge.
The College Board’s sole competitor, an Iowa City, Iowa–based organisation called American College Testing, launched a different kind of entrance exam in 1959. Meant to gauge what students had learned in high school, it was marketed to large public universities. The ACT gained ground in the middle of the country, while the SAT was the choice on the coasts.
Despite the College Board’s initial claim that it wasn’t possible to study for the SAT, in 1938 a Brooklyn plumber’s son named Stanley Kaplan started offering SAT-prep classes in his parents’ basement. Kaplan and the multibillion-dollar global test-prep industry he spawned would not only boost the SAT’s popularity but help its brand expand worldwide.
Since the 1960s, critics have charged that the SAT confers an unfair advantage on wealthy families who can pay for prep, which runs as high as $1,000 an hour. Another target: The Educational Testing Service, a Princeton, New Jersey, non-profit founded in 1947 by the College Board and two other entities. It develops SAT questions and administers and scores the exams. For those services, the College Board paid ETS $350 million in 2018.
No one has shaken up the College Board more than Coleman, its current chief executive. Raised in Manhattan by a psychiatrist father and a mother who was a college dean at the progressive New School for Social Research and later the president of Bennington College, Coleman attended prestigious Stuyvesant High School, then majored in philosophy at Yale, where he started Branch, a tutoring programme for disadvantaged New Haven high schoolers. After graduating in 1991, he won a Rhodes scholarship and earned degrees at Oxford and Cambridge. In 1994, he joined consulting firm McKinsey but left after five years to found The Grow Network, a startup that helped schools analyse standardised-test results. He had come to embrace the controversial Common Core movement, backed by the Bill & Melinda Gates Foundation, which sought to introduce a standard curriculum to public schools nationwide. Shortly after selling his startup, he launched Student Achievement Partners, a non-profit consulting outfit that promoted the Common Core. The curriculum emphasises the reading and analysis of primary texts like the Declaration of Independence.
In a 2011 speech to a group of New York education officials, later blasted by teachers who viewed Coleman as arrogant and out of touch, he dismissed the idea of personal writing, a longtime staple of most public-school curricula. “As you grow up in this world, you realise people really don’t give a shit about what you feel or what you think,” he said. The following year, the College Board tapped him to be its president and CEO. Coleman’s no-nonsense approach was a departure from that of his predecessor, Gaston Caperton, a folksy former governor of West Virginia. “[Coleman] thought he was the smartest person in the room,” says one Board executive who left a year into Coleman’s tenure. “He just tolerated people.”
At College Board, Coleman initiated an assault on chief competitor ACT, which had overtaken College Board’s market share in part by striking deals with 14 states to give the test to all their public high school students. ACT had marketed its test as a twofer, a college entrance exam and an assessment that satisfied a federal testing requirement in reading and math for high school students.
If he wanted to compete for state business, Coleman would need to make drastic changes. His plan was to remake the SAT to be curriculum-focussed like the ACT (no more questions requiring students to memorise obscure SAT vocabulary words like impecunious and noisome). In 2013 he hired Cyndie Schmeiser, who had left ACT after running its education division for nearly 38 years. Coleman opened an office for her in an Iowa City suburb and started poaching ACT employees. College Board’s Iowa staff grew to more than 20 people.
Coleman then deployed strategies that seemed to come straight from a guerrilla-marketing handbook. To quiet critics of the test’s purported affluent-student bias, the College Board formed a partnership with popular Silicon Valley online education non-profit Khan Academy to develop free online SAT-prep courses. “We at the College Board think that assessment without opportunity is dead,” Coleman told the Texas Tribune in March 2016.
The new SAT also reverted to the 1600-point scale from the 2400 scale it had maintained from 2005 to 2016. College Board inflated its new scores to take aim at the fact that ACT had benefited from a wave of dual test takers—SAT top scorers who discovered that the curriculum-based test was now welcome at eastern colleges. Call it smart packaging: A 1300 score on the new SAT was estimated to be the equivalent of a 1230 on the math and critical-reading sections of the previous version. After all, what 17-year-old wouldn’t want a 70-point improvement on her official score report, even if it was meaningless from an aptitude standpoint?
Coleman’s final blows to ACT came in the form of deep discounts on statewide contracts. His staff began lowballing bids to ACT’s customers. In 2015, for example, College Board won a three-year contract with the state of Michigan at a price that was $15.4 million less than ACT’s bid. By 2018 College Board’s new SAT had won 10 state contracts, including three formerly held by ACT. Thanks to Coleman and his new SAT, College Board was once again the market leader.
While the SAT looms large among the brands College Board markets to high schoolers and their parents, it is only marginally profitable. Each test costs nearly $2 million to construct, according to former staffers, and to prevent cheating, a completely new test must be created for each of 12 annual sittings in the US and overseas. Composing the 154 questions that make up each exam involves an elaborate two-year process. A staff of assessment designers and developers write questions which are then reviewed by an external committee. Many tests include a 20-minute section with sample questions that don’t count toward a student’s score but are used to evaluate items for future tests.
Former employees contend that College Board does no better than break even on each SAT it gives (the charge is either $52 or $68 for a test with a writing portion; it offers fee waivers to low-income students).
But the SAT is a critical part of College Board’s marketing funnel, which begins earlier with the PSAT.
Since 1959 College Board has offered the PSAT, a $17 two-hour-45-minute mini-SAT taken by 10th and 11th graders. The test qualifies top scorers for the $2,500 National Merit Scholarship, given to 8,000 students each year.
The PSAT is free to most high school families because the College Board has a large network of contracts with states, districts and individual schools, many of which absorb the costs. Only a quarter of the 3.9 million PSATs taken last year were paid for by students’ families, say former College Board insiders. The PSAT is great practice for the real SAT and, more importantly, it deposits students into College Board’s large database of prospects. Under Coleman, College Board introduced a new $13 PSAT 8/9, a test taken as early as eighth grade. Score reports from these tests often suggest AP classes the students should take, introducing them to another College Board product.
College Board’s student database, housed within its College and Career Opportunities & Enrollment division, is a profit gusher. In 2018 it produced more than $100 million in revenue with gross margins of 41 percent.
When nervous young test takers sit down for their exams, proctors are instructed to read from a script that informs them that if they provide personal details, they’ll receive valuable information about scholarships and colleges. Most sign up, and for 47 cents per test taker, College Board “leases” student data, including ethnicity, religion, gender and their parents’ educational backgrounds, to colleges and other third parties. The practice initiates an onslaught of promotional mailings and brochures that students’ families must endure in the years leading up to admission. (Late last year, a class-action suit was filed in federal court in Illinois, claiming the College Board is violating the state’s child privacy laws and using deceptive practices to enrich itself. College Board points out that a similar suit was dismissed several years ago.)
The PSAT and SAT exams are loss leaders, in a sense, steering students to other opportunities on which College Board can cash in.
“Think about it like Spirit Airlines,” says one executive who worked at the College Board for more than a decade. “The ticket price is low, and the add-ons are where they get you.” College Board offers to send a student’s scores to four schools for free within 10 days of their having taken the test, but then charges $12 a pop to send results to additional schools. There’s an additional $31 fee per order if a student wants them rushed. Thanks to electronic platforms like the Common Application, many students will send scores to 10 colleges or more. If test takers want to see which questions they answered incorrectly, they must pay $18. Changing their test date, which busy high schoolers often do, costs another $30. These fees account for a substantial portion of the $406 million in 2018 revenue collected by the College Board’s Assessments division, which includes the SAT and PSAT programmes.
The biggest moneymaker for the non-profit is its Advanced Placement programme, housed inside a division that accounted for $483 million in revenue in 2018. The College Board benefits from economies of scale in the most popular subjects, including AP US History and AP English Language and Composition. Gross margins for the AP division overall are 29 percent, but some tests have margins well over 50 percent, say former employees.
The AP programme has grown exponentially since 1955, when the College Board took it over. It has almost no competitors and few critics. Its expansion is a lesson in masterful product marketing. Originally backed by the Ford Foundation, the idea was to give challenging work to a small group of high-achieving students. “It was a very elitist programme at its inception,” says Kristin Klopfenstein, an economist who spent 12 years studying the programme.
In 1988, the feel-good movie Stand and Deliver, based on the true story of devoted East Los Angeles AP Calculus teacher Jaime Escalante, whose low-income Latino students all passed their exams, gave a huge boost to the programme in the public imagination. The College Board ran with it, pushing AP courses for all without considering the resources underfunded school districts would need to help students succeed. “They were trying to make the AP into something it wasn’t designed to be,” Klopfenstein says.
For years there were only 11 AP courses offered in core subjects like chemistry, physics and history. The curriculum was college-level, and high scorers could sometimes receive college credit or placement. How do you expand the market when a product is in high demand? Give customers variety. Just as General Motors offers 20 different models of SUV, today there are nearly 40 AP exams in topics ranging from art history and human geography to psychology and drawing. Demand for AP Computer Science, for example, was so brisk that in 2017 College Board ginned up an easier variation called Computer Science Principles, which is one of its fastest-growing products. Last year 96,000 Principles AP exams were given, compared to 70,000 Java coding–heavy Computer Science A exams. According to College Board’s data, from 2005 to 2008, 496,000 students took three or more AP exams. A decade later that number had more than doubled, to 1.1 million.
Like the SAT, the AP programme is a fee bonanza. AP exams cost $95 each. There’s a $40 late fee for missing the November registration deadline, and those who register, pay and then cancel get only $45 back. To send scores to more than one school or to submit scores late, College Board charges $15 per score report.
Similar to their performance on the SAT, Black and brown students don’t do as well on AP tests as white students. According to the College Board’s own figures, in 2019, 68 percent of Black and 56 percent of Latino students who took an AP test did not earn a passing score of 3 or higher on the exam’s five-point scale. The failure rate for all students was 41 percent.
Despite the disappointing stats, the College Board has lobbied states to support its highly profitable AP programme, promoting it as a way to elevate American high school curricula and carry out the College Board’s mission of connecting students with college success. A high school’s AP programme is an important measure of its perceived quality. And the number of AP courses on a student’s high school transcript is one of the most heavily weighted measures college admissions officers use to evaluate applicants. Many states now subsidise the exams and require that AP participation or scores be used to measure school and district performance. Last year more than 5 million AP exams were given in nearly 23,000 high schools. What’s most baffling about the College Board’s current woes is that its management has yet to come up with an adequate plan to administer its tests safely and efficiently during the pandemic. It managed to offer virtual AP exams in the spring. But widely reported technical problems prompted a $500 million federal class-action suit alleging that its website failed to accept the answers filed by thousands of students. (The College Board calls the suit a “PR stunt” and says it is “wrong factually and baseless legally.”)
The non-profit has the financial resources to address its problems. Its most recent publicly available balance sheet shows that it operates with more than $300 million in cash and savings and nearly $850 million in investments. Brainpower isn’t an issue either. Its executive suite is deep, well-credentialed and lavishly paid. Only one of its 18 listed officers made less than $300,000 in 2018. Eleven, including the chief of “membership, governance and global higher ed”, earned more than $500,000.
College Board’s inept management of the SAT during the pandemic could have long-term consequences. Former College Board executives and close outside observers point to the demise of the SAT Subject Tests as an object lesson. These single-subject exams in disciplines like chemistry and math doubled down on AP’s success formula but were mortally wounded in 2012 when the University of California system stopped requiring them. Hundreds of other colleges followed UC’s lead. Data from the College Board show that the number of Subject Tests taken in 2017 had fallen by nearly 300,000 since 2011.
Many think California’s recent actions mark the beginning of the end of the iconic SAT. “UC’s decision was huge,” says Angel B Pérez, new head of the National Association for College Admission Counseling, an organisation with 14,000 members. “It’s only a matter of time before other public systems follow suit.” Pérez’s previous job was head of enrollment at Trinity College, a private liberal arts school in Hartford, Connecticut, that stopped requiring tests in 2015. His prediction about schools that have switched to test-optional policies during the pandemic: “They’re going to learn how to do admissions without the tests.”
Even for several members of the Ivy League, the SAT has become an unintended liability. The recent anti–affirmative action lawsuit alleging that Harvard discriminated against Asian-Americans used the paper trail left by the test to bolster its claims, and Yale is facing racial discrimination claims raised by the Justice Department. “Schools want as little evidence on the table as possible,” says Georgetown’s Anthony Carnevale.
But those concerned with racial justice contend that the evidence proving that the SAT disadvantages people of colour is overwhelming. College Board’s own data from 2019 show its free Khan Academy prep classes have had little if any effect. Black students had a mean SAT score of 933, compared to 1114 for white students.
Ironically, if the SAT survives the pandemic, it will likely be thanks in part to the inelastic demand it has cultivated from the very parties who now feel most aggrieved by its inability to get its house in order. Says one frustrated northern New Jersey parent eager for her son to be admitted to an Ivy who recently spent an hour and a half on hold with College Board customer service: “I am someone who feels standardised tests have value, [but] I think College Board is poorly managed.”
There are also many resource-thin public colleges, from the University of Kansas to Florida International University, that can ill afford to adopt “holistic” application processes and have relied on standardised-test scores to help screen tens of thousands of applicants. Thousands more schools have used the SAT to help them calculate the tuition discounts they offer, better known as “merit aid”.
The open secret that David Coleman knows well is that despite its many flaws, the SAT is a critical tool for the affluent, because it is a gatekeeper to many colleges and, ultimately, success.
Beyond college admissions and rankings, the SAT continues to be tapped in ways never intended. Consulting firms like McKinsey ask job applicants to submit SAT scores. Neighborhood schools’ SAT scores affect home pri¬ces. Standard & Poor’s takes SAT levels into account when it issues bond ratings to colleges and universities.
At a time when the pandemic is threatening America’s colleges with financial Armageddon, it’s tough to imagine that schools will abandon a screening mechanism that protects the admissions prospects of students from wealthy families. While the College Board has struggled to manage the pandemic testing chaos, its 1,800-person staff has remained fully employed.
Its testing competitor, ACT, has by contrast announced job cuts, furloughs and the abrupt departure of its CEO. But the College Board may need a new kind of leader to find its way through the next phase. For one thing, former staffers mention that from a technology standpoint, the organisation is woefully behind.
In May of last year, David Coleman authoured an article in the Atlantic headlined “There’s More to College Than Just Getting Into College”. The story’s subtitle could have been written by one of the College Board’s critics: “Applying to schools has become an endless chore—one that teaches students nothing about what really matters in higher education.”
It was like an arsonist complaining about an out-of-control fire. Wrote Coleman, “Low scores should never be a veto on a student’s life.”
(This story appears in the 12 February, 2021 issue of Forbes India. To visit our Archives, click here.)