The SAT's (Not-for-Profit) Revenue Machine

| Mon May 18, 2009 3:34 PM EDT

The Big Money's Chadwick Matlin has a great look in to the not-for-profit, yet very flush, world of the College Board, the group that administers the SAT. Read the entire thing if you have the time, but here's the money quote in case you don't:

To keep its nonprofit status, an organization must pass an IRS review every five years, which means it needs to execute its charitable mission appropriately. The College Board's charitable mission was summed up by its president in 2006: "to connect students to access and opportunity, to prepare more and more students to be ready to go to college and succeed." The quote's logic is circular. In order "to go to college and succeed," you have to get into college. And to do that, you have to prepare for and take the SAT. Certainly, the College Board can help you do that. But if the College Board didn't exist, there would be no need for it to happen in the first place.

Emphasis mine. I wouldn't say the College Board doesn't have an economic monopoly over the college testing business (service?), though they have something close to it considering they only have one major competitor in ACT, Inc., which administers the ACT.

What the College Board does have is something I'd call a psycho-cultural monopoly on college testing: The SAT has become synonymous with getting in to college, even though dozens, maybe hundreds, of schools, including my alma mater, don't require it for admission. But I took it anyway, along with millions of other students, probably because so many of us have come to think of it as a prerequisite for college. I actually took the SAT twice, which is very common, except that the first time I took the test I was in middle school. Our school district administered the SAT to a few dozen students in gifted programs. I still can't remember why they did it, but I remember it made me and my friends—many of whom did not take the test then—associate taking the SAT with an achievement rather than an afternoon of basic trigonometry and speed reading.

I can remember a thought similar to the one I emphasized above crossing my mind when I began applying to law schools last winter. Every ABA-approved law school requires the LSAT ($132), which is administered by the not-for-profit Law School Admissions Council. I don't think it's ridiculous for prospective law students to take an admissions test, but what I did find ridiculous were the other fees LSAC charged for their other services: $117 for the Law School Data Assembly Service (something else required by virtually every law school), which collected my transcripts, letters of recommendation, and other academic information in to a candidate report. Then, every time I applied to a law school, LSAC charged me $12 to send that report to the law school to which I applied.

I'll concede charging someone for a service like assembling an applicants' credentials is not outrageous per se; it's the amount of the fee. I doubt it even cost LSAC $2 to fax or email my report to each law school. But, thanks to the nature of a monopoly, I had no other choice but to pay the fee.