The truth about the College Board

The College Entrance Examination Board, also known as the College Board is a “not-for-profit membership association whose mission is to connect students to college success and opportunity,” according to collegeboard.com. But most students at Albany High School know it as the people who put them through sometimes unbearable stress by producing the SAT reasoning test, SAT subject tests, and AP tests.

When taking these tests, one can’t help but notice how much they cost. To apply to most colleges, a student will need at least some subject tests ($18.00 plus $8.00 for each additional test taken on the same day) and the SAT reasoning test ($41.50). In addition, AP tests cost students $83.00, sending test results to schools costs $9.50 a pop, and PROFILE, a financial aid application required by most private colleges, costs $18.00 per college. It is not hard to imagine spending at least $300 for all these services, or for more compulsive college-bound students, upwards of nearly $1000. How much money do these tests bring in for the College Board?

According to their tax form 990 (available to the public due to the College Board’s tax-exempt status), last year the College Board took in a whopping $468.5 million on “program service revenue” (test/service fees), and they collected an additional $16.4 million in grants and membership dues. As far as expenditures, about $5.7 million is spent on various services (legal, accounting), and about $398.8 million is spent on actual programs and services. The remaining surplus is spent on employees ($68.8 million) and directors and executives ($6.7 million). The College Board made a net profit of $23 million over the last year, which is equal to 5% of the money spent on tests. Similar profits were made over the last few years.

Seeing as how the tests cost less to produce than we pay, why doesn’t this “not-for-profit” organization lower its prices?

Perhaps it has to do with compensation. Executives at the College Board are paid very well. The president of the College Board, Gaston Caperton, a successful businessman who became the governor of West Virginia, was paid almost $600,000 in 2005 (this does not include the $110,000 expense account) up $50,000 from the previous year, and roughly $120,000 up from two years before. While this is less than what many other CEOs make, it is still unusual for such an already rich “education crusader” (a title endowed upon him by USA Today) who runs a nonprofit organization to be “compensated” almost twice as much as the president of the United States, who has to pay for many of his own expenses. Vice presidents of the College Board made an average of around $250,000 each in 2005, and their salaries have also risen dramatically from previous years.

In addition to the far-larger-than-necessary profits and executive salaries, the College Board has had a history of suspicious holdings. They have invested in several for-profit subsidiaries, including the College Board website, www.collegeboard.com, Inc. and, through Educational Testing Services, ETS K-12 works, a company that helped design the California High School Exit Exam. The College Board today has over $250 million in cash and holdings.

“The College Board is highly skilled at working these conflicting values [helping students as well as making a nice profit] and at getting what it wants. It is important to pay attention to the machinations of the Board and to understand that it always has a complex set of motives at work,” wrote Bob Laird, former director of undergraduate admissions at UC Berkeley, in an article for National CrossTalk.

The College Board is clearly not a truly non-profit organization, even though the government classifies it as one, because it overcharges for products in a competitive market and controls a number of for-profit subsidiaries. Is this because it is trying to protect its future by collecting extra capital, or is it just a way to create some extra cash for the executives? We can only hope that its intentions are pure.

4 Responses

1. 5:42 PM on February 13th, 2007Antibush:

   Watch subject. Bush is forever saying that democracies do not invade other countries and start wars. Well, he did just that. He invaded Iraq, started a war, and killed people. What do you think? What is he doing to us, and what is he doing to the world?
   What happened to us, people? When did we become such lemmings?
   The more people that the government puts in jails, the safer we are told to think we are. The real terrorists are wherever they are, but they aren’t living in a country with bars on the windows. We are.

2. 10:48 PM on February 19th, 2007EC junior ['08!]:

   good research. I’ve been wondering about the Collegeboard’s spending practices for a while now, but thanks to AP and Honors classes I haven’t really felt motivated to do an research outside of schoolwork. Is it just me, or is this article a little opinionated for a news story? It’s well written though, and it may just be that I was drilled with being objective an possible at the EC paper.
   gj!

3. 10:48 AM on April 20th, 2007KS:

   I agree. It is good research. This article was extremely informative (I too had been wondering just HOW much the College Board was screwing students over).
   It’s disturbing just how much control the College Board has over students’ options for education after high school.
   I find it incredibly upsetting just how out of control college applications have become, largely because of the College Board and magazines like Newsweek that releases ridiculous ratings of colleges and universities every year. Having just navigated the horrors and stresses of applying to college, I know just how difficult it can be, largely due to test scores and GPAs.

4. 8:09 PM on August 27th, 2008college board sucks:

   everyone knows that collegeboard do this for money, my sat teacher went to visit collegeboard and the director guy was totally kissing her ass because she went to a university (berkeley and then harvard) and they depend on those who go to universities to make mucho dinero! why else would these tests be made by a company and not the government? anyways the only reason why they changed their format is so that the colleges would still require SATs because they were going to not use it anymore

   it does not cost 25$ or even more - i forgot! to scan a 50 question sheet and mail it to you
   and it does not cost 100$ to have some loser read your FRQs

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