Companies & Industries

Why the Test-Prep Industry Isn't Afraid of SAT Freebies


This week the College Board announced that as part of an overhaul of the SAT college admission test—an effort aimed, in part, at leveling the playing field for rich and poor students—it will begin working with Khan Academy to provide pro bono test-prep materials and services. So what’s the response from the bountiful, for-profit industry that makes its money charging parents hefty amounts of money for similar resources? A collective shrug.

That’s because those in the business seem to believe that costly test-prep services benefit from more or less inelastic demand. A lot of parents want their kids to have a leg up, goes the reasoning, and they’re willing to pay whatever it costs for private coaching and whatever else is believed to confer a competitive advantage. A free option in the market is unlikely to diminish that demand, since the free option will be available to everyone. Parents who want an extra edge, in other words, will still have to pay for it (i.e. “Wouldn’t it be nice to have an ‘expert’ offer advice and guide you through Khan Academy’s materials?”).

Paul Kanarek, senior vice president of the Princeton Review, told the Washington Post that while the College Board’s partnership with Khan Academy might hurt anyone in the business of creating test-prep materials, it’s unlikely to damage those who sell test-prep services. “Our philosophy has never been content-oriented,” said Kanarek. “We teach people the tricks.”

Elsewhere, executives at rival test-prep outfit Kaplan sounded equally unperturbed. Seppy Basili, a vice president at Kaplan, told Politico that by playing up the free offerings, the College Board was only underscoring the value of prep work. Many parents, he argued, will still want to pay for amenities such as seasoned coaches to get their kids on the inside track. “That is exactly what people will look for from companies like Kaplan: getting an edge,” Basili said.

Test critics were also skeptical that the ostensible leveling of the test-prep playing field would result in much leveling of the test-prep industry. Bob Schaeffer of Fair Test pointed out that free SAT prep materials already exist through such programs as Number2.co—yet have done little to dampen the demand for premium assistance. “The partnership with the Khan Academy is unlikely to make a dent in the huge market for high-priced, personalized SAT workshops and tutoring that only well-to-do families can afford,” Schaeffer said in a statement posted on the organization’s website. “Like most of the other College Board initiatives announced today, this move is less significant than its promoters claim.”

Gillette_190
Gillette is a staff writer for Bloomberg Businessweek in New York.

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