American Morning

Educating America: The big business of the SAT

The College Board says all revenues from its products are reinvested into improved or additional services that support its mission.

By Carol Costello and Bob Ruff

During the 1950s, "What's My Line" was a popular television show featuring celebrity panelists trying to guess the occupation or identity of a real person. The panelists were given a hint and then asked the person a series of questions.

Imagine this. Had the panelists been asked to guess the name of an American organization based on the following hints, how many would have guessed correctly? And how many would have guessed that it's a nonprofit organization?

If you've followed our "American Morning" series this week you may have already guessed that we're talking about the College Board, which owns the SAT – a test required for entry into the nation's most competitive colleges. Critics say that that with its highly-paid executives and big business outlook, the College Board doesn't look or act very much like a nonprofit educational institution that earns tax benefits from the IRS.

Watch: SAT's big business

Fairtest is a consumer watchdog group that opposes most standardized tests. It has criticized the SAT as a test that isn't fair to students who can't afford college prep classes designed to "beat" the test. The group also says the College Board is placing more emphasis on making money than fulfilling its mission – to connect students "to college success and opportunity with a commitment to equity and access."

Fairtest's Robert Schaeffer: "[The College Board] is a huge business, multiple hundreds of millions of dollars a year in tests and test prep material that come out of our parents' pockets and into the pockets of test makers – money that should be spent on real education."

Not so fast, says the College Board. In a statement to CNN, it said:

"The College Board is a not-for profit membership organization governed by 30 trustees...We do not generate profits or 'make money.' All revenues from our products, services or grants are re-invested into improved or additional services that support our mission."

Some of the the organization's revenues, says Laurence Bunin, the board's senior vice president for operations, go to "free programs and services. Each year we give away 30-40-50 million dollars worth of free services to low-income students."

Who's right?

Is the College Board justified in paying big salaries to attract and retain talented people to improve the SAT? And are all the board's money-making activities a good thing if it continues to funnel free services to deprived students? Or, as Fairtest suggests, has the board lost site of its original mission by spending too much time and energy generating revenue?

There's a lot at stake. More than a million students take the SAT each year.

Originally posted September 1, 2009.