Nobody in their right mind would ever tell you they enjoyed taking the SAT. At the peak of our high school years, we were forced to spend nearly four hours on a Saturday locked in a classroom for a stress-inducing test that exists for one single purpose: getting into college.
Don’t get me wrong, taking the SAT is a milestone on the road to graduating high school. However, this test, along with the ACT, has been given an oversized role in the formulation of high school curricula.
Of course, testing has always been a key part of a student’s educational experience. It is one of the only ways we can measure knowledge, so tests, by and large, dictate the course of study. Thus, the format and content of the SAT and ACT have greatly informed the way that high school curricula are currently constructed. On the surface, there is nothing technically wrong with this arrangement, but in practice, it has led to a monopoly over the college entrance exam process, as well as college prep courses in general.
Now, the SAT-ACT duopoly on testing is hardly the only example of monopolization in education. In fact, significant swaths of the industry operate in an overtly anticompetitive fashion designed to protect the supposed elite credibility of American education and, in particular, higher education. Testing is only one small part of it.
At one time, every college and university in America was required to obtain accreditation from a single regional accreditor that could single-handedly destroy an institution’s reputation. Theoretically, an accreditor could decide that a diversity, equity, and inclusion program was necessary for accreditation and could then revoke an institution’s accreditation if it did not comply. The institution would then have no recourse to seek a new accreditor. A Trump administration regulation from the Department of Education in 2020 removed the regional accreditor model, but the Biden administration telegraphed plans to revoke that regulation and restore the accreditation monopoly before Trump was reelected last year.
Other examples of anticompetitive behavior in education abound. Last year, a lawsuit was filed against 40 elite private universities for allegedly engaging in a widespread price-fixing scheme. A named defendant in the case? The College Board, a nonprofit group that administers the SAT.
Believe it or not, the lawsuit was actually the second filed in recent years alleging a massive price-fixing scheme in higher education. The lawsuit was ultimately settled with the colleges avoiding any admission or finding of wrongdoing, but it led to the dissolution of the 568 Presidents Group, a monopolistic partnership of more than a dozen elite colleges that concocted the price-fixing scheme.
So where does the SAT and its parent company, the College Board, fit into all this?
In 2024, the SAT was administered 1.97 million times, while the ACT lagged slightly behind at 1.4 million. But the number of tests is only part of the story. For the College Board, the nearly 2 million tests are a major part of a billion-dollar empire that has effectively monopolized college prep programs.
Taking an AP class in high school to earn college credit before college? It’s a pretty safe bet that the College Board administers that course. Ever taken a “CLEP” test to earn college credit without ever taking a day of class? The College Board administers those, too. And what about all the data the College Board collects about the students who use its services? Well, that is for sale, too. With every test, course, program, and ream of data sold, the organization generates more than a billion dollars in annual revenue, operating more like a Fortune 500 company than a nonprofit organization.
In 2023, according to the College Board’s own tax documents, the organization raked in more than a billion dollars in revenue. Of that massive cash haul, only $4 million came from “contributions.” Meanwhile, a whopping $955 million was raised through the organization’s programs, including fees associated with AP courses and the SAT. And since all organizations have expenses, once we subtract that, the nonprofit organization’s “net revenue” was a cool $45 million in 2023.
You might be wondering, “That’s a lot of money, but it doesn’t display any inherent monopolistic behavior.” And you would be right. Except for one thing. While generating all of this revenue, the College Board has deployed an army of lobbyists to prevent another competitor from joining the ranks of the college entrance exams.
In 2024, the upstart Classic Learning Test, which was founded as a competitor to the SAT and ACT and, for the last 10 years, has largely found an audience with religious and homeschool students, had a record-breaking year. While not nearly in the neighborhood of the 1.9 million students who took the SAT last year, the CLT was administered 180,000 times last year and generated $10 million in revenue amid exponential growth.
On its surface, the CLT is quite similar to the SAT. It has a critical reading and math section designed to measure student’s abilities in both. But what separates the test from its dominant competitors is its reliance on the foundational classic texts of Western civilization rather than the flavor of the month passage popular in the University of California, Berkeley faculty lounge.
Conservative lawmakers and governors, fed up with the higher education monopoly, have increasingly seen the CLT as a worthy inclusion to the higher education entrance exam ecosystem and have expanded state scholarship programs to include the CLT among their approved tests.
Sensing a threat to its monopoly, the College Board and its billion-dollar budget sprang into action, eager to snuff out a competitor before it could get too big. In 2023, just as the CLT was gaining momentum at the state level and caught a big break in Florida, the College Board spent $831,074 on lobbying, up from $748,554 in 2021. In the grand scheme of things, that’s not a lot of money, but it was a sign of things to come.
As state legislatures are gearing up for another session, the College Board has greatly expanded its lobbying efforts. Lawmakers sponsoring legislation to expand access to the CLT are receiving letters and visits from the College Board’s lobbyists. Last year, the organization published a one-sided takedown of the CLT that, among other things, complained that studies about the test’s ability to prepare students for college did not contain a suitable sample size on par with the 500,000 students used to measure the ACT and SAT. Of course, it is hard to have a comparable study of the CLT when the College Board is so eager to prevent any other competitor from entering the market.
Now, the College Board’s 2024 financial disclosures are not yet available, but to provide a snapshot of the organization’s gargantuan resources, one only needs to look at the massive expenditures it has made in years past. For instance, the organization spent nearly $18 million on travel in 2023. Sure, many jobs require travel, but the College Board isn’t just going to spend its millions of dollars on coach seats. By its own admission, the organization spent at least part of its travel budget on first-class seats or private charter flights. And those are not the only cushy expenses the organization billed.
It turns out that working for the College Board comes with some pretty nice perks, too. The organization’s CEO, David Coleman, received a salary of more than $2 million, while College Board President Jeremy Singer took home a healthy $1.4 million.
THE SAT MONOPOLY IS AFRAID OF COMPETITION
All this is not to say the SAT should go anywhere. Its place as a gatekeeper to college admission is assured, regardless of the CLT’s growing market share. It has the brand, reputation, and connections to prosper for a long time, even amid an impending demographic decline and a growing competitor. But even a small decline in tests could threaten the College Board’s extensive financial interests in maintaining a monopolistic grip on the college entrance exam market. After all, that’s what monopolies do: Corner the market and then crush any competitor underneath it by any means possible.
For a long time, the College Board has relied on state regulations to maintain its monopoly. The moment those regulations faced the possibility of weakening, the organization deployed an army of lobbyists to keep a competitor out of the market. And that can only mean one thing: The College Board knows the product it provides to students is hardly one that parents and families want, and it must do everything in its power to prevent the market from expanding to allow in a competitor that is.
