The truth about the College Board

By
Cougar Staff
 – January 25, 2007Posted in: A1A, Cover Stories

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.