The Lucrative Business of SAT Test Prep Is About to Get Disrupted

The Lucrative Business of SAT Test Prep Is About to Get Disrupted

Flickr/Newton Free Library
By Beth Braverman

For years, critics of the SAT have claimed that wealthy students who can afford expensive, private test prep courses have a leg up on poorer students without access to such classes. 

That just changed. Starting yesterday, all students can access free, high-quality online test prep via a new partnership between the College Board, which administers the test, and online course powerhouse Khan Academy, a nonprofit supported by the Bill and Melinda Gates Foundation and Ann and John Doerr among others. The online program will include quizzes, video lessons and personalized lessons. 

The Official SAT Practice will focus on the recently redesigned SAT, with questions created by the tests’ authors.

Related: SAT Tests: Another Drain on the Family Budget

College test preparation is a $4.5 billion business. Private SAT tutors charge in excess of $100 per hour and classes from companies like Kaplan or Princeton Review run about $1,000. And those classes may help. Students from the wealthiest families have average test scores that are more than 300 points higher than students from the poorest families on average, according to the College Board.

In recent years, more colleges have moved away from the SAT and its competitor, the ACT, as a backlash against the tests have grown. 

More than 850 schools have made the tests optional for admission, according to advocacy group FairTest, choosing instead to focus on class grades and other factors. A study released last year of undergrads at those schools found no difference in either the GPAs or the graduation rates of students who took the SATs versus those that skipped it.

Chart of the Day: Dem Candidates Face Their Own Tax Plans

Senator Bernie Sanders, former Vice President Joe Biden and Senator Elizabeth Warren participate in the 2020 Democratic U.S. presidential debate in Houston
MIKE BLAKE/Reuters
By The Fiscal Times Staff

Democratic presidential candidates are proposing a variety of new taxes to pay for their preferred social programs. Bloomberg’s Laura Davison and Misyrlena Egkolfopoulou took a look at how the top four candidates would fare under their own tax proposals.

Quote of the Day: The Health Care Revolution That Wasn’t

Benis Arapovic/GraphicStock
By The Fiscal Times Staff

“The fact is very little medical care is shoppable. We become good shoppers when we are repeat shoppers. If you buy a new car every three years, you can become an informed shopper. There is no way to become an informed shopper for your appendix. You only get your appendix out once.”

— David Newman, former director of the Health Care Cost Institute, quoted in an article Thursday by Noam Levey of the Los Angeles Times. Levey says the “consumer revolution” in health care – in which patients shop around for the best prices, forcing doctors, hospitals and pharmaceutical firms to compete with lower prices – hasn’t materialized, but the higher deductibles that were part of the effort are very much in effect. “High-deductible health insurance was supposed to make American patients into smart shoppers,” Levey writes. “Instead, they got stuck with medical bills they can't afford.”

Congressional Report of the Day: The US Pays Nearly 4 Times More for Drugs

A pharmacist holds prescription painkiller OxyContin, 40mg pills, made by Purdue Pharma L.D.  at a local pharmacy
REUTERS/George Frey
By The Fiscal Times Staff

The House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, and the results, though predictable, aren’t pretty. Here are the key findings from the report:

  • The U.S. pays the most for drugs, though prices varied widely.
  • U.S. drug prices were nearly four times higher than average prices compared to similar countries.
  • U.S. consumers pay significantly more for drugs than other countries, even when accounting for rebates.
  • The U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices for comparator countries.

Read the full congressional report here.

Chart of the Day: How the US Ranks for Retirement

Ken Bosma / Flickr
By The Fiscal Times Staff

The U.S. ranks 18th for retiree well-being among developed nations, according to the latest Global Retirement Index from Natixis, the French corporate and investment bank. The U.S. fell two spots in the ranking this year, due in part to rising economic inequality and poor performance for life expectancy.