Free SAT Test Prep Could Spell Doom for Kaplan, Princeton Review

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Along with everything else that has been said about the changes to the SAT college admissions test, now the College Board, which owns the test, has said that it will provide a free test preparation program for the new test when it debuts in 2016. Test preparations companies like Kaplan and Princeton Review, to name two of the largest, could really feel the pinch.

The College Board will partner with the Khan Academy, a well-respected online educational platform that already makes much of its content available free. When the announcement of changes to the SAT was made, David Coleman, president of the College Board, said, “This will be the best thing out there that happens to be free.”

The SAT has battled the perception for years that economic status is the best predictor of a high score on the test. Kaplan and the other for-profit test prep firms claim to have figured out a handful of tricks that help test-takers improve their scores. For example, vocabulary plays a big role in the SAT. Building a vocabulary is one of the primary focuses of the test prep companies.

Kaplan booked more than $2 billion in revenues in 2013, down slightly from 2012. Kaplan is owned by Graham Holdings Co. (NYSE: GHC), which was spun out of the Washington Post Co. when Jeff Bezos, CEO of Inc. (NASDAQ: AMZN) bought the newspaper last year

The College Board’s Coleman also seems to recognize that the charges of inequality need to be answered:

It is time for the College Board to say in a clear voice that the culture and practice of test-prep that now surrounds admissions exams drives the perception of inequality and injustice in our country.

For its part, a Kaplan executive said, “Competition has always been good for test prep because it establishes that test-prep is the norm, like anything else.” That could just be wishful thinking — or worse, whistling past the graveyard.