Even as its market share of the standardized test market for business schools continues to shrink, the Graduate Management Admission Council today (Sept. 17) announced a 25% price increase for the online, at-home version of the GMAT text. Beginning Sept. 23, test-takers will pay $250 to take the exam, up from $200. In addition, GMAC said it will also begin charging test takers a $25 fee to reschedule their appointment for the online test and $100 to cancel an exam.
“As GMAC aims to achieve parity between its online solutions and test center versions, and as availability of appointments across both channels begins to stabilize, the organization also announced the reinstatement of cancelation and rescheduling fees and an alignment on price for the GMAT Online exam and the in-person GMAT,” according to the company’s announcement.
The price change now makes the online GMAT $45 more than the cost of the $205 online GRE in the U.S. and Europe (the fee can vary in certain countries such as China, India and Australia). Besides the price differential, the GRE can be taken five different times in a 12-month period compared to the online GMAT which can only be taken twice. The vast majority of GMAC’s revenue and profit is derived from the GMAT exam. In 2018, the latest year for which financials are available, GMAC reported that its test operations brought in $79.9 in revenue.
PRICE HIKE COMES AMID LOST OF MARKET SHARE FOR BUSINESS SCHOOL ADMISSIONS
The increase in the GMAT’s price tag comes as GMAT continues to lose market share to the rival test by the Educational Testing Service. In releasing profiles of the just entered Class of 2022, one business school after another has reported that record numbers of their newly enrolled MBA students submitted GRE scores instead of GMATs to gain acceptance. At Yale School of Management, for example, a record 35% of this year’s entering class of 350 MBA students used the GRE, up from 24% a year ago. UC-Berkeley’s Haas School of Business reported that a record 34% of its newly enrolled class of MBA students were admitted with a GRE score. That is up from 21% last year. Four years ago, in 2016, only 7% of the incoming class had taken the GRE.
At Duke University’s Fuqua School of Business, GRE gains were even more dramatic. Some 38% of this fall’s entering class of MBAs enrolled with GRE scores, up from 23% last year and 14% two years. And at Harvard Business School, a record 22% of the enrolled class submitted a GRE score to gain entry into Harvard’s MBA program this year. That’s two percentage points higher than last year’s level, itself a record, and up from only 12% three years ago, showing increasing acceptance of the GRE as a viable alternative to the GMAT exam.
Some of those gains can be attributed to GMAC’s delay in getting an online version of its test to market when test centers closed due to the outbreak of coronavirus. The Educational Testing Service beat GMAT to market by nearly a month, allowing test takers to sit for the online GRE for the first time on March 27. No one could take the online GMAT until April 20th. And then, widespread reports of technical glitches with the online version of the GMAT led more prospective applicants to choose the GRE instead.
GMAC announced the price increase along with the previously reported change allowing prospective applicants to take the online GMAT twice instead of only once. Future GMAT Online exam attempts will now be included in the GMAT rolling 12-month and lifetime limit caps. Test takers can sit for the GMAT five times in any rolling 12-month period and no more than eight times over a lifetime. Any online exams taken prior to Sept. 23 will be excluded from the lifetime limit cap to honor GMAC’s stated policies prior to this policy update.
GRE ALSO ALLOWS TEST TAKERS TO GET HALF OFF THE TEST FOR FINANCIAL NEED REASONS
Unlike the GMAC, ETS allows students to apply for a 50% discount on their GRE exams. The fee reduction program is designed for individuals who can demonstrate financial need, for those who are unemployed and receiving unemployment compensation, and for national programs that work with underrepresented groups. GMAC only distributes up to ten fee waivers to schools and does not provide fee waivers directly to students.
As for the new additional fees being imposed by GMAC, ETS charges $50 to reschedule an appointment, twice as much as the GMAT. If you cancel a GRE test four full days before an appointment, test-takers will get a refund equivalent to half of the original test fee.
“Since our introduction of the GMAT Online exam, less than six months ago, our ongoing enhancements have helped transition the exam from meeting an immediate application cycle need to providing the flexibility and support to meet the needs of schools and candidates throughout the current cycle into 2021,“ said Vineet Chhabra, senior director of the GMAT product, in a statement. “It’s important to us that candidates feel confident to be at their best on exam day, whether in a test center or at home, and the ability for candidates to retake the online assessment is consistent with that mission. This change brings with it the opportunity for test-takers to improve their score, while also providing peace of mind and the flexibility of having an online retesting option should there be uncertainty of test center availability.”