The Return Of Standardized Testing

Sangeet Chowfla, former CEO of the Graduate Management Admissions Council, reflects on the business of business education

It was early in 2020, and the Graduate Management Admission Council (GMAC), the organization that I then led was reeling from the impact of the Pandemic, when MIT became the first major university system to announce that they would suspend the requirement that prospective students submit SAT/ACT scores with their applications. The initial reasoning was test center closures and the health and safety impacts of requiring students to go and take an in-person test.

Others followed soon after. While the initial impetus for these test optional policies came from undergraduate admissions, graduate schools followed soon after. By that time, the GMAT and GRE was available online and the test center closure argument was moot, but the discussion had changed; that tests (a) were biased against underrepresented minorities and socioeconomically disadvantaged students (b) were not predictive of student success over undergraduate GPA’s and (c) were a barrier to applications at a time when many schools were already struggling with declines.

In 2022, MIT reversed its decision explaining in a post “Our research shows standardized tests help us better assess the academic preparedness of all applicants, and also help us identify socioeconomically disadvantaged students who lack access to advanced coursework or other enrichment opportunities that would otherwise demonstrate their readiness for MIT. We believe a requirement is more equitable and transparent than a test-optional policy.” Brown, Yale, Darthmouth, Georgetown, Purdue, UT-Austin followed in subsequent years. Recently Harvard and Caltech have also announced that they will require a test score. The reasons given were similar to that by MIT and quoted above.

What’s changed and what are the implications for admissions requirements for business schools?

I believe that not only must business schools follow the lead of their undergraduate programs (who after all have larger cohorts to deal with and bigger admissions research departments) but, as I previously stated in my column last May ( you can read it here), that it is more important for them to do so because of unique characteristics of graduate management education (GME). Let me explain.

STANDARDIZED TESTS ARE NOT RACIALLY BIASED

The argument that standardized tests are racially biased in their structure has no basis on any empirical research that I am aware of. Most tests of quality take care to avoid this through pre-testing and item level differential analysis. It is true that there are differences in median test scores across racial subgroups but that is the result in inequalities within our educational system. Removing standardized tests will not magically make these inequalities go away. Instead, they will mask them and make it harder to remediate.

STANDARDIZED TESTS ARE MORE PREDICTIVE OF STUDENT SUCCESS THAT UGPA’S

MIT, in reinstating test requirements stated, “our ability to accurately predict student academic success at MIT⁠ is significantly improved by considering standardized testing — especially in mathematics — alongside other factors.” They further stated that “not having SATs/ACT scores to consider tends to raise socioeconomic barriers to demonstrating readiness for our education”. A fact that they noted was corroborated by a major study conducted by the University of California’s Standardized Testing Task Force. Other validity studies have shown similar results for Graduate level programs in management.

Anecdotally, business school professors have recently told me that they have noticed a reduction in student readiness, particularly in quant, a potential correlation with test optional admissions.

TEST OPTIONAL POLICIES HAVE NOT INCREASED THE STUDENT PIPELINE

The quiet part is that business schools have been under pressure to increase application volumes. Students complain about test requirements and conventional wisdom is that removing them will reduce friction and hence increase applications. But do they really? Would a student decide for or against a graduate level business degree because of the need for 30 to 50 hours of preparation and a $300 test fee. If that is their level of commitment, do we really want them in our programs?

The data does not seem to support the pipeline argument. Total GME applications grew by 2.4% and 6.4% due to a Pandemic related bump in 2020 and 2021 but then declined by -3.4% and -4.9% in 2022 and 2023 (GMAC application trends data). MBA applications did worse at -2.0%, +3.8%, -6.5% and -4.9%. Applications for available seats declined from 6.6 in 2022 to 5.9 in 2023. Test optional policies do not seem to have helped. Conversely, you can make the case that they have actually harmed the pipeline by making business schools seem less exclusive – you can read my article in EFMD’s Global Focus on this subject here.

THE FUTURE OF STANDARDIZED TESTING

The test optional experiment has clearly not lived up to expectations. So, will test requirements return? I believe that they will, but with changes. My – admittingly murky – crystal ball seems to suggest the following.

Selective and ranked schools will increasingly require test scores, particularly for their flagship programs. This will be driven by pressure from faculty (readiness) and students (exclusivity) that is not parried by demonstrated growth in application volumes.
That said, there will be a move away from a focus on a single number. An individuals score or a school’s GMAT/GRE average. The arms race may be over (and that is a good thing). Tests will go back to their original intent, a way to supplement an application with objective data rather than an individuals or schools bragging right.
GMAT’s dominance or the GMAT/GRE duopoly (depending upon your viewpoint) will continue to erode. Once the single number becomes less important and a school’s averages are no longer a benchmark, other ways to supplement the application may also become acceptable. A pre-experience MiM program may be willing to accept a SAT/ACT score for example. A CAT score from an Indian student or a Liangkao from a Chinese one may do just as well. This diversity of inputs will again make a simple GMAT average meaningless.

Test optional policies were a worthwhile experiment at the time, given the Pandemic related uncertainties and concerns about declining application volumes. But an experiment is not dogma. The data seems to suggest that they do not deliver the promised benefits and the prudent thing for business school administrators is to consider rolling them back – with appropriate modifications – as their undergraduate brethren are doing.

Author and former GMAC CEO Sangeet Chowfla

Sangeet Chowfla led the Graduate Management Admissions Council as president and CEO for nearly ten years from 2014 to 2022. A globally recognized and respected executive with deep experience in the technology, telecommunications, and venture capital sectors, he began his career in New Delhi with IBM/IDM. Chowfla went on to spend 18 years with Hewlett-Packard Co. in Europe, the Middle East, Asia Pacific, and the United States. He culminated his tenure with the company as vice president and general manager of the Inkjet Media Division from 1995-2001. He then moved to Timeline Ventures as a partner in the venture capital partnership. In 2007, Chowfla became the chief strategy officer and executive vice president of the Mobile Services and Global Market Units of Comviva Technologies, a leading Indian telecommunications software company. Chowfla joined GMAC during a period of disruption in the organization and industry. During the last three years of his tenure, he helped to stabilize the candidate pipeline, renewed GMAT exam growth, diversified GMAC’s footprint and ensured a strong financial foundation to enable future investment.