Thursday, March 6, 2014

Big changes for SAT; is GMAT next?

Today's big news story in higher education is the significant changes planned for the SAT.  The exam will make the essay optional, drop obscure vocabulary words, and no longer penalize for guessing the wrong answer.  Make no mistake -- none of this would be happening if the SAT had not been losing market share to the ACT.  Competition in the testing market will hopefully yield a better predictor of college performance.

But I would not be so sure.  The SAT now better measures knowledge obtained in high school.  But the main reason we have the SAT in the first place is that high school grades are a far from perfect predictor of college grades.  By testing different types of mathematical and verbal skills, it provided an independent measure of college potential, a second chance for students who had a bad year or two in high school.

The GMAT is facing a similar problem, losing market share as more schools (including NC State) accept the GRE or waive test scores for some applicants (e.g., those with masters degrees).  Poets and Quants reports that the volume of GMAT test takers dropped by 17% in 2013.

A testing operation has to add value to admissions decisions.  The GMAT works well for quant skills and deductive logic, not so well for leadership and communications.  If employers continue to take the former as a given for any MBA and place more emphasis on the latter, expect GMAT to either adapt or be replaced by other predictors.

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