Making the grade and making money; As new SAT nears, business picks up for study classes, aids

By Joshua Benton
Staff Writer

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Like accountants after a change in the tax code, test-prep companies thrive on anxiety.

And the new SAT is creating enough anxiety to drive business through the roof.

“This is the biggest growth year we’ve had in decades,” said Jon Zeitlin, general manager of SAT and ACT preparation at Kaplan, one of the two biggest test-prep companies. “Clearly students are anxious about the test change.”

In Kaplan’s Dallas office, the number of rising high school juniors signing up for SAT prep classes is up 254 percent from last year. Kaplan’s major rival, The Princeton Review, is also reporting big gains locally and nationwide. Some parents are willing to pay more than $3,000 to have their children guided through the testing wilderness.

“If the test weren’t changing, I think my parents would be fine with me just reading a book to get ready,” said Jonathan Cheung, an Episcopal School of Dallas junior. Instead, he’s taking a $1,000 class with Princeton Review.

The College Board, which administers the SAT, changes the test about once a decade, and the last revisions were in 1994. The new test is in part a response to the University of California system, which announced in 2001 it was considering dropping the SAT as an admissions requirement.

UC leaders said the test was not a strong enough predictor of student success in college. In response, the College Board announced a series of changes aimed at testing higher academic skills.

In came tougher math, including some concepts from Algebra II.

Out went analogies – viewed by some as the test’s most culturally biased section – and quantitative comparisons, a gimmicky portion of the math exam.

Most notably, in came a 25-minute essay – the first time a writing sample has been included on the SAT. College admissions officers will be able to read the essays.

“That’s what I’m worried about,” said Jordan Tunnell, a junior at Bishop Lynch High School. “You don’t get a lot of time, so you might not get to finish writing.”

The new test debuts in March, which means it’ll be a college admissions factor for the Class of 2006. This year’s seniors have already taken the old test or will take it this fall.

There are various ways to gauge the increased business. Kaplan said the number of students signing up for its free SAT practice tests is up 78 percent over last year. Amanda Farrell, director of outreach at The Princeton Review’s Dallas office, said their practice-test numbers have doubled.

Unsurprisingly, increases in business are driving up revenues. In its Aug. 9 quarterly statement, Princeton Review officials told shareholders that its tutoring business was growing rapidly, citing “anxiety about the new SAT test … we expect these market factors to continue to drive growth in the near term.”

“Whenever there’s a change in the test, it raises the anxiety level,” said Jerry Herman, an analyst at Legg Mason who tracks Princeton Review’s stock. “And potentially there could be a favorable impact on businesses that provide that preparation.”

Mr. Herman said Kaplan and Princeton Review are the clear industry leaders, with each taking about 25 percent of the national test-prep market. Kaplan has an edge with older students, such as those applying to graduate and professional schools. Princeton Review, which projects a youthful, cynical air in many of its books and products, has the edge in the $501 million K-12 market, he said.

Test-prep companies typically charge $800 to $1,000 for a class. In exchange, they’ve historically said students should expect a score gain of 100 to 200 points. Both Kaplan and Princeton Review provide some sort of guarantee if scores don’t increase. Princeton Review guarantees a gain of at least 100 points on the current SAT.

But with the new test, which has a maximum score of 2,400 instead of 1,600, the company is increasing the promised gain to 200 points. “We’re that confident that the writing test is very coachable,” Ms. Farrell said.

The new SAT is a big hit on the bookshelf, too. At the Barnes & Noble on Northwest Highway in Dallas, no fewer than 14 titles promising new SAT secrets are on sale. Nearly as many – originally written for the old test – are using the exam’s updates as a marketing opportunity. “Last Chance!” screams the spine of one title. “Take the SAT without an essay!”

The Princeton Review’s new book – 11 Practice Tests for the New SAT and PSAT – is one of the 50 best-sellers at Barnes & Noble stores nationwide and at the bookseller’s Web site. Andy Lutz, the vice president of research and development for The Princeton Review, said he expects it will shortly become the best-selling book in the company’s 23-year history. “And it’s not even peak season yet,” he said.

In June, the publishing company Sourcebooks debuted its first test-prep book, Fiske’s New SAT Insider’s Guide. “We thought it was a good time to get into testing because of the changes to the SAT,” publicist Heather Otley said. “Sales have been very good.”

The book, perhaps self-servingly, makes the argument that students gain little from test-prep classes that they couldn’t get from reading a book such as Fiske’s New SAT Insider Guide.

But for many parents, paying for a test-prep course seems like a small investment in their child’s future.

Colleen Deeb wants to make sure that her son, David Meyer, gets into Texas A&M University. But David lives in Frisco, where competition for top grades can be tough.

State law guarantees spots at A&M only to those who finish in the top 10 percent of their graduating classes. David currently in the top 20 percent, meaning he’ll likely have to impress the admissions office with another credential.

The plan: Boost his SAT score from a good 1,200 to a great 1,400. (That’s on the old SAT scale. David, who wants to be a doctor, plans to take both the old test this fall and the new one in the spring.)

“If he’s borderline getting into a state school, maybe it’s the one thing that can push him in to an admission,” Ms. Deeb said.

To reach that goal, his family is paying $3,199 for private SAT tutoring at Kaplan.

“I absolutely love it,” David said. “I wanted a customized, tailored program that had demonstrated, statistically significant success.”

Ms. Deeb said that she probably still would have paid for the tutoring even if the SAT weren’t changing. “But it definitely was a part of the decision,” she said.