So it’s official: The University of California—the country’s largest public university system, serving several hundred thousand students—has voted to phase out standardized testing.

The SAT and ACT will be optional for freshman applicants for applicants in 2021 and 2022; for 2023-4, test scores will be used only for out-of-state-students and to determine scholarship awards; and will be eliminated completely in 2025. If a new, UC-created exam is not ready by that point, then no exam will be considered.

This is obviously a major shakeup in the testing industry, although not a completely unforeseen one. Historically, there has been tension between the University of California and the College Board, with discussions of abandoning the SAT dating back to the early 1990s. More recently, there has been considerable speculation about whether the UCs would continue to require the SAT or ACT essay. Since last winter, however, additional pushback against the use of standardized testing has ramped up.

EdSource puts the current decision in further context:

In December (2019), civil rights organizations and the Compton School District filed lawsuits demanding that the UC stop requiring the SAT or ACT exams for freshman admission. The lawsuits, filed in Superior Court in Alameda County, contend that the test mandate “systematically and unlawfully denies talented and qualified students with less accumulated advantage a fair opportunity to pursue higher education at the UC.”

Mainly unspoken Thursday but clearly influencing some opinions was Proposition 209, the 1996 state initiative passed by voters that bans the use of affirmative action or racial preferences in public college admissions in California. In the years right after that vote, Latino and black enrollment at UC dropped sharply. Latino numbers have recovered, although they are still well below their share of overall high school graduates in the state. Last fall, Asians and Pacific Islanders were the largest ethnic group among UC undergraduates, at 33% followed by Latinos, 25%; whites, 21%; blacks, 4%; and international students, 13%.

In January 2019, following the Compton lawsuit, the president of the UC system, Janet Napolitano, commissioned a report on the use of standardized testing in admissions from the university’s 18-member Standardized Testing Task Force, consisting of faculty members from various UC schools.

Released on February 3rd, the 228-page report drew some surprising—and unwelcome—conclusions:

The STTF found that standardized test scores aid in predicting important aspects of student success, including undergraduate grade point average (UGPA), retention, and completion. At UC, test scores are currently better predictors of first-year GPA than high school grade point average (HSGPA), and about as good at predicting first-year retention, UGPA, and graduation. For students within any given (HSGPA) band, higher standardized test scores correlate with a higher freshman UGPA, a higher graduation UGPA, and higher likelihood of graduating within either four years (for transfers) or seven years (for freshmen). Further, the amount of variance in student outcomes explained by test scores has increased since 2007, while variance explained by high school grades has decreased, although altogether does not exceed 26%. Test scores are predictive for all demographic groups and disciplines, even after controlling for HSGPA. In fact, test scores are better predictors of success for students who are Underrepresented Minority Students (URMs), who are first-generation, or whose families are low-income: that is, test scores explain more of the variance in UGPA and completion rates for students in these groups. One consequence of dropping test scores would be increased reliance on HSGPA in admissions. The STTF found that California high schools vary greatly in grading standards, and that grade inflation is part of why the predictive power of HSGPA has decreased since the last UC study.

Note that grade inflation tends to be more common in wealthier districts than in poorer ones.

Furthermore, contrary to the Task Force’s expectations:

Applicants from less advantaged demographic groups are admitted at higher rates for any given test score as a result of comprehensive review, which is a process that evaluates applicants’ academic achievements in light of the opportunities available to them and takes into consideration the capacity each student demonstrates to contribute to the intellectual life of the campus.

Despite these findings, the Task Force’s recommendation that the test be retained proved to be politically untenable. According to the New York Times, Berkeley’s chancellor Carol Christ informed UC regents that she “viewed standardized testing as ‘a biased instrument’ that would only become more skewed in the wake of the pandemic”; the paper also cites Lt. Gov. Eleni Kounalakis as stating that “These tests are extremely flawed and very unfair,” and “Enough is enough.” Other UC regents did, however, support retaining the tests, and Napolitano’s decision to phase them out over a five-year period was essentially a compromise between the two sides.

So what does all this mean?

First, this decision is likely to create considerable additional stress and uncertainty for in-state UC applicants, undoubtedly in the short term and most likely in the long-term as well. Many California students will of course apply to non-UC schools that require standardized tests and be required to take the tests regardless.

If the UC system does succeed in creating its own standardized test by 2025—a proposition that almost seems deliberately set up to fail, given that the normal timeframe for developing such an exam is close to a decade—then California students applying to non-UC schools, non-test-optional colleges will have to take two separate exams—unless, of course, other schools choose to accept the UC test in place of the SAT and ACT.

Inevitably, UC’s decision will put pressure on other major public universities and university systems to go test-optional: schools that currently require tests will undoubtedly lose many applicants—and their tuition dollars—otherwise. At this point, it strikes me as unlikely that many other schools would go as far as to refuse to consider the tests entirely, but the situation is so fluid right and unpredictable right now that it’s difficult to speculate about what might happen in the long term.

As for the “diversity” justification… It’s hard to tell how much of this is posturing vs. sincere belief that removing testing requirements will result in a more even demographic spread (which is why, for the record, I have exactly zero interest in getting engaged in huffy debates on this topic).

At the beginning of the pandemic, when schools began to announce their moves to test-optional, I wrote about the massive financial hit that universities were about to take, and how they would take whatever steps necessary to keep themselves afloat—something that would undoubtedly involving attracting more full-pay applicants, likely at the expense of considering standardized tests, and that would be carried out with much fanfare about improving diversity, expanding access, etc.

Present events seem to support this prediction.

One factor that is not getting much discussion right now is the extent to which the public UC system has been cut off from state funding. In the mid-1980s, for example, about 50% of funding came from the state of California; today, the number is around 10-15%, and Governor Gavin Newsom recently proposed an additional 10% cut.

As a result, it’s no surprise that some schools in the UC system have come to depend on foreign students, who are generally full-pay and who—at least for the next several years—will presumably be far less likely to attend college in the United States.

At UC-San Diego, for instance, foreign enrollment has surged from 8% to 25% of the student body since 2008. At Berkeley, the figure is a little over 16% (10% undergraduate). At UCLA, the most popular school in the UC system, around 20% are international (12% undergraduate).

Likewise, recruitment of out-of-state students—who pay as much as $66,000, as compared to less than $30,000 for in-state residents—has increased over the last decade, with a full quarter of UC Berkeley undergraduates now coming from out of state.

It may very well be that by dropping the testing requirement, the UC system boost minority enrollment, but it also considerably expands the pool of full-pay applicants who can help keep the system functioning.

Next, what does this mean for the College Board and the ACT?

As the NY Times reports:

The [UC decision to drop the SAT and ACT], which follows many small liberal arts colleges, comes as the ACT and the College Board, a nonprofit [sic] organization that administers the SAT, are suffering financially from the cancellation of test dates during the coronavirus pandemic. One critic of the industry estimated that the College Board had lost $45 million in revenue this spring.

If you don’t know anything about the College Board’s revenue, then $45 million might sound like a very large number. The SAT is not, however, the College Board’s primary focus, nor has it been for a while. In reality, the AP program is where the CB is increasingly directing its attention, with the number of tests taken more than doubling since 2007.

In 2019, an extraordinary 5,098,815 AP exams were taken across all subjects. At $94/test, that’s $479,288,610—close to half of the College Board’s revenue, and growing.

In this context, the insistence on administering AP exams when the International Baccalaureate, British GCSEs and A-levels, etc. were canceled makes perfect sense. The loss of revenue simply would have been too great. The fees losses from cancellation of spring SATs were a drop in the bucket in comparison.

As I’ve pointed out before, the College Board does not release data about the relationship between the socio-economic status of test-takers and the full range of AP scores; it only releases data regarding passing scores, presumably to avoid the charges of discrimination that would inevitably arise if the complete data were released. (It would certainly be very interesting to the compare the average family income of students earning straight 5s on multiple exams to those earning 3s.)

If you look at the data in Massachusetts (where I grew up), for example, it’s easy to see that the percentage of 4 and 5s directly tracks with community wealth and education levels, with the percentage of 4s vs. 5s being generally correlated as well. In affluent communities like Brookline, Lexington, and Newton, the vast majority of scores (out of 1000+ tests) were 4s and 5s, with around 50% of scores being 5s. In contrast, only 6 scores out of 304 tests were 5s in Saugus, a working-class district.

Since there is nothing to indicate that UCs will be banned from considering test scores other than those earned on the SAT and ACT, then students from the wealthiest, most well-funded school systems will presumably still have a significant advantage. (And does such thing as AP tutoring not exist?)

The College Board might see its revenue decline slightly, but I hardly think the decision is an existential threat. From the years I’ve spent tracking the CB’s decisions, my sense is that the College Board saw the push to go test-optional coming years ago; despite the poor day-to-day management, it has been playing a much longer game than is generally realized.

It seems perfectly reasonable to assume that the SAT redesign was driven not just by a desire to compete with the ACT in the state testing market, but also by an understanding that the state testing market might eventually eclipse (or equal) the private testing market as a source of revenue for that test. Even if students’ families do not, or cannot, pay, districts will still shell out the funds—indeed, if states decide to use the SAT as a high-school exit exam, they will have no choice. Combined with ever-increasing AP revenue, that should keep the College Board on reasonably solid ground.

Despite the almost exclusive focus on the SAT as a source of inequity, the real loser here may ultimately be the ACT. Once taken primarily in the South and Midwest, it has become much more popular on the coasts over the last couple of decades. With the UC schools no longer willing to consider it, however, that could change dramatically. Lacking anything even remotely comparable to the AP program, it may be reduced to a regional player in the state-testing market, with a moderate number of additional students sitting for weekend administrations.