Most students will recognize the non-profit College Board for its SAT/PSAT exams, along with coordinating Advanced Placement (AP) courses and tests. Established in 1900, it was formerly called the College Entrance Examination Board organization and was founded to standardize the highly varied college admissions processes throughout the nation. Over time, the College Board’s dominance of the admissions system grew, with over 90% of universities and colleges accepting both SAT and AP test scores for college admissions. However, College Board’s elite status as a trusted non-profit solely dedicated to improving the quality of hopeful applicants to higher education is not as pure as people may believe.
Each year, non-profit and tax-exempt corporations, including Section 501(c) organizations, are required to file the Form 990 with the IRS. These are then released to the public within 18 months of filing, which provides insight into these corporations’ finances. Starting from 2012, the College Board corporation has grown its cash and investment holdings by over a billion dollars to a total of $1.7 billion, according to their historical records published by investigative journalism organization ProPublica. A significant amount of these current holdings, worth almost a quarter billion dollars, are located in offshore Caribbean tax-exempt investments, according to the most recent publicly-available Form 990 from 2023.
These investments, which include publicly traded securities, would normally require all corporations that hold them to pay taxes on the earnings. The tax-exemption status of IRS Section 501 Organizations only applies to business-related income. Additional revenue, such as from unrelated sources, requires a payment of unrelated business income tax (UBIT). By holding these profitable securities and investments in offshore tax-free locations, College Board can maximize its own profits. Their total profits from investments, which were not taxed, was over $63 million in 2023, according to their IRS Form 990. Considering the already massive amount of revenue generated by charging testing fees, College Board is clearly focused more towards profiting excess amounts through these unethical sources that are not clearly disclosed to students, teachers, and families.
Additionally, it is clear that College Board is providing excess monetary compensation compared to corporations with similar revenues. Non-profits are supposed to only provide “reasonable compensation” for employees, according to the IRS. But using their large sums of cash, College Board is able to pay their executive team unreasonable amounts of compensation. In 2023, David Coleman, the CEO of College Board, made over $2.3 million, according to College Board’s latest Form 990. In fact, Coleman’s salary over doubles some of the 16 large U.S. foundations (non-profits created for charitable purposes), according to an independent report on non-profit foundations by The Chronicle of Philanthropy.
Continuing on, around 2 million students took at least one SAT, and over 3 million students took at least one AP exam last year, according to College Board. During this period, administration of the SAT suite of examinations began transitioning from physical paper and pencil tests to a fully digital system. This change allowed the SAT to become adaptive based on your performance on certain sections and be scored more easily through automated systems. Instead of having to package, ship, and manually grade the physical SAT paper exams, College Board can precisely determine scores with a very quick turnaround.
However, the change to a fully electronic system left several test details unchanged. The actual time to receive the scores stayed roughly the same at two to three weeks. The streamlined process through removal of printing and shipping logistics was actually followed by an increase in pricing. In 2021, the SAT exam fee was $55, but the cost has grown to $68 this year. Additionally, the fees for test cancellations and late registrations have only increased. The cost to register within two weeks of the SAT date is over half the base exam fee, totaling $106.
By constantly increasing the end price for exams and cutting costs behind the scenes, College Board is able to position itself as being pro-education while secretly paying their top executive team millions of dollars. This unethical practice of profiting off unsuspecting students and families continues to occur, and while many will continue to support College Board for its educational services and courses, the number of uninformed supporters will continue to grow unless major revisions occur.
