Testing Out — UC and the SAT/ACT: A Cost-Benefit Breakdown of the Policy

By Rob Toutkoushian, Professor of Higher Education

In May 2020, the University of California (UC) announced that over a five-year period, it will phase out the requirement that applicants submit SAT or ACT scores and will develop and implement its own standardized test. If a new UC-specific test is not developed after five years, then UC will abandon the use of standardized tests altogether. 

Major media outlets, such as The New York Times, The Chronicle of Higher Education, and Inside Higher Education, ran stories and commentaries debating the move. Opponents of the use of standardized tests in admissions heralded the move as a victory on the grounds that tests favor students with higher socioeconomic status and selected personal characteristics, and impede enrollment diversity goals. Other authors argued that institutions would lose the common objective indicator by which to compare applicants across schools and states and harm late-blooming students. 

Setting aside the debate as to whether standardized tests should or should not be used to inform college admissions decisions, let’s examine the UC action from a policy analysis perspective. The two actors in this example are the University of California (who is implementing the policy) and students who might apply (who are affected by the policy). How would each of these actors benefit from the policy? What costs might each actor incur as a result of the policy? Will the benefits of the policy exceed the costs for each actor? And are there any unintended consequences from the policy?

If UC develops a test is superior to the SAT / ACT, then the policy has value to UC because evaluators could improve admissions decisions. Proponents of the change argue that the new test would be designed to reflect the specific admission requirements of the UC system. There may also be some benefit to UC if the new policy leads to an increase in the quantity and/or quality of applications, or allows the institution to better achieve its enrollment management goals and objectives.

The costs of the policy to UC will be high because UC will need to spend time and money to develop a brand new test. In addition, UC will incur substantial costs to implement, process, grade, and manage the annual testing. When complete, the UC test could have the same concerns as may be present with the SAT and ACT, and it could be worse. The College Board and ACT have spent years and millions of dollars in creating and modifying their tests to address these concerns.

A similar analysis of the benefits and costs to students of the new policy reveals uneven results. Students who perform better on the yet-to-be-developed UC standardized test may benefit from the change, but of course, other students may fare worse on an unknown test than they would on the SAT or ACT, which both have an array of preparatory resources. The costs to students in the short term may be slightly lower for those who only apply to a UC institution and choose to not take other tests. However, many students will continue to take the SAT or ACT because they will apply to non-UC institutions and because merit-based financial aid awards remain partially based on these standardized test scores. Therefore, if UC is successful in developing and implementing its own standardized test, the cost to students would increase for many who now must pay for an additional exam, and spend time and effort preparing for it. In the long term, if other institutions follow UC’s lead and also develop their own standardized tests, students would potentially have to take and pay for a number of different tests when applying to colleges rather than only one or two.

It is possible that the (unwritten) intent of the UC policy is that the new test will not be developed, and this move is a politically expedient way for the UC to abandon the use of standardized tests in admissions. Eliminating the costs associated with a separate UC test would improve the cost/benefit assessment. Even so, it is unclear that the benefits from this policy would exceed the costs for the UC and its potential students. 

From the institution’s perspective, the cost savings from longer using standardized tests in admissions is pretty minor. Standardized tests are but one of several components currently used in evaluating applicants. A range of factors (high school grades, difficulty of classes, recommendations from teachers and guidance counselors, involvement in sports and extracurricular activities, and written responses to institution-provided prompts) play into decisions to varying degrees. Moving away from objective and easy to interpret metrics, such as SAT scores, toward subjective metrics, such as scores on essays, introduces more opportunities for bias and uncertainty. It is unknown whether this shift will enable UC to craft a better incoming class. 

The impact of eliminating standardized testing in admissions on a student’s chance of admission could likewise be positive or negative. The students who potentially benefit the most are those who have relatively low SAT or ACT scores and relatively high performance in GPA, personal essay, and extracurricular activity sections. Unfortunately, these components are subject to the same criticisms as standardized tests in that they tend to favor students from higher socioeconomic backgrounds and with particular personal characteristics. 

Viewed from a policy analysis standpoint, some important concerns emerge amid much uncertainty about the impact of the policy change on students and the UC institutions.