AETR REPORT CARD

ETS (Educational Testing Service)                Grade: F

666 Rosedale Road Princeton, NJ 08541

Contact ETS at their official Contact page

Introduction

ETS is notorious for raking in enormous profits and paying huge compensation packages to its officers and trustees, despite the fact that it is supposed to be a non-profit company. Besides financial misconduct, ETS is responsible for some of the most abhorrent testing policies in the industry. This includes forcing paying test-takers to serve as guinea pigs so that it can try out experimental testing materials at the expense of test-takers' scores.

On June 20, 2009, AETR submitted to the IRS a formal request for the revocation of ETS's non-profit status, including a Form 13909 "Tax-Exempt Organization Complaint (Referral) Form" that specifically names 17 individuals for inappropriate conduct. (Download the complete 6-page request in PDF format).

Mission Statement

"To advance quality and equity in education by providing fair and valid assessments, research and related services. Our products and services measure knowledge and skills, promote learning and educational performance, and support education and professional development for all people worldwide."
   - From "About ETS"

Facts and Figures (2007)*

* Facts and figures are based on the ETS tax filing (IRS Form 990) from 2007, the most recent records available. This document and other financial records are available for download below.

Specific Areas of Misconduct by ETS

Common in the Industry

1) EXCESSIVE PROFITS.   A for-profit company would be proud of posting profits of almost 11 percent. For a non-profit company, profits this enormous are shameful. What isn't being used to pay for exorbitant officer and trustee compensation packages is being funneled into subsidiary companies or massive investment accounts. ETS is abusing both its testing monopoly and its non-profit status. It needs to charge test-takers less, or start paying taxes like other for-profit companies.  Learn more about the Big 3's big profits.

2) EXORBITANT OFFICER COMPENSATION.   Kurt Landgraf is being compensated almost a million dollars per year, with a total compensation package of at least $997,608. That is far more than the CEO of the United Way (America's largest non-profit company), and well over twice as much as the President of the United States. Furthermore, there are twelve "Senior Vice Presidents" and thirteen "Vice Presidents" that are paid an average of $368,679 per year. The top five Directors are compensated an average of $353,619 per year. All told, ETS is compensating its top echelon more than $10.2 million per year. These salaries are far too high for a non-profit company.  Learn more about the Big 3's exorbitant executive compensation.

3) PAYING TRUSTEES.   ETS is paying its Trustees well over half a million dollars a year - there are trustees being paid between $600 and $800 per hour. The vast majority of non-profit companies don't pay their Trustees, the Trustees are willing to volunteer their time for a good cause. Paying Trustees at all is suspicious, but at these rates it is an outrage.  Learn more about the Big 3's inappropriate pay for its governing board members.

4) SELLING TEST PREPARATION MATERIALS.   It is unethical for a testing company to sell test prep materials (see the official "ETS Store" online) because it is morally and legally obligated to treat all test-takers fairly. Selling test materials only gives an advantage to wealthier students - ETS should leave test preparation to unrelated for-profit companies.  Learn more about the Big 3's unethical sales of prep materials.

5) UNACCEPTABLE POLITICAL MANIPULATION.   ETS spent more than $144,000 in 2007 on "direct" lobbying. This money was used to influence your legislators and government officials to adopt, and even require, ETS tests for various educational and professional purposes. A company is given non-profit status in order to serve the public interest, not to covertly manipulate legislators in order to expand its monopoly position. ETS needs to reign in its inappropriate manipulations of our government.  Learn more about how the Big 3 manipulate politics.

6) INADEQUATE GRADING PERFORMANCE.   ETS has a long history of poor grading performance across its array of test offerings. In 2004, thousands of teachers were incorrectly given failing grades on the Praxis exam and were turned away from teaching jobs. On the GRE, is not uncommon for test-takers to score in the 90th percentile on Quantitative and Verbal sections of ETS-administered exams, but on the Written/Analytical portion of the test score below the 40th percentile. Despite the fact that grading errors are common (this fact has been proven and verified by many experts and official sources), ETS charges large fees for grade reviews if it allows them at all (i.e. a fee of $55 for re-evaluation of the Analytical portion of the GRE, or $120 for the TOEFL). Even if it is discovered that ETS has issued an erroneous score, it will not refund your money. It is unconscionable for ETS to require test-takers to pay for its own mistakes. It is only fair for score reviews to be automatic when the discrepancies between computer-scored and human-scored portions are too large. Test-takers have a right to accurate grades.

Unique to ETS

7) INCOMPLETE SCORE REPORT DATABASE.   At the end of the GRE exam, a test-taker is only allowed to send exams to the schools listed in the system. The system is difficult to use and is not fully comprehensive. This is unsurprising, as ETS charges large fees to test-takers that must send score reports after the test date. The after-test score reporting engine needs to be modernized and updated to ensure that test-takers are not being taken advantage of.

8) ABORTING TEST LAUNCHES.   The "new" GRE exam has been announced multiple times in the past few years, only to be further delayed at the last moment every time. This is highly suspicious, due to the fact that test-takers are heavily encouraged by various parties to take the GRE before the newer version, which is touted as both more expensive and more difficult, is released. GRE reservations (and ETS revenues) have seen huge increases immediately before the new test was supposed to arrive. However, again and again, the new GRE deployment has been delayed. This increasingly appears to be a revenue-boosting tactic on the part of ETS. Next time, the new version of the GRE needs to actually be put into action after it is announced.

9) EXPLOITING TEST-TAKERS FOR RESEARCH.   The Quantitative portion of the GRE exam is widely accepted as being too easy; so many test-takers score at the top that the results of the test as a whole are less valid. For many years ETS has been researching and developing a more difficult replacement, and verifying the validity of this new version requires real test-takers to try it out. However, rather than following standard testing practices and encouraging test-takers to volunteer (perhaps by enticing them with some fraction of their $94 million in profit), ETS abuses its monopoly power and simply forces ordinary GRE test-takers to do it - in the middle of their real exam! ETS refers to this component as the "Unidentified Unscored Section." It is extremely difficult, mentally taxing material, and makes the exam (which is already 3 hours long) 45 minutes longer. However students cannot avoid it because it is "unidentified" and there is a chance it might be the real, graded Quantitative section. This ETS policy is a highly unethical abuse of its monopoly power. These paying students are required to take this exam in order to be considered for graduate school, and ETS is remorselessly taking advantage of them. Test-takers should be given the opportunity to opt-in to this research program, and should be offered compensation (such as a significant discount on the exam fee) for participating.

10) EXORBITANTLY EXPENSIVE SCORE REPORTS.   America's aspiring teachers are forced to pay $40 to have Praxis exam score reports sent to the schools they are hoping to be hired at. After paying hundreds of dollars for the Praxis exams themselves (which are required by almost every school district in the U.S.), why should America's up-and-coming teachers be required to pay so much money for ETS to simply print and mail a brief report? With such extraordinarily high score report fees, ETS is only hindering American teachers from succeeding.

Criticism From Other Sources

•  New York Times
"Testing Giant Exceeds Roots, Drawing Business Rivals' Ire." By Jon Nordheimer and Douglas Frantz (30 Sept 1997)
http://www.nytimes.com/1997/09/30/us/testing-giant-exceeds-roots-drawing-business-rivals-ire.html?n=Top%2fReference%2fTimes%20Topics%2fOrganizations%2fE%2fEducational%20Testing%20Service

•  Canadian Centre for Policy Alternatives
"Putting ETS to the Test." By Patricia McAdie and Erika Shaker (1 June 2001)
http://www.policyalternatives.ca/reports/2001/06/reportsstudies476/?pa=BB736455

•  FairTest.Org
"College Admissions Testing: The Real Beneficiaries." (Oct 2001)
http://www.fairtest.org/college-admissions-testing-real-beneficiaries

•  Business Week
"Why The Folks At ETS Flunked The Course." (29 Dec 2003)
http://www.businessweek.com/magazine/content/03_52/b3864044.htm

•  New York Times
"Grading Mistakes Caused More Than 4,000 Would-Be Teachers to Fail a Licensing Exam." By Karen W. Arenson (13 July 2004)
http://www.nytimes.com/2004/07/13/us/grading-mistakes-caused-more-than-4000-would-be-teachers-fail-licensing-exam.html?sec=&spon=&pagewanted=all

•  Teacher Watch
"ETS Monopoly Continues." (11 Nov 2005)
http://andyhilbert.blogspot.com/2005/11/teacher-watch-ets-monopoly-continues.html

•  FairTest.Org
"No 'Pay for Performance' at Testing Companies." (May 2006)
http://www.fairtest.org/no-pay-performance-testing-companies

•  BBC News (UK)
"MPs criticise testing 'shambles'." (20 May 2008)
http://news.bbc.co.uk/2/hi/uk_news/education/7409234.stm

•  The Guardian (UK)
"A history of exam failures." By Polly Curtis (19 July 2008)
http://www.guardian.co.uk/education/2008/jul/19/schools.uk1

Finacial Records (PDF Format)

• IRS Form 990 (2005)

• IRS Form 990 (2006)

• IRS Form 990 (2007)

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