ETS (Educational Testing Service)
666 Rosedale Road
Princeton, NJ 08541
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).
Facts and Figures
Profit (Gross): $7 million
- 0.8% of Revenue
- Profits are 30% of the industry average
- ETS's exorbinant profits experienced a "coincidental" collapse after AETR's 2008 report.
CEO Compensation: $741,882
- CEO Kurt Landgraf is earning 256% of the industry average
Trustee Compensation (Avg): $27,971
- Total of 17 trustees/board members; All 17 are paid
- In violation of IRS guidelines
Political Lobbying Expenses: $218,163
- ETS incurred these expenses while it "attempted to influence national, state, or local legislation, includ[ing] any attempt to influence public opinion on a legislative matter or referendum."
- The entirety of this figure was spent "to influence a legislative body (direct lobbying)."
Specific Areas of Misconduct by ETS
Common Midconduct in the Industry
- Exorbitant Officer CompensationKurt 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.
- Paying TrusteesETS 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.
- Selling Test Preparation MaterialsIt is unethical for a non-profit testing company to sell test prep materials 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.
- Unacceptable Political ManipulationETS 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.
- Inadequate Grading PerformanceETS 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 Midconduct to ETS
- Incomplete Score Report DatabaseAt 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.
- Aborting Test LaunchesThe "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.
- Exploiting Test-Takers for ResearchThe 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.
- Exorbitantly Expensive Score ReportsAmerica'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.
Financial Records (pdf)
Ongoing News, Complaints and Criticism
From The Minaret: Simply, the biggest problem with tests like the GRE is that one cannot challenge the validity of the test itself. Instead, the test-taker must work within the established rules of the test, whether or not he or … More..
From Policy Mic: Eliminating this stressful, and quite frankly, painful process would help students see the road to college in a different light. Rather than focusing on the immense pressures and destroyed dreams, students could actually focus on the college’s … More..
From The Guardian: Over the past month ETS Europe has not only been handling the biggest crisis in Sats history but also one of the toughest recruitment jobs in finding a new marking director. Senior people at every exam board … More..
From the BBC: Concerns about the administration of this year’s school tests in England have prompted a call for payment to be withheld from the test contractor, ETS.
From FairTest: Their flagship products, such as the SAT and PRAXIS, are under increasing criticism in the media and the courtroom (see stories, this issue) for poor quality control. But top managers at the College Board and the Educational Testing … More..
From HorseSense and Nonsense: Educational Testing Service (ETS)–famed (or notorious?) publisher of the AP, SAT, LSAT, GRE, TOEFL, GMAT and most recently the HSEE–has again been granted an exclusive contract to administer the “mammoth” testing program for California students, grades … More..