In April, the private equity firm, Nexus Capital Management, bought the non-profit that administers the ACT. Change in college admissions is constant, but that doesn’t make these shake-ups any less anxiety-inducing for students and parents – especially when an excellent score can be the tipping point for a student to get admitted into their dream university. This acquisition will likely have a larger impact on colleges and universities than it will on test takers, but let’s run through what this means for your student in the short term and long term.
What Does This Change Mean in the Short Term?
Whether or not this change in ownership will immediately impact students largely hinges on two questions: 1) Has your student taken the ACT? and 2) If they haven’t taken it, when do they plan on taking it?
If your student has already taken the test and received their target score, then this change likely won’t have any significant impact on them. If anything at all, fees for reporting scores to colleges could increase (as a quick reminder, your student gets to send 4 scores for free), but even that change is unlikely to happen immediately under this new ownership. Instead, students who achieved their target score should focus their attention on the other components of their application, like their essay or resume.
Similarly, students who plan on taking the test in the next six months are unlikely to see any major changes to the testing format or pricing. The ACT (without writing) currently costs $68, and the SAT will be increasing its price to $68 in August. More likely than not, the ACT won’t increase its registration fee this year because that would make it more expensive than its primary competition — meaning many families would just opt to take the cheaper SAT.
However, the impact of Nexus Capital Management’s acquisition will likely be seen more in the long term.
What Does It Mean in the Long Term?
Because of Nexus’ acquisition, ACT, the nonprofit that administers the ACT, will be reclassified as a public benefit corporation. Without getting too into the weeds on tax law, that means ACT will have some accountability and transparency requirements—but possibly much less than previously. It will, however, still be part of a for-profit company, meaning ACT’s focus will also be on increasing revenue while decreasing cost.
Ultimately, administrators, marketers, and admissions departments in higher education will feel the full brunt of Nexus Capital Management’s ownership of the ACT. One of the ways that the SAT and ACT make money is by selling data to universities. Under a for-profit business model, that data will likely become more expensive—and that cost could be passed onto students through application fees and tuition.
Increased fees attached to the ACT are all but guaranteed at some point, but it’s impossible to know for certain when those increases will come and how much they could increase. However, any price changes will be announced well ahead of time and will likely still offer fee waivers.
Similarly, the format of the ACT could change in some way, but students, teachers, and parents will receive advanced notice about these changes—especially if those changes are substantial. Accounting for any upcoming changes to the ACT is always essential to getting your target score, which is why creating a test preparation plan is so essential.
The Enrichery’s test prep begins with a proven 4-month plan, but our coaches work with students to tailor that plan to fill in any content gaps while implementing test-taking strategies. If your high schooler plans to take the ACT in October, there’s still time to enroll in our test prep course. Schedule a session with us today!
