GRE Gaining Ground over GMAT

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The case study might be too close to home, though, at M.B.A. programs, which are seeing new debates over how best to test applicants to their programs. For decades, there has been one way to apply to the top programs: You take the Graduate Management Admission Test, know as the GMAT. But in the last year, two top business schools — at Stanford University and the Massachusetts Institute of Technology — have started giving students an option of submitting scores on Graduate Record Examinations instead. Johns Hopkins University has also been giving students the option.
According to several other business admissions officials who asked not to be identified, their schools have been accepting GRE scores quietly — not publicizing it as an option, but not turning away applicants who want to be considered that way. And several consultants who work with applicants to business schools said that they have seen some of their clients obtain permission to use the GRE instead, on a case-by-case basis.
Proponents of the GRE option say they believe it may help business schools attract classes that are more diverse and more intellectual — and to land students who are considering both business school and master’s or Ph.D. programs in economics or other business-related fields. Applicants to business schools say that they also like the price: $140 for the GRE compared to $250 for the GMAT.
Some proponents say that they are intrigued by the GRE option but are facing pressure from the Graduate Management Admission Council, a group of leading business schools, which created the GMAT, not to deviate from requiring that test. Officially, the council’s rules demand that members require the GMAT. Council officials deny that they are pressuring anyone and note that they have not kicked out the business schools that no longer require GMAT. But tensions are evident in talking not only to council officials, but to business school leaders who say they are worried about offending the council.
At stake is a key part of the admissions process. Currently, nearly 250,000 students take the GMAT, which is required for admission to more than 1,800 business schools worldwide — about 60 percent of them in the United States. Those numbers would generate $62.5 million in testing revenue if everyone took the test once, but taking the test more than once is permitted and is not at all unusual — it is allowed up to five times by an individual in a year.
The fight over the business school admissions market took off in 2003, when the Graduate Management Admission Council stunned the Educational Testing Service and announced that it would end a decades-long relationship in which ETS produced and managed the test. Instead, GMAC awarded a contract — which started in 2006 — to ACT and a division of Pearson. For ETS, the shift was seen as a major blow.
Part of the reason ETS (which runs the GRE) could come up with a new way to compete with the test it formerly ran is that the GMAT has never been full of questions about the finer points of accounting or interpreting Sarbanes-Oxley. It is (similar in many ways to the GRE) a test of verbal, mathematical and writing skills. Around the same time ETS was embarking on revising the GRE — a process that has been anything but smooth, but that has had the testing service thinking about the markets it serves.
ETS has been making a point in the last year of calling business school officials to tell them about the revised GRE and to talk about how it might be used. But the institution most associated with the GRE experiment — Stanford — insists that ETS lobbying had nothing to do with its policy change.

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