Recently, ETS announced the acquisition of the U.S. college admissions testing organization ACT.
Source: ETS
Not long ago, ETS was rumored to be considering selling its TOEFL and GRE businesses, yet now it has announced the acquisition of ACT.
Source: WSJ
This move has sparked considerable attention: What exactly does this acquisition mean?
Why Did ETS Acquire ACT?
ETS stated that this acquisition aims to integrate the strengths of both parties in educational assessment, college readiness, and career development, further bridging the pathway from K-12 education to higher education and career development.
In the short term, the products and services currently used by ACT customers and partners will not be affected. At the same time, ACT will gain professional support from ETS in educational assessment, research, and innovation.
ETS's Glory Days Are Over
As one of the most influential organizations in global educational assessment, ETS has long been responsible for the development and operation of international tests such as TOEFL and GRE.
TOEFL is one of the most recognized English-language standardized tests globally and the most commonly used English proficiency exam for U.S. college applications.
However, facing ongoing competition from exams like IELTS, Duolingo, and PTE, as well as changes in the international study abroad landscape, the number of TOEFL test-takers has been declining in recent years.
At the same time, ETS is advancing a new version of the TOEFL reform. The test content has been further optimized, and a 6-point scoring system has been introduced, but the transition between old and new scores and institutional adaptation still requires time.
Source: ETS
GRE is one of the most influential graduate admissions tests globally and has long been used by many universities for graduate admissions.
However, with the outbreak of COVID-19, many universities made the GRE optional, leading to a sharp decline in test-taker numbers. The number of valid GRE test-takers dropped from 350,000 in 2020 to 200,000 in 2024.
Source: ETS
Furthermore, since GRE introduced the "at-home test" model, various proxy testing agencies have become increasingly rampant, leading to wildly inflated student scores and a collapse in the test's credibility. Many schools have explicitly stated that they will no longer accept at-home test scores, and some have even dropped the GRE requirement altogether.
Source: UCBerkeley
In addition to business challenges, ETS, as a non-profit organization, is also facing overall financial pressure. Since 2020, ETS has undergone multiple rounds of layoffs.
Source: Yahoo
Under multiple pressures, ETS has begun to readjust its business layout, and the acquisition of ACT is a significant step in this strategy.
ACT Is Also Having a Tough Time
ACT is one of the most influential college admissions testing organizations in the United States, and its ACT test has long been considered one of the two major undergraduate admissions tests alongside the SAT.
In recent years, ACT has gradually expanded into areas such as career skills assessment, K-12 educational assessment, and employment skills certification, establishing extensive collaborations with state education departments, school districts, and enterprises across the U.S.
Against the backdrop of the widespread adoption of Test Optional policies and pressure on standardized testing demand, ACT completed a privatization and restructuring in 2024, transitioning into a public benefit corporation, hoping to maintain its educational mission while enhancing operational flexibility.
Source: ACT
Since then, although some U.S. colleges have gradually reinstated SAT/ACT requirements, the standardized testing market has not fully returned to its previous pattern, and ACT still faces pressure from declining test-taker numbers and business transformation.
From a business layout perspective, this acquisition appears to be an important move by ETS to complete its business scope. In the past, ETS primarily covered international and higher education assessments, while ACT covered U.S. domestic K-12 education, undergraduate admissions, and career skills assessment.
The two businesses have strong complementarity, essentially enabling ETS to create a complete pathway from K-12 education, undergraduate admissions, and higher education to career development.
For students planning to take the ACT, it is currently unlikely that they will notice significant changes. ETS has stated that in the short term, the products and services that existing ACT customers and partners rely on will not be affected.
In the medium to long term, the possibility of major changes to the ACT test itself is limited, and the changes brought by the acquisition are expected to be more reflected in business-level integration rather than the test content itself.
The significance of this acquisition may not lie in changing a single test but in reshaping the future direction of an educational assessment institution.
