Getting Americans to agree on anything these days is difficult, but one aspect many parents agree on is that they'd like to see their children do better. This all starts with their education.
Perhaps the most important deadline for parents and high school seniors alike is approaching in less than one week: the registration deadline to take the SAT prior to sending off college enrollment applications.
The SAT is a standardized test that colleges and universities use around the country, in addition to a student's grade point average, to determine whether or not to accept high school applicants for enrollment. Furthermore, the combination of SAT scores and a student's GPA can go a long way toward determining whether or not they'll qualify for a full or partial academic scholarship.
The importance of college entry exams
How important are scholarships? Incredibly important, according to estimates from The College Board. Based on data from The College Board in 2012-2013, the average published tuition and fee price at public four-year institutions was $8,655 per semester, but the net tuition price paid by students or their parents is a hair over $2,900 on average. In other words, scholarships, along with other taxes and credits, reduced the actual amount paid for the average four-year education by roughly 65%!
We also know, based on research from the Pew Research Center, that going to college is significantly advantageous over one's lifetime with regard to income potential. Millennials aged 25 to 32 who have only a high school diploma earn a median of $28,000 per year. By contrast, millennials in the same age bracket that had a four-year degree brought in $45,500 on average -- a $17,500 annual difference.
But, let's face it: Not all students are going to score well on their SAT or ACT exam (the ACT is an alternative college readiness exam that most colleges will accept in place of the SAT). Scores vary widely, because students have varying degrees of motivation, test-taking abilities, and sheer grasp of the core concepts that the SAT and ACT tend to focus on.
Yet these test scores are vital to students' scholarship eligibility and their odds of being accepted by the college of their choice. No parent wants their child to graduate mired under a mountain of debt, especially since a recent study from Gallup-Purdue showed that higher student debt levels (in excess of $50,000) can lead to physical and financial detriments that can hinder them, rather than help them.
SAT prep costs: Are they worth it?
The big question that parents need to ask themselves, then, is whether or not SAT prep materials or courses are worth the money for their child.
Some costs are rather negligible. According to College Board, the SAT test will set you back $52.50, with a number of other optional costs, such as a study guide offered at $22.99.
However, some costs aren't as negligible. A 30-hour preparatory course with the Princeton Review will set parents back between $1,000 and $1,600, depending upon the size of the class. ArborBridge, an online tutoring and videoconferencing company, charges as much as $2,500 for a 12-hour program, or $9,000 for a 60-hour test preparation service, though the company claims their students average about 200 points better on their SAT once they've completed ArborBridge's preparatory package.
Similarly, tutors can come with substantial fees. As The New York Times recently pointed out, New York-based tutor Anthony-James Green charges his clients $1,000 per hour, but he can also claim that his students see a 400-point improvement on their test scores. It's quite possible that if these claims hold water, these preparatory courses could help a student get into a more acclaimed university and/or earn scholarship money.
But parents also have to realize it's a bit of a gamble. At $9,000, ArborBridge's course cost is higher than the average in-state tuition and fee costs at a four-year public university. According to Allison Kade of LearnVest, herself a longtime SAT tutor, some students show considerable improvement with SAT prep courses, while others demonstrate little to no change.
Kade has identified three general types of SAT students over her many years of tutoring:
- Smart kids who could use help with test-taking (who Kade notes often show the biggest score improvements).
- Kids who need more help with the underlying material (this group often sees improvement to a lesser degree).
- Kids who don't seem to care (not surprisingly, this group shows little to no improvement).
Kade says understanding how motivated and confident your child is regarding the SAT can go a long way toward making a smart decision regarding whether it's best to hire a tutor or enroll your child in an SAT preparatory course. If your child is among those who either don't care or already understand core concepts and are confident, then enrolling them in an expensive preparatory course likely won't be a smart investment. On the flipside, if your kid is simply lacking confidence in the subject matter or is nervous but has plenty of motivation, then spending the small fortune to potentially improve his or her score might be worth it.
One thing to keep in mind
There's one more thing parents should keep in mind about their child's education and chances to enroll in college: The most prestigious colleges in America may not net them the best-paying jobs.
Based on the most recently updated data from PayScale, which looked at students' college-based return on investment (essentially tuition cost versus cumulative post-college earnings), many of the most prestigious institutions -- e.g., Harvard, Yale, and Princeton -- didn't even make the top 30!
PayScale aggregates data from more than 1,000 colleges and 1.5 million employees with degrees, so it's a reputable source to reference return on education. Military and technology-focused schools tended to have the best ROI of any colleges, with a number of state institutions also near the top of the list. The implication here is that choosing a less expensive school -- and perhaps one where scholarship money is easier to come by -- may be a smart way to ensure your child has an excellent chance of success.
Although every child's situation differs, the key takeaway here is that college is critical to achieving upward mobility in terms of income, but the reward of paying for an SAT preparatory service really depends on factors concerning your child's motivation, as well as what college he or she wants to attend.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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