The new GRE – GMAT Killer?

At one time, the Graduate Management Admission Test (GMAT) was the de facto exam students took to get into business school. But in 2006, the creators of the GMAT, the Graduate Management Admission Council (GMAC), decided to sever ties with the Educational Testing Service (ETS), which had administered the exam up to that point. The move, which ended the non-compete clause that GMAC held on ETS, allowed ETS to challenge the stranglehold that GMAC had on the business college exam.

Since 2006, ETS has campaigned for schools to accept the GRE as an alternative to the GMAT. According to an ETS press release, “about 450 MBA programs worldwide now accept the GRE test, including 45 percent of US News & World Report’s top 100 master’s programs and seven of the top 10 master’s programs in global business according to the Financial Times.” These schools include some of the world’s top-ranked business schools, such as Harvard, Stanford, and Wharton at UPenn, Stern at NYU, and Sloan at MIT.

In addition, the revised GRE test, which will be released in August this year, is partly intended to make the test more attractive to business schools. The ETS website states, “ETS has revised the test to better reflect the kind of thinking you’ll do in graduate or business school and to improve your test-taking experience. New types of questions now align more closely with the skills you need To succeed in highly demanding graduate programs and business schools.” Removing similes and antonyms, for example, shifts the focus away from memorization and toward analysis and understanding.

It is not surprising that more and more schools are starting to accept the GRE. ETS estimates that there are approximately 700 GRE test centers in 160 countries around the world. Contrast that with a 2010 GMAC press release, which estimates there are 500 testing centers in 110 countries. Schools that decide to accept the GRE can expand their applicant pools by making them more suitable for international applicants applying to US business schools in this age of globalization. In addition, the transition to GRE admission is also beneficial for students. Those trying to choose between going to grad school and going to business school don’t have to choose one over the other or worry about taking two exams (and paying the registration fee for two) — they can simply take the GRE and apply to both. Testmasters recommend that prospective students take both tests and submit the higher score.

With the upcoming release of the new GRE and the momentum the ETS has gained over the past several years, we can expect to see more and more business schools accept the GRE for admission. Of course, the GMAC isn’t simply wringing its thumbs as ETS courts its primary market—the GMAT is slated for a major facelift in 2013 to give the exam more business-oriented content.

But who knows? By then it may be too late.