Test-Optional Admissions Policies: Enrollment Management Tool or Equity Reform?

• In Event: Rethinking Admissions Policies: Access, Equity, and Student Success

Abstract

Introduction/Background
Standardized admissions tests have long been central to college admissions in the United States, yet persistent concerns about their correlation with race, socioeconomic status, and access to test-preparation resources have fueled the test-optional movement. While early adoption was limited to a handful of selective liberal arts colleges, the COVID-19 pandemic dramatically accelerated the shift, with nearly 80% of four-year institutions temporarily suspending test requirements by 2020. Many institutions have since made test-optional status permanent, citing equity goals. However, recently the pendulum swings back as institutions reinstating standardized test scores in their admissions again. Evidence on whether these policies actually improve student diversity or academic outcomes remains contested.

Purpose/Research Question
This study investigates whether test-optional policies produce measurable improvements in student academic quality, institutional selectivity, and enrollment diversity, or whether they function primarily as enrollment management strategies. Specifically, the study asks: Do test-optional policies affect student retention, graduation rates, submitted SAT scores, application volume, admission yield, and the enrollment of underrepresented minority and low-income students?

Data
The study uses institutional-level panel data from the IPEDS, covering 1,518 four-year, nonprofit, non-open-admissions institutions from 2017 to 2023, yielding approximately 10,626 institution-year observations. Treatment status was determined by cross-referencing IPEDS admissions records with FairTest's longitudinal database of institutional testing policies. Of the 1,518 institutions, 1,168 (77%) adopted a test-optional policy during the study window, while 350 maintained continuous test requirements.

Research Design and Methods
The study employs a two-way fixed-effects difference-in-differences (DiD) design to estimate the causal effects of test-optional adoption, exploiting within-institution variation in policy status over time while controlling for time-invariant institutional characteristics and year-specific shocks. An event-study specification, using leads and lags around adoption year, tests the parallel pre-trends assumption and characterizes the temporal dynamics of any policy effects. Romano-Wolf stepdown-adjusted p-values correct for multiple hypothesis testing across eight outcome variables spanning three domains.

Results/Findings
Before multiple-testing correction, test-optional adoption is associated with a modest short-term increase in application volume and a minor decline in 75th-percentile SAT Math scores. However, after stepdown-adjusted p-values corrections, no outcomes reach statistical significance. Event-study estimates confirm that the application surge is transient, attenuating within two years of adoption, and that no sustained effects on academic quality, selectivity, or diversity are detectable. Minority enrollment and financial aid receipt show no significant response at any point in the adoption cycle.

Conclusion/Implications
The findings indicate that test-optional policies function primarily as enrollment management instruments, temporarily expanding applicant pools, rather than as meaningful catalysts of equity or academic change. Institutions and policymakers serious about diversifying access must look beyond admissions criteria to structural factors such as affordability, targeted recruitment, and pipeline programming. Test-optional policy may be one component of a broader equity strategy, but it cannot substitute for it.

Author

• Kiya Ma, University of Kansas
  Presenting Author