Educational nonprofit ETS is acquiring ACT — roughly two years after the standardized test maker was taken over by a private equity firm.
The deal will create a testing giant reaching 35 million people every year and comes as several universities announce a return to requiring standardized tests for admissions.
Terms of the acquisition were not disclosed. The deal was expected to close on July 1, according to an ETS spokesperson.
Los Angeles-based Nexus Capital Management acquired ACT in 2024, converting the nonprofit college admissions assessment organization into a for-profit company in the process. Following the deal, ACT became part of a public benefit corporation majority-owned by Nexus that also included an enrollment management subsidiary called Encoura. The latter is not part of the ETS deal.
ETS owns the GRE and the TOEFL English assessment and until 2024 it administered the College Board’s SAT, the other behemoth in the college readiness field. As part of the acquisition, ETS will get WorkKeys, a workplace skills certification program that also awards the National Career Readiness Certificate, according to ETS CEO Amit Sevak.
Sevak told Higher Ed Dive his organization approached Nexus about acquiring ACT. ETS saw the acquisition as a chance to obtain a widely known brand as it looks to expand and address sagging confidence in educational institutions, Sevak said. “We initiated the discussions as an opportunity for us to bring forward our mission to the country.”
The nonprofit ETS plans to keep the ACT pieces for-profit for now. But Sevak said ETS will operate ACT as a mission-focused organization, adding that ETS could eventually change the company’s legal status.
ETS plans to invest in some of ACT’s products. But with the deal still very fresh, leaders still need to forge detailed plans, Sevak said. “We're really interested in the opportunity to take some of their products and think about how we could take them to the next level,” he said.
ACT CEO Steve Tapp said in a statement that the combination “will allow us to take what we’ve built and scale it within a broader vision for readiness.”
Standardized test requirements coming back
More institutions are essentially re-adopting the ACT and SAT as an entrance standard, following a pandemic-era experiment in test-optional admissions when public health concerns interrupted in-person testing.
Prior to then, however, there were still plenty of critiques around standardized testing. When the University of California considered dropping standardized testing requirements in 2019, a coalition of civil rights lawyers argued the two mainstay tests fail to predict student performance in college.
“Research demonstrates that the SAT and ACT systematically prevent talented and qualified students with less accumulated advantage — including students with less wealth, students with disabilities, and underrepresented minority students — from accessing higher education," they wrote in a letter to system regents.
Over 2,000 four-year colleges in the U.S. aren’t requiring SAT or ACT scores for their fall 2026 admissions, according to FairTest, a group that looks to address flaws in and misuses of standardized testing.
Criticism around racial and class bias have persisted. As Harry Feder, executive director of FairTest, put it at a 2024 conference: “What do the tests tell us? They tell us how wealthy your parents are. To near perfect correlation.”
However, some prominent institutions have announced a return to standardized tests for admissions, including all eight Ivy League institutions. Many cited internal data showing the test scores to be useful indicators of student success.
UC adopted test-optional admissions permanently in 2020. But some faculty have pushed the system to bring back some testing standards. In an open letter, over 2,100 STEM faculty across the system cited lack of mathematics preparation among enrolled students as a reason.
Hundreds of humanities and social science faculty signed a separate letter stating the “growing use of AI also makes essays a less reliable indicator of these abilities” and saying standardized tests could help screen for students for critical thinking skills in an AI-era.
Meanwhile, the Trump administration has taken a keen interest in standardized test requirements. In the White House’s proposed compact with colleges — a deal that would give institutions preferential treatment in research grants in return for adopting a broad suite of administration-preferred policies — included a standardized testing admissions requirement. None of the major research institutions invited to sign the compact have done so..
Sevak sees all of these discussions as opportunities for ETS and ACT.
He described bias-testing for large-scale tests as part of the “secret sauce” of his organization. “One of the key ways that we do that is around measuring subgroups,” he said, describing a process for testing new questions with different demographic subgroups before being added broadly to their products.
ETS also uses technology and artificial intelligence to root out bias in its tests, with human oversight to ensure the AI isn’t biased in turn, according to Sevak. He said that experience can help to ensure fairness in the ACT's test.
“It's a highly automated process at ETS,” Sevak said. “It's a big part of what we've been investing in the last couple of years.”
Sevak said he thinks his organization and ACT can help rebuild trust in educational institutions and enhance pathways through educational pipelines and from education to the workforce.
“What's the measure of a nation?” he said. “While some people may say it's our stock market, or it's the GDP, or it's some other financial metric, we'd like to propose that this kind of deal that we're doing, bringing ETS and ACT together, is really reinforcing that the true measure of a nation is actually investing in our human capital.”
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