Test optional admissions - an inside perspective
As a former Director of MBA Admissions, I have reviewed thousands of applications. The Graduate Management Admissions Test (GMAT) was historically the only test that business schools used for admission consideration, because it was the only test designed specifically to predict an applicant's potential for academic success in graduate management courses. As admission to business schools became more competitive and as the MBA lost some traction to other specialized master's degrees in business disciplines, business schools began to accept the Graduate Record Exam (GRE) in addition to the GMAT.
In some cases, the standardized test was waived altogether - a working professional student with significant professional experience and a minimum GPA requirement might have the GMAT/GRE waived, for example. Some military candidates had their test waived, as did some students pursuing combined degree programs (JD/MBA, MD/MBA), because many of these had to take a test for their other graduate or professional program.
For working professional students who were pursuing school on a part-time basis, it was less risky to offer admission without a standardized test. Clearly this kind of student is focused, driven, and motivated to pursue an advanced degree. With evidence of previous academic success and professional accomplishments, we could confidently predict whether they could handle the coursework in business school.
For students who were seeking full-time study and who wanted to be considered for merit-based financial aid, it was a bit more tricky. Just as each high school doesn't match up equally in terms of academic rigor and quality, the same is true of undergraduate institutions and majors. If we only had undergraduate GPA to go by as an academic measure and the student did not feel like this GPA was reflective of their future potential, we would typically ask for the GMAT or GRE as a supplemental data point. We would also need it if the undergraduate coursework was missing evidence of analytical and quantitative aptitude, since these are critical for success in business school. Since MBA students are typically applying 4-7 years after graduating from college, a lot can change. They are often very different people than they were in college. Sometimes these students have very good explanations for why their GPA wasn't strong, yet without another metric, it is hard for an admissions officer to assess their academic potential or award for academic merit.
I am definitely intrigued by the increasing number of colleges and universities offering test optional admissions. The research shows that strong grades in high school are absolutely a better indicator of college readiness and predictor of college graduation than ACT or SAT. It also shows that elimination of the test reduces barriers for underrepresented groups and thereby increases diversity in enrollment. Students that struggled in high school and need another data point to prove their academic potential can choose to take the ACT or SAT, while those that have plenty of other evidence can opt out. Furthermore, many of the most competitive schools in the country don't even offer merit-based funding to freshmen, as the whole incoming class would qualify. So, eliminating the SAT or ACT as a metric used for merit aid consideration wouldn't really change the outcome of the funding package in many cases. When merit aid is offered, criteria such as high school academic record, extra-curricular, co-curricular activities and community involvement can be considered. As long as the schools have a way to fairly evaluate candidates for admission on the basis of their other application requirements and in comparison to the other candidates in the pool, I wouldn't be surprised to see this trend continue.