GRE vs. GMAT: The Battleground Moves to Europe

The Educational Testing Service, the nonprofit that administers the Graduate Record Examinations, wants the GRE to help students get into business schools, and Europe is the latest market in which it’s trying to find a foothold.

Forty-one out of 777 applicants to University of Cambridge Judge Business School’s entering class of 2013 submitted GRE scores as part of their applications, says Conrad Chua, head of MBA admissions at the U.K. school. He expects the percentage of applicants submitting GRE scores for acceptance into this year’s class to double to about 10 percent. That doesn’t matter much to Judge—“I’m quite agnostic on what test they take,” Chua says—but it matters to ETS.

For the last three years, the Princeton (N.J.)-based organization has been working hard to convince European MBA programs to accept the GRE. That means sending members of its outreach team to European campuses to argue that the GRE can stand alongside the Graduate Management Admissions Test, or GMAT, as a gauge of prospective business school students’ quality. Currently, 78 European business schools accept the test, ETS spokeswoman Christine Betaneli says. That’s a small percentage of the 1,100 MBA programs worldwide that accept the GRE.

Cracking the business school market is good for business. About 287,000 people took the GMAT in 2012 (PDF), helping the Graduate Management Admissions Council, the nonprofit that publishes the test, bring in $88 million in fee-based revenue, according to spokeswoman Tracey Briggs. About 2,800 MBA programs accept the GMAT, Briggs says.

The GRE began spreading to European business schools in 2006, when ETS and GMAC dissolved a non-compete agreement. In 2009, Harvard Business School jolted the MBA world when it began accepting GRE results, giving the ETS test instant credibility. Dozens of business schools followed, and 29 of the top 30 schools in Bloomberg Businessweek’s rankings of full-time programs in the U.S. now accept the GRE, says Betaneli.

To further its efforts, ETS began an aggressive marketing campaign, promoting the GRE’s benefits: The test offers business schools gender diversity and access to students with more varied interests because while the GMAT is mostly used for business school applications, the GRE is the most popular standardized test for a range of graduate programs. Over the years, ETS marketed the GRE to would-be MBAs as a cheaper test (it costs $65 less than the GMAT), as well as the appeal of its “score select” model, which lets test takers decide which schools to send results to.

The arguments ETS has made to U.S. programs also apply in Europe, says Mavi Calabrese, who runs ETS’s European outreach efforts. “The thing that’s very interesting for admissions officers is that they get a different pool of applicants from the GRE,” she says. “The fact that we have more women than men who take the test, for instance, is something like fresh air in the room.”

Calabrese’s first task was helping schools figure out how to compare GRE scores to results on the GMAT. IE Business School in Madrid, Spain was an early adopter, and currently has a representative on ETS’s business schools advisory council. (So does Insead in France.) “From my point of view, it’s a rigorous exam,” says Nita Swinsick, an admissions officer at IE. “It seems to be proving a good indicator of success within the program.”

The GRE is particularly useful to European business schools interested in geographical diversity, Calabrese says. That’s because the test is popular in the U.S., and growing quickly in Asia. ETS also offers a search service, which lets business schools buy the names of students who have taken the test. The going rate is about 37 cents per name, says Calabrese, though test takers can opt out.

Just because schools will accept the test doesn’t mean that students are taking it. IE has been accepting the GRE since 2009, says Swinsick, but only 3 or 4 percent of current students used GRE scores in their applications. Franz Heukamp, director of the full-time MBA program at IESE Business School in Spain, says that the school has made some exceptions for students who have asked to submit the GRE, but doesn’t accept the test as a rule. “If there were a lot of people coming forward with the GRE, we’d have to look at it,” he says. That hasn’t happened yet.

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