From Quora: My Answer to "How did the test prep for the ACT and SAT become such a huge industry?"

https://www.quora.com/How-did-the-test-prep-for-the-ACT-and-SAT-become-such-a-huge-industry/answer/John-Linneball

They’re important admissions tests. They’re standardized, so they look “official” and “unbiased,” and the College Board and American College Testing do their best to make them so. Colleges like Harvard and UC Berkeley started using them in order to make admissions fairer and not rely solely on “legacy” admissions of sons and daughters of alumni or the reputations of certain prep schools. The idea of the SAT and ACT makes sense, since there are very few quick ways to determine if an A student from a public high school in Jackson, Mississippi is as academically capable as a C student from Phillips Andover. However, in practice, the tests weren’t as good at predicting student success as their makers thought they would be.


A good capsule of the history of the SAT (and to some extent, the ACT), can be seen in a movie you can get at this site: The Test & the Art of Thinking . It also shows the problems with those tests and the current movement to get away from using the SAT and ACT, which conflicts with massive SAT and ACT expansion in school districts because of school testing laws and policies.
Since the SAT and ACT do test academic subjects (reading, writing, data interpretation, math, and on the ACT, science), they’re not intelligence tests, and can be “learned.” Since there are ways to prepare for the tests, test prep companies such as Kaplan came into being soon after many universities started using them. The tests also don’t correlate particularly well with academic success in college or career success, probably for the same reason - SAT and ACT skills can be learned and forgotten, similarly to any other high school subject. Don’t get me wrong - the math, reading comprehension, and grammar covered by the ACT and SAT are good things to know, but these tests aren’t the greatest way to test these skills, and having to do well on these tests isn’t the best way to encourage students to learn these skills.


Since SAT and ACT scores are a huge part of college admissions, along with school grades, the general performance of students from your high school/prep school at the institution to which you are applying, extracurricular activities, and college essays, and they’re the only ones that can be improved in a short time, the SAT and ACT are very important. In other words, you can’t do anything about your previous years’ grades once you’re a high school junior or senior, you can’t go back in time and join student government, the football team, and volunteer at a nursing home so you can show you’ve been doing those things since ninth grade, but you can improve your test scores.


As mentioned above, “standardized” test scores serve as a benchmark for comparing applicants from diverse backgrounds. While they’re far from perfect, they’re used as an “objective” standard to screen out applicants who won’t meet minimum academic standards for a given institution. Score too badly on the test, and you’re not going to some schools, no matter how good your grades are.
Since what college you attend can significantly affect your future career plans, earning potential, and the like, and the tests are a huge part of college admissions, the SAT and ACT are REALLY important.


Test prep companies and tutors (including me) know this and advertise their services accordingly. “Would you like to go to Harvard? Extracurriculars and grades are decent, but not amazing? Well, unless your parents aren’t celebrities or important politicians, you’re going to have to ROCK the SAT and/or ACT! Hey- we can help!”


Test prep companies have also naturally grown into college-admissions-advising companies, that will guide students from middle school to getting into the colleges of their choice.