The Financial Implications of the Academic Index

As college has become the expected destination after high school, especially for the children of high income earners, colleges tend to get a higher number of applications. With the streamlining of the internet based application process, it is easier than ever to apply to a large number of schools. More students have access to schools they would ignore in the past because college information is so ubiquitous.

Schools need a way to weed out applications. Admission staff and resources haven’t grown to accommodate the increased number of applicants. Many schools are overloaded with applications, but they have a hard time saying no to the associated application fees. 

The schools are turning more and more to standardized tests and other screening algorithms to make their applicant pool fit the “ideal freshman class.”

If you’re looking to gain entrance to some of the most prestigious schools, namely the Ivy League, there is a metric they use to rank their applicants and you and your students should know how it works.


Academic Index

The Academic Index (AI) is a ranking system that was originally used by Ivy League schools to rank their student athletes. The Ivy League schools calculate the academic index for both the student-athletes and regular students. The schools have an agreement that the average AI of their student-athletes can’t be more than one standard deviation below the average for non-athlete enrollees in a given class. 

The purpose of this was to preserve the academic integrity of the schools. The average AI of student athletes at other non Ivy League institutions can sometimes be four times lower than nonstudent athletes. For example, the average AI for each Harvard academic class hovers around 225. The average AI of non Ivy League student-athletes is around 150. For Harvard, the AI of the average student-athlete would need to be around 210. I’ll explain what these numbers mean shortly. Whether your student is an athlete or not, these numbers are calculated and have an effect on admission. 


What makes up the  AI

The Academic Index is a calculation from a combination of three criteria. They are the SAT I, SAT II (subject exams), and either your student’s school rank or GPA. That means your student has to take usually two or more SAT subject exams to even be able to measure the Academic Index. Other schools have versions of the Academic Index. They don’t necessarily have to be Ivy League. In fact, if your prospective school is on this list then there is a good chance it has a calculation similar to the AI and you should look into any calculations with an admissions counselor before applying. 


How to Calculate Academic Index

  1. Take the average of the SAT I scores and divide by 10
    1. Example (Reading score: 690, Math score:710, Writing score: 700, Average 700/10 = 70
  2. Take the average of all SAT II tests submitted. Most require at least two tests and some schools require three.
    1. Example (U.S. History 640, Chemistry 680, Average 660/10 = 66
  3. Composite Performance Score (CPS): consists of Weighted/Unweighted GPA or Class Rank: This one is a little more tricky and I would recommend going to an AI calculator here or here. You can get a rough approximation by multiplying the unweighted GPA by 20. If you want a better calculation then use one of the calculators.
    1. If your student had an unweighted GPA of 3.7 the score should be around 74
  4. Add them all together 70+66+74 = 210

If your student takes the ACT instead of the SAT you can get a pretty good idea of the Academic Index score by multiplying by 2.23. Since the maximum score of the ACT is 36:

36 X 2.23 = 80 (ish)

GPA is more important than ever today because so many schools have done away with true academic rankings. If you calculate your GPA unweighted that can also be a disadvantage if the student takes several honors or AP classes. The unweighted GPA is measured on a 4.0 scale and doesn’t take into account more rigorous classes.

It is important that your students know where they rank and the best criteria to give them the highest CPS. If they don’t the school might assign a rank and that could leave them at a disadvantage.

The AI score range is from 60 to 240. Most institutions then convert this score on a scale from 1 to 9 or 1 to 5. Sometimes 1 is the best and sometimes 9 is the best. This just depends on the college and you should look into the ranking system at each school.

School officials will state that the Academic Index is not the end all be all of gaining acceptance. It’s an important screening tool, though. The fact is for a scale of 1 to 9 with 9 being the best, a lot more 8’s and 9’s get admitted than 4’s and 5’s.


What does this mean financially?

Test expenses add up. If you have multiple children (say 5 like I do) it can be a significant expense. As we talked about in 160 Strategies to Conquer College Costs, going to college is expensive. The numerous hoops our students have to jump through before even entering college are expensive and time consuming. 

When you combine the costs of the SAT I, at least two SAT subject exams and all the application costs, we need to have a financial game plan. These are the 2017-2018 expenses. 

Financial Implications of the Academic Index

First, make sure the schools that require these tests are within your family budget. If your student has her heart set on becoming a Yalie or a Quaker then learning about theses tests and school requirements at the last minute could shatter some dreams.

You should look at the subjects your student is interested in and the tests associated with those subjects. This will help you better prepare to have all the necessary requirements satisfied before applications go out.

Cost Example

Say you have three children. Each one takes the SAT I with writing twice, ACT with writing twice, three SAT subject exams and they want those tests reported to 10 different schools. 

That adds up to $1,371 if all three students were taking the tests this year. Testing fees tend to rise from year to year. 

I know it’s not a crippling expense there are better uses of the money than wastefully taking tests that your students may or may not use depending on the school. Have a plan. 

Knowing your student’s academic index number could also help you make tough decisions. The best decision could be to forgo applying to a school that is very unlikely to accept him and only run-up needless additional expenses. 

For more information and an example of an inside look at the Ivy League application process, I’ve seen this book recommended several times.

A Is for Admission: The Insider’s Guide to Getting into the Ivy League and Other Top Colleges

I’m currently looking into the schools my oldest son wants to attend. We are looking at the application costs and testing cost. We haven’t completely decided what course we will take but factors like the AI and testing fees will be part of the analysis when it comes to finding the right fit for him.

If you need help tracking all your accounts, there is a great application that is completely free. It’s called Personal Capital. With Personal Capital you can track all your checking, saving, mortgage, investment and retirement account all in one place. I used Personal Capital and find it to be the best way to keep all my financial accounts straight. Try it our free today.


Have you looked into the Academic Index? Will it factor into your student’s school choice?

Tom is a doctor, husband and father of five with a passion for parenting and finance. When he isn't skateboarding, riding BMX, or jumping on the trampoline with his kids, he is reading and writing about personal finance. He helps high income parents educate and mentor their kids to become financially, emotionally, and intellectually self sufficient.

10 Responses to “The Financial Implications of the Academic Index

  • This is really interesting. I had no idea that this Academic Index even existed, never mind how important it can be! Thanks for sharing!

    • Thanks Matt. It’s always hard to balance education and jumping through the hoops that our higher education institutions create. It’s good to know the rules before we play the game. Thanks for stopping by.

      Tom @ HIP

  • I remember reading A is for Admission back when I was in high school. With test prep so ubiquitous in elite college admissions, it seems like it’s more about the extracurricular activities and other non-academic factors that helps them decide between the thousands of applicants who all have high SATs and GPAs.

    • I agree that once a prospective student gets to that level the other factors come into play. The trick is getting pass the screening criteria.
      If I recall that book spoke about a student from a wealthy family getting a job to show he is willing to work and try different things. I didn’t come from a wealthy family and working was just part of life That advice made me chuckle a bit but I guess it’s good advice if you’re not used to working.

      Tom @ HIP

  • Learn something new everyday. Never heard of academic index or subject specific SAT. I’m only 30 but I’m feeling pretty old right now.

    Thanks for sharing this. Mine is 9 months so who knows how many tests she will have to take.

    • Great now I feel old. I’m 40. 🙂
      You have a few more years before you have to worry about it the AI thankfully.
      I would be surprised if the university education system hasn’t changed greatly in the next 15-20 years. Education expenses are out of hand and unsustainable in my opinion.
      For now, we need to know the rules if we want to get into upper echelon schools.

      Tom @ HIP

  • Dang, no wonder why some parents stress! I’ve been thinking about this topic a lot lately due to the little one, and I do have a post called, “What If You Go To Harvard And End Up A Nobody?” Surely it will piss a lot of people off.

    I’m going vagabond bohemian and feel college is unnecessary! Everything online is free!


    • The only thing expensive universities still have a monopoly on is accreditation. If they lose that education will be a lot cheaper.
      I would love to see career fields develop tests and allow people to take them without any degree requirements. Kinda like Frank Abagnale at age 19 who passed the Louisiana state bar without Law school, we could bypass a lot of waste of time and bureaucracy.

      Tom @ HIP

  • That was a very interesting read and I had no idea that the index even existed! Great thing to know going forward.

    My personal opinion is that enrollment in traditional, four-year colleges will continue to decline, especially at the lowest tier universities. Although top tier universities may not be affected at first I think it will eventually impact them as more students will opt to go directly to highly concentrated programs, such as Galvanize in the tech industry.

    • I agree with you on enrollment. I think more and more people are realizing a college degree isn’t the end all be all especially if it results in six figure debt. Once accreditation isn’t controlled by the universities there will be no reason to pay their exorbitant fees. I don’t know the timeline but I suspect it will be a gradual decline unless all of a sudden student loans are severely restricted.

      Tom @ HIP

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