GMAT Percentiles Update

by Stacey Koprince Jul 22, 2013

Last week, GMAC updated its percentiles for GMAT scores. The organization does this once a year to smooth out any differences in the testing pool.

What do I mean by “differences?” The demographics of the people taking the exam change over time. In particular, over the last ten years or so, GMAC has seen a huge increase in the number of non-United-States-based students taking the test. A majority of these students speak English as a second (or third!) language; a majority also have a better grounding in quantitative skills than the average U.S.-educated student. These differences lead to changes in the data over time.

Scaled Scores vs. Percentiles

GMAT results are reported using various “scaled scores.” We receive a 2-digit score for quant, a separate 2-digit score for verbal, a Q+V-combined 3-digit score, and two more separate scores for the essay and IR sections.

Think of these scaled scores as “skill levels.” They reflect a specific, measurable level of ability. Here’s the interesting thing: the skills needed to reach a certain level do not change over time. A quant score of 45 today reflects the same skill level as a quant score of 45 earned ten or even twenty years ago.

What does change over time is the percentile ranking associated with that score. A percentile ranking reflects how much better you did than a certain percentage of the test-taking population. For example, if you score in the 75^th percentile, then you scored better than 75% of the people taking the test—not just that day, or that week, but for the past couple of years (or whatever timeframe is designated for that test).

Imagine that you give a math test to a bunch of 10-year-olds. The scoring algorithm is very simple: if you get a question right, you get one point. You then gather all of the scores and figure out percentile rankings for that group. Let’s say that a certain score (let’s call it 5) represents the 50^th percentile. A student who scores 5 earned a better score than 50% of her peers.

Then you take that exact test and give it to a bunch of 14-year-olds. They’re a lot better at math. The same score of 5 might represent only the 25^th percentile for this new group, because more of these students have better math skills and can answer more questions correctly. A score of 5 still means the same thing (in this case, 5 questions right), but the pool of testers has changed and so the percentile rankings change too.

This is essentially what happens with the GMAT over time as well. If more people who are good at math start taking the test, then that score of 45 (which represents a certain, fixed level of skill) will drop in the percentile rankings because more people will be capable of performing at that level or higher.

We’ve seen especially big demographic changes on the GMAT over the last 5 to 10 years. In 2006, a quant score of 45 was rated the 78^th percentile. Someone scoring at that level had better quant skills than 78% of the people taking the exam around that time.

Today, that same skill level of 45 rates the 66^th percentile. This does not mean that someone scoring a 45 today is worse at math than someone with the same score in 2006; rather, the two students are equally good. Instead, a greater percentage of the population taking the test today has stronger math skills.

You might be thinking: oh, great. So that means I have to do even better at math. Actually, the opposite is (sort of) true. Keep reading.

This Year’s Trends

In this year’s update, most of the quant percentiles associated with specific scaled scores have gone down, often by 2 or 3 percentile points since the last update in July of 2012. This reflects the growing proportion of test takers with stronger math skills than in the past.

The verbal percentiles have mostly stayed the same or actually gone up by 1 percentile point. This again makes sense: a greater number of non-native English speakers are taking the exam. The essay score percentiles also went up a little bit for this same reason.

One of the most interesting data points is really just psychological. The top quant score of 51 is now the 97^th percentile and the next possible score, 50, is the 89^th percentile. In other words, the only way to score in the 90^th+ percentile on quant now is to earn the top score of 51.

Did I just cause your heart to start racing? There’s no margin for error! You have to get a perfect score on the quant!

No, I promise, you don’t. : ) The business schools are well aware of these changes and they are actually adjusting accordingly. In 2006, the skills associated with a quant score of 45 were strong enough for any business school. The same is true today, even though that same score reflects a lower percentile ranking. You can still do the work and the schools do know this.

What about the 80/80?

Everyone seems to “know” that the top schools want to see 80^th percentiles in both quant and verbal. I’ve heard this many times myself. I looked for a primary source (a business school admissions director who said this on record) but couldn’t find anything. So I started asking questions. I called up Jeremy Shinewald, founder of the admissions consulting company MBA Mission, who told me:

“Our feeling is that the 80/80 threshold is becoming less and less important, as the percentiles spread. The percentiles might move gradually over time, but the raw scores maintain their meaning year after year. Because a specific raw score represents a level of ability that has been “studied” by the schools, the schools can back-test data, look at a candidate’s scores, and predict how he/she will do in their program.”

Jeremy also spoke recently with an admissions director from a top-10 business school (who wanted to remain anonymous). This director said:

“We tell candidates that if they can get to the 60^th percentile or above, that will serve them well.  We have taken people whose percentiles are lower, but ideally you’d want to be at or above 60^th percentile.”

There are no typos—the quote is from a top-ten director and this person quoted sixtieth percentile as the threshold in each section.

MBA Mission also spoke with Amanda Carlson, Assistant Dean of Admissions at Columbia Business School. When asked about the 80/80 “rule,” Ms. Carlson said:

“That is not accurate and not the way we do things. People do not have to have this 80/80 type of a breakdown to be admitted. I can’t be emphatic about that enough.”

 But I know someone who scored 710 and didn’t get accepted!

This is quite common, actually. The top schools each admit a few hundred students every year. Worldwide, something like 20,000 testers earn scores in the 700s each year. The math isn’t hard: lots of people with great scores will be rejected.

Your GMAT score is only one part of your entire application, and other parts are even more important than your score. We obsess over GMAT scores because it is one of the few things that we still have some control over; much of the rest of our application package reflects things that are already over and done. As a result, we our GMAT scores begin to take on outsize importance in our minds.

Yes, it is true that Stanford’s GSB Class of 2012 has a median GMAT score of 730. The range of scores for admitted students, though, was 580 to 790.

Two things: if your profile is that outstanding, your GMAT score almost doesn’t matter—a 580 or 630 will do it for you, even at Stanford. If your profile is not that amazing, well, hmm, let’s do some math…

One percent of testers each year score 760+ (99^th percentile) on the GMAT. According to GMAC, in 2012, the GMAT was given 286,529 times. Some number of those tests represented repeats; in fact, GMAC said  that approximately 1/5 of those tests were administered to people who had taken the exam at least once before.

If that’s the case, then approximately 229,000 of those people are first-time test takers. Let’s concentrate just on these folks. (We’re being conservative here, as most repeat test takers have not scored in the 99^th percentile and those of us who do so repeatedly usually aren’t applying to b-school.) By definition, the 99^th percentile testers comprise 1% of the testing pool. Just from this subset of first-time testers, and in 2012 alone, about 2,300 people scored in the 99^th percentile (or 760+) on the GMAT.

GMAT scores are good for 5 years, so let’s assume that something like 3 out of every 5 testers are actively in the application game in a given year. That gives us something like 6,900 99^th-percentile testers who might have applied to Stanford for the class of 2012.

Stanford admitted 389 people. 7,204 applied. How many 99^th percentile testers do you think they rejected? Hundreds, at a minimum!

The bad news: Scores alone are not going to change everything for you, as evidenced by the thousands of 99^th-percentile applicants who are rejected from top schools each year. The obsession with GMAT scores is causing enormous stress for not-very-good reasons.

The good news: don’t drive yourself crazy trying to beat this test. Thousands of people who score very well on the GMAT are not admitted to the top-10 schools. Are these people all destined to be unsuccessful and fail in life? Of course not.

Getting into a top-10 b-school is not the only way to be happy, successful, and fulfilled in life. Do take your chances; go ahead and apply! Recognize the odds for what they are, though: a crap shoot. (Synonyms: gamble, speculation, shot in the dark…) A school like Stanford could fill its roster 4 or 5 times over (at least!) with astoundingly qualified candidates who would do very well at the school and during the careers.

Nobody on the planet can assume that they’re going to get into this kind of school. Apply to more reasonable schools as well. Plenty of people have done amazing things with a non-top-10 MBA— or without any MBA at all.

If you’re one of the lucky ones who gets in, have a great time, learn a lot, and remember that there are lots of other smart, successful people in the world who didn’t go to your school. : )