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ACT is phasing out Compass, a popular but controversial college placement test that colleges use to determine whether students need to take remedial courses.

Community colleges and nonselective four-year institutions rely heavily on Compass and Accuplacer, a similar test from the College Board. Both assessments are low-cost, computerized and relatively quick ways of assessing students’ abilities in reading, writing and mathematics.

A 2012 study found that only one in five colleges use high school grades, class rank or any other criteria besides high-stakes standardized tests to decide whether students have remedial needs in mathematics. That number was only 13 percent for remedial English placement. And when students place into remediation, few ever make it to college-level courses, much less to graduation.

Yet the Community College Research Center at Columbia University’s Teachers College in 2012 found that up to a third of students who placed into remedial classes due to their Compass or Accuplacer scores could have passed college-level classes with a grade of B or better.

That highly publicized research helped encourage some open-access colleges to begin using multiple measures to determine placement. Long Beach City College, for example, started incorporating high-school grades. More students at Long Beach began passing college-level courses as a result.

In the meantime, ACT saw a steep decline in Compass test takers.

Roughly 2.2 million students took the assessment in 2012. That number dipped to 1.9 million in 2013, and to 1.7 million last year, said Ed Colby, a spokesman for the nonprofit testing giant.

“A thorough analysis of customer feedback, empirical evidence and postsecondary trends led us to conclude that ACT Compass is not contributing as effectively to student placement and success as it had in the past,” ACT said in an email last week to Compass users.

All versions of Compass, which was first created in 1983, will be eliminated by the end of next year, according to ACT.

The test’s limitations in measuring college readiness were a factor in the decision, Colby said in an interview. For example, many adult students who place into remedial courses with Compass might be able to thrive in college-level courses after taking a brief refresher on academic material that they haven’t seen for a while.

“We really believe that the solution has to be multidimensional,” he said, adding that noncognitive skills should factor into placement. “The tests themselves weren’t as effective at determining readiness as we would like.”

ACT is looking at “alternative solutions,” Colby said, and would release an update in coming weeks. “Our decision was to end Compass and to try something new,” he said.

The College Board did not return a request for comment on its Accuplacer test.

Judith Scott-Clayton is an assistant professor of economics and education at Teachers College. She wrote the two influential studies on the predictive limitations of Compass and Accuplacer.

“It’s a brave decision,” Scott-Clayton said of ACT’s move. “There’s clearly continuing demand for these placement tests.”

The placement assessments have value when they are used with other measures, such as high school grades, said Scott-Clayton. But in practice, most colleges just use the tests.

Some colleges may have to scramble to find a replacement for Compass. But California’s 112 community colleges are working on a homegrown placement system.

Begun last year with $8 million in state funding, the Common Assessment Initiative seeks to create a centralized placement platform, which will factor in multiple measures -- meaning more than just standardized tests.

ACT acknowledged that the demise of Compass could create some hassles for colleges.

“This decision was not an easy one, given the considerable number of students and institutions served by the ACT Compass program each year,” the testing organization said in its email to Compass users. “ACT remains deeply committed to the education and workplace success of all individuals, as we continue to explore new ways in which we can best meet the needs of postsecondary students and the institutions who serve them.”

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