ETS Is Selling Its Crown Jewels and Buying Into a New Market. What Does That Tell Us?

Key Takeaways

• GRE/TOEFL test volume fell ~50% since 2018
• ETS may sell GRE and TOEFL businesses amid softening demand
• New Khan TED Institute targets competency‑based bachelor’s degree under $10k
• Pearson’s Credly platform already issued 100 million digital credentials
• Lack of employer hiring commitments limits immediate impact of KTI

Pulse Analysis

ETS’s announcement comes as its flagship testing products, the GRE and TOEFL, have seen a dramatic decline in demand. Test‑takers dropped from 532,826 in 2018‑19 to just 256,215 in 2023‑24, a roughly 50% contraction driven by the rise of test‑optional admissions. Facing a shrinking revenue base, ETS is reportedly weighing the sale of these legacy businesses while simultaneously positioning itself as a provider of verified competency data through the Khan TED Institute. This strategic pivot reflects a broader industry shift from seat‑time education to mastery‑based outcomes.

The competency‑verification market is already crowded, with Pearson’s 2022 acquisition of Credly creating a dominant digital badging ecosystem. Credly has issued more than 100 million credentials and powers ACT’s WorkKeys and National Career Readiness Certificate programs. These incumbents offer end‑to‑end solutions—assessment, learning integration, credential issuance, and labor‑market analytics—under the DEEP framework. ETS’s entry, therefore, is a late‑stage move into a space where the infrastructure, employer integrations, and data pipelines are firmly established, raising questions about its ability to gain traction without a comparable ecosystem.

For assessment and credentialing vendors, the key signals to watch are ETS’s progress on building employer‑backed credential pathways, the timeline for regional accreditation of the Khan TED Institute, and any concrete hiring commitments from its corporate partners. Until ETS can demonstrate that its competency signals are recognized in hiring tools and job postings, its impact will remain peripheral. Vendors that already have deep employer relationships and accredited credential stacks may continue to dominate, while ETS must either forge rapid partnerships or differentiate its verification model to compete effectively.