As a small, local test-prep company, one of my business strategies is to be a price leader.  To take a GRE class at a major test-prep company like Kaplan, Princeton Review, Manhattan, or Blueprint, you can expect to pay anywhere from $900 to $1,800.  You can take an equivalent class at Nth Degree for $600, including the book and handouts.

I know what you’re thinking.  Test prep is important to you, and you don’t want to choose your service based strictly on the cheapest price tag!  Good point.  Let me explain and justify the difference.

The big difference between Nth Degree and a major test-prep company is size.  Nth Degree is a one-man operation.  I, Scot, am the business owner and the tutor.  I am hiring my time out directly to you.  Even if I get only three students, I earn $100 / hr — quite nice!  With ten students, my income grows to $300 / hr.  That gives me every incentive to do a great job, because more students = more income for myself.  Because I can only afford so much rent, I can only accommodate ten students.  That’s good for you, because it guarantees small classes and individualized attention.

The other test-prep companies are agencies.  They have to cover the costs of management and operation expenses on top of the instructors.  Giants like Kaplan are mammoth national-scale corporations that spend millions upon millions of dollars in advertising and rents.  Their CEOs rake in huge salaries.  That explains why you would expect to pay them much more than me — it’s a measure of scale, not quality.  In fact, they like to pack you into large classes, the larger the better for their bottom line.  Would you rather study in a lecture hall or in a small seminar where you know everyone’s name and you can engage in deep analysis directly with the instructor?

At a test-prep agency, almost none of your tuition dollar goes toward hiring quality instruction.  As backward as it seems, agencies think of their instructors as costs that are to be minimized, rather than investments to help their business grow.  I have submitted applications to work for some agencies, but it is clear that they prefer entry-level tutors who will work for less.   Princeton Review offered me $15 / hr!  Even if I had gained a reputation for excellence and attracted dozens of students to their classes, I would not have earned one more dime.  Your instructors at the agencies are going to be a rapidly-revolving roster of graduate students who did well on their exams and now have this part-time job.  They are not going to be trained or experienced instructors.  By contrast, I am a professional educator with two decades of experience and a history of positive reviews.

Another issue is test questions and proprietary material.  Let’s say you are studying for the GRE.  The ETS, which writes the exam, publishes an official book of its test questions, and that’s what we use.  When you buy your book as part of my course, your money goes to ETS.  Major test-prep companies don’t like that.  They prefer to write their own proprietary test banks, because they sell them for profit.  That’s good for them, but it doesn’t give you the chance to practice with actual test questions!

So there you have it.  Nth Degree is your least expensive option because your tuition money is only going to one person, the one who is teaching you.  To compete with major agencies, I have no choice but to offer the best quality and the lowest price.

Hope to see you in class soon!

Scot

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