December 3rd, 2001

Name, Please: Surveyor Quietly Sells Student Information to Youth Marketer

By Daniel Golden
Wall Street Journal

Each year, more than one million U.S. high-school students take time out of
their school day to fill out a survey asking their names, addresses, grade-point
averages, races, religions and social views. The organization that sponsors
the survey, the National Research Center for College and University Admissions,
tells the schools it will broaden students’ higher-education options by distributing
their names and profiles to hundreds of colleges and universities across the
country.

But colleges aren’t the only recipients of the survey results. Generally unknown
to high schools, colleges, students and their parents, National Research for
at least a decade has also sold the personal information it gathers to the country’s
leading supplier of young people’s names to commercial marketers, American Student
List LLC.

American Student List pays for the information by helping to fund the National
Research survey. American Student List then sells student names and other information
to companies that solicit students for a wide array of goods and services. Companies
that buy student names from American Student List include shaving giant Gillette
Co.; credit-card purveyors American Express Co. and Capital One Financial Corp.;
Kaplan Inc., the Washington Post Co. unit that is the largest admissions test-coaching
chain; Primedia Inc.’s Seventeen Magazine; and Columbia House Record Club, which
is owned by AOL Time Warner Inc. and Sony Corp.

From its base in Lee’s Summit, Mo., National Research—a little-known company
with just 30 employees—has become a hugely influential force in a burgeoning
industry surrounding college admissions in which companies and colleges buy
names and detailed information about young people. Publicly presenting itself
as a service to students and colleges, National Research doesn’t readily disclose
its role in helping commercial marketers pitch their products to an impressionable
and highly valued audience.

Marketers obtain teenagers’ names and addresses from many other sources, such
as magazine-subscription lists and Web sites. What distinguishes National Research
is that it gathers student names in a classroom survey that many school officials
believe will be made available only to educational institutions, but which then
is sold to commercial marketers.

National Research has also made its presence widely felt as it competes with
the influential College Board to sell student information to colleges and as
it lobbies Congress to kill legislation that would restrict collection of some
student information.

Many teachers and educational officials express anger and disbelief when told
that National Research sells student names to commercial marketers. "It’s
so disgusting," says Barbara Henry, admissions director at Oglethorpe University
in Atlanta, which buys student information from National Research. "Everybody’s
upset when their children are solicited" without parental approval.

Richard Bischoff, associate director of admissions at the University of Chicago,
another National Research customer, says he also was in the dark. "To the
best of my knowledge, any service we buy names from does not sell into commercial
markets," he says. "That’s certainly something we would care about."

Steven Danloe, who gave the survey to social-studies students for 15 years
at Baboquivari High School in Topowa, Ariz., before leaving teaching this year,
says if he had known about the commercial sales, he "would have thrown
the surveys in the trash."

National Research’s president, Don M. Munce, says it has never hidden its commercial
ties from high schools or colleges who inquire about them. But few do.

Its survey includes a "privacy statement" explaining that responses
are "used by colleges, universities and other organizations to assist students
and their families." Mr. Munce says referring to "other organizations"
is sufficient disclosure of National Research’s commercial ties. He adds that
the privacy statement was designed to be brief because "teachers are very
busy."

Mr. Munce says he is confident that American Student List sells only to reputable
marketers. American Student List’s president, Donald Damore, confirms that his
company aims to limit its sales to legitimate marketers. He says it monitors
its customers by reviewing samples of their marketing material.

But Mr. Damore acknowledges American Student List has at times supplied student
names gleaned from the National Research survey to college-aid consultants targeted
by the Federal Trade Commission for fraud.

The only other company to which National Research directly sells student information
is the publisher of "Who’s Who Among American High School Students,"
Mr. Munce says. Who’s Who uses the information to cull entries for the book
and then sells copies to students for $45 apiece.

As a 14-year-old sophomore in 1999, Rotem Ben-Ad filled out the National Research
survey, administered by her guidance counselor during a school assembly at her
Jewish day school in Irvine, Calif. Rotem hoped to showcase herself to East
Coast colleges. She then received solicitations from test-preparation companies,
financial-aid consultants, the high-school Who’s Who and other marketers.

"I was like, `How did they get my name?’ " she says. "I didn’t
know what was legitimate and what wasn’t."

As colleges step up their competition for promising students, National Research
has become the leading private-sector rival of the College Board in offering
colleges information on high schoolers. A nonprofit organization based in New
York, the College Board sponsors the SAT college-admissions test. ACT Inc.,
a smaller nonprofit in Iowa City, Iowa, sponsors the competing ACT exam. Both
the College Board and ACT Inc. gather information from students based on questionnaires
filled out during registration for tests.

The two nonprofits sell the information and test scores to colleges but not
to commercial marketers. They also tell students how information gathered from
test-registration questionnaires will be used and give them the choice of not
answering survey questions or not having their names sent to colleges.

The College Board makes about 65 million name sales a year. It charges colleges
a $185 "participation fee" each time they order a batch of names,
plus a per-name fee of 24 cents. Mr. Munce declines to say how many name sales
National Research makes a year. People in the student-marketing industry estimate
the total may approach half of the College Board’s.

College admissions officers say that National Research’s competition has forced
the College Board to try more-aggressive marketing tactics. National Research
mailings prod high schools to survey freshmen and sophomores, for example, "so
you can get a jump-start on reaching them." It also does its testing at
the beginning of the year, meaning it can send its survey results to colleges
as much as three months sooner than the College Board. Trying to catch up, the
College Board says it intends next year for the first time to sell names of
freshman takers of the PSAT, a warm-up to the SAT. It also intends to introduce
a "search on demand" feature enabling colleges to buy student names
year-round.

National Research was started in 1972 by James Kunz, a former admissions director
at now-defunct Tarkio College in Tarkio, Mo. Mr. Kunz, who has left the organization,
wanted to help small Midwestern colleges with recruiting, Mr. Munce says.

National Research today charges colleges an annual membership fee of $250,
plus a fee of 24 cents for the use of each student name for a year. Colleges
typically order computer searches for one or more categories of students—
the Massachusetts Institute of Technology, for example, buys names of minority
and female high-school freshmen with A averages and an interest in engineering
—at a total price of thousands of dollars per search.

American Student List pays National Research about $800,000 a year to help
underwrite the survey’s annual cost of more than $2 million, according to Mr.
Damore of American Student List. Mr. Munce won’t confirm the dollar figures.
But he says that funds from his two commercial customers represent less than
10% of National Research’s total revenue, the rest of which comes from educational
institutions. Who’s Who declines to comment on what it pays for the survey names.

National Research’s solicitations to colleges state that "member dues
cover the cost" of the survey. Asked about the statement, Mr. Munce says
it is erroneous.

National Research distributes more than 100 million surveys each year to 18,000
participating high schools—three-fourths of the national total—expecting
1% or 2% of the surveys to be returned, Mr. Munce says. It has a database of
four million students, including a majority of college-bound students, he adds.

National Research has a clever tactic to reach this coveted market: It ships
surveys directly to teachers and guidance counselors, rather than to principals
or superintendents. This approach makes some districts wary. Gwinnett County,
Georgia’s largest school district, bans the survey because National Research
doesn’t seek approval from the district’s own research department.

Mr. Munce says National Research sometimes contacts school districts and has
occasionally mailed forms to principals. But principals typically forward them
to guidance counselors anyway, he says.

High-school teachers and guidance counselors administer the survey, without
extra pay, during school hours. Most say they hope to improve students’ higher-education
prospects. "We’re so rural that a great many colleges can’t afford to send
someone," says Kelly Palmer, a guidance counselor at Troy High School in
Troy, Mont. He has handed out the survey for the past six years. "It provides
our kids good exposure," he says. Mr. Palmer didn’t know about National
Research’s commercialization of student information but says it won’t cause
him to drop the survey.

Nearly a thousand colleges—including the University of Miami, Boston University,
Tulane University and many lesser-known schools—are survey customers. "We
feel like we need to get our name in front of students early to build recognition,"
says Ms. Henry, the admissions director at Atlanta’s Oglethorpe University.
Her school has bought the names of freshmen and sophomores from National Research
but will reconsider the relationship now that she knows about the organization’s
commercial ties.

Relying partly on its loyal college and university customers, National Research
has tried to block legislative restrictions on its activities. One target: an
amendment to the main federal education bill, now pending before a congressional
conference committee, which would require parental consent for collecting information
from students for commercial purposes. The measure, backed by a bipartisan coalition
opposed to commercialization in schools, wasn’t specifically aimed at National
Research but could sharply limit its commercial activities.

At Mr. Munce’s request, Paula Tacke, admissions director at the University
of South Dakota, wrote to Senate Majority Leader Thomas Daschle, a South Dakota
Democrat, in June, expressing "serious opposition" to the bill. Mr.
Daschle’s office responded, acknowledging her concern.

Ms. Tacke says National Research assured her that survey information is used
only for educational purposes and that National Research opposes the amendment
because it might discourage college recruiting. Mr. Munce separately says National
Research’s opposition reflects only this interest in protecting recruiting as
well as such activities as fund raising for high-school proms.

National Research’s survey includes language describing the organization as
a nonprofit, and it is registered as such with the secretary of state’s office
in Missouri. But the organization hasn’t sought exemption from federal or state
taxes because it doesn’t collect charitable contributions, Mr. Munce says.

As for profits, he says, "some years we have a surplus, and some years
we don’t." He says there was a surplus in 2000, but he won’t be more specific.

National Research’s success has drawn new competition. In 1999, a second survey,
distributed by Educational Research Center of America Inc., began arriving at
high schools. Educational Research, established by a commercial-list company
in Lynbrook, N.Y., sells colleges student names for 20 cents apiece, making
it the low-price supplier.

National Research sued Educational Research in 1999 in U.S. District Court
in Kansas City, Mo., for copyright and trademark infringement. In its defense,
Educational Research contended in court papers that National Research had no
right to accuse it of breaking laws, because the plaintiff itself had "intentionally
deceived" students and educators. National Research "does not disclose
to teachers that the information being collected from students will be made
available to thousands of companies that want to sell those students everything
from credit cards, cars, clothes and sporting equipment to formal wear and photographs,"
Educational Research alleged.

National Research, in its own court papers, called the allegations "irrelevant,
misdirected and totally unsupported." It dropped its suit in 2000, after
a judge rejected its request for an injunction blocking Educational Research
from using similar methods to survey students.

Federal law prohibits "unfair or deceptive acts or practices" that
affect commerce. The FTC, which enforces this law, declines to comment on National
Research.

During the court case, National Research identified 40 teachers who had contacted
it because they were confused when they received the new rival survey. Through
their involvement in the case, some of these teachers learned that National
Research had been selling student names to American Student List, which sold
them to marketers. Some teachers were displeased.

Stanley Holliday, a social-studies teacher at North Central High School in
Indianapolis, promptly stopped giving the survey in 1999. Susan Corbosiero,
a math teacher at Westborough High School, outside Boston, dropped it the same
year. She says she feared she could be held legally liable if student names
weren’t handled confidentially. Lydia Beehler, a guidance counselor at Angola
High School in Angola, Ind., also discontinued the survey in 1999.

The legal feuding and unease among some educators so far doesn’t seem to have
diminished the value of National Research’s student-name list in the teen-marketing
world. "The database is priceless," said Mr. Damore of American Student
List in an affidavit filed in a separate 1999 lawsuit. The suit—since settled
—was brought by American Student List against a former employee in U.S. District
Court in Uniondale, N.Y.

American Student List, based in Mineola, N.Y., has one of the biggest names
in youth marketing. It has its own list of nine million high-school students,
drawn from National Research and such sources as teen-magazine subscriber lists,
youngsters’ responses to commercial offers on the Internet, and, until federal
law banned the practice last year, state automobile-registration records. Last
year, American Student List was acquired by Havas Advertising SA, a French advertising
agency.

Dow Jones & Co., which publishes The Wall Street Journal, also buys student
names from American Student List to market its publications to college students.

Most students included in the high-school Who’s Who are nominated by teachers
or civic organizations, as the company states in its promotional literature.
But many aren’t nominated at all. Instead, Who’s Who takes their names from
the National Research survey if they report a "B" average or higher.
Paul Krouse, founder of the book’s publisher, Educational Communications Inc.,
acknowledges it doesn’t tell students it obtained their names from a marketing
survey.

In "standards and guidelines" it distributes to high schools, Who’s
Who says that "under no circumstances" will it accept nominations
from "standard commercial lists." Mr. Krouse, now a consultant to
Commemorative Brands Inc., a manufacturer of class rings that in April purchased
Educational Communications, says the statement is accurate because National
Research ought to be considered an educational organization, despite its commercial
ties.

The high-school Who’s Who is unrelated to "Who’s Who in America,"
published by a unit of Reed Elsevier PLC.

Wheaton Academy, a Christian high school in West Chicago, Ill., doesn’t nominate
students for Who’s Who because guidance counselor Daniel Crabtree believes that
colleges don’t regard listing as a credential for admission. Nevertheless, because
Mr. Crabtree administers the National Research survey to sophomores and juniors,
about 10% of students there receive Who’s Who solicitations annually. David
Fiore, chief executive of Commemorative Brands, owner of Who’s Who, says the
nomination of one of these students, Paul Zeigler, came from the survey and
from an "alternative source" he declined to identify.

"I thought I was nominated by a teacher who liked me," says Mr. Zeigler,
a junior who took the survey last year. If it was just a survey, "that’s
crushing," he says.

 

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