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Regardless of what colleges supposedly should do, and what they do do, there is still the inescapable fact that SAT/ACT test have too low a ceiling, and the colleges are missing a huge amount of information about the academic ability of their applicants, and there is no excuse for them not actively pushing for harder tests.

They have a very good reason for refusing harder tests--it restricts their freedom. The first goal for colleges are self preservation and growth, hence the preference for legacies and athletics, both of which fuel alumni donations. But once self-preservation and growth has been achieved, college believe themselves to be forces for social engineering, helping right what they see as wrong in society.

If the test ceilings are high and clearly student A is superior to student B, then it is hard for the college to refuse student A. But it may turn out that the A group students are highly skewed in some ways, such as socioeconomically, racially, geographically, family structure (two parents vs one), etc. Colleges think, rightly or wrongly, that part of their job is to help those who did grow up in the right circumstances and therefore were unable to achieve the way group A did. Having low ceilings gives them discretion to make these decisions.

Well I certainly suspect that some colleges like the low ceilings for the smokescreen that they provide. But I don't know for sure if it is planned, or if they are just being opportunistic, or if they are not aware of it, or don't believe it.

But then there is also the question of what they do with this smokescreen. I am very skeptical that it is used for social justice, and if anything, the opposite may be true, that they use it to intentionally favor some groups and disfavor others, at the expense of social mobility. An obvious way to do this is, while supposedly being "needs blind", to look for signals of ability to pay, which a lot of extracurricular activities are.