In a move with significant implications for both, Sylvan Learning Systems and the Johns Hopkins University said yesterday that they have formed an alliance to identify and instruct the nation's brightest middle school and high school students.
As part of the deal, Columbia-based Sylvan will become the first company to administer a computerized version of the Scholastic Assessment Test in a pilot program that could eventually lead to a nationwide contract.
After the early-morning announcement, Sylvan stock jumped $2.50 to close at $36.
The partnership of an up-and-coming Maryland company and one of the nation's leading universities could dramatically extend the reach of Hopkins' prestigious program for academically gifted students.
William Durden, executive director of Hopkins' Institute for the Academic Advancement of Youth (IAAY), said the alliance could let the program grow from serving 6,000 students a year to "tens of thousands." Details of the agreement must still be negotiated, he said.
For Sylvan, the alliance opens the door to an entirely new market. Where it was previously identified with remedial tutoring of struggling students, it will now have the opportunity to reach the nation's fastest learners.
At the same time, a parallel agreement with the Educational Testing Service and the College Board could bring Sylvan closer to its goal of winning a contract to computerize the SAT. For a company that is already the leader in the field of computer-based testing, the SAT is the equivalent of the Holy Grail.
Michael Moe, an analyst with Lehman Brothers, said a national SAT contract would be worth "tens of millions" in revenue each year for Sylvan. And he noted that the association with Hopkins "sends a strong message that Sylvan is not just for kids with learning problems."
Under the agreement, Sylvan and the Hopkins institute will jointly develop a curriculum in mathematics and language arts for high achievers. These courses would be offered through Sylvan's chain of learning centers.
Meanwhile, Sylvan's Prometric division will computerize the tests used to evaluate applicants for the Johns Hopkins Talent Search program. One of those is the SAT I Reasoning Test, which the Hopkins program uses to test seventh- and eighth-graders.
Sylvan President Douglas Becker said ETS and the College Board have been interested in computerizing the SAT but that it had been difficult to design a test. Nobody wanted to conduct an experiment on students whose college admission depended on their test scores, he said.
Because the students being tested by Hopkins don't have that at stake, they are a suitable population for evaluating a computerized test, Mr. Becker said.
"We think this is the beginning of a process that ultimately will result in a much broader application of the computerized SAT for college admissions," he said. About 1.8 million students take the SAT each year.
Hopkins officials said the program for gifted students is the oldest and largest of its kind in the country. Mr. Durden said the profit-making program was founded in 1979 with a budget of $46,000, which has since grown to $16 million.
Mr. Durden said he could not estimate how much more the program could grow under the Sylvan alliance, but one aspect of the tentative deal suggests that the impact could be significant.
According to Mr. Durden, the institute's Center for Talented Youth now tests about 60,000 students a year who rank in the top 3 percent of pupils as measured on standardized tests. Students who measure in the top one-half of 1 percent are invited to take part in summer residential programs on college campuses, he said.
With Sylvan, Hopkins plans to design a program that would reach students in the top 15 percent through residential programs and courses taught at Sylvan's more than 600 learning centers in North America.
Sylvan, which had $47 million in sales in 1994, surpassed that amount during the first three quarters of 1995. Its growth has been driven by strong gains in its computerized testing business and tutoring programs.