The goal of using pseudowords is to measure students’ understanding of sound-symbol correspondences. If students are presented with words that they may have seen before, it is difficult to measure if their success in reading the words is because they understand how letters and sounds go together or whether they can read the word because they have seen it before.
You are absolutely correct that is difficult for students to read pseudowords because they do not match words in their lexicon (listening and speaking vocabulary). An interesting way to help students become comfortable with reading pseudowords is to present four pseudowords. The decoding of three words will not result in a word that sounds like a word they know. One word, although not spelled correctly, will sound like a familiar word; for example, blemp, kaik, gost, mep. The second word sounds like “cake.” The other words do not match words the students know. You would confirm that the spelling “k-a-i-k” is not the standard spelling of “cake,” but those letters do represent a familiar word. You are not teaching students how to read pseudowords per se. You are teaching them how to use their knowledge of sounds and letters to read unfamiliar words.
Suzanne Carreker, Vice President of Programs and Research, Neuhaus Education Center