Colleges & Universities

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,900 colleges and universities in the US provide post-secondary education and award degrees to students who have developed expertise in a specific field of study. Colleges and universities include public, private non-profit, and for-profit institutions.

Tuition Increases Jeopardize Affordability

College tuition continues to grow faster than inflation and family income, making higher education less affordable.

Volatility in Government Funding

During tough economic times, state and local governments typically reduce budgets and may cut support for higher education, forcing schools to rely on tuition increases or other sources to fund the shortfall.

Industry size & Structure

A typical four-year college employs about 458 workers and generates $231 million annually. A typical junior or community college employs about 217 workers and generates $43 million annually.

    • The US has 3,931 colleges and universities which employ over 927,000 workers and generate about $665 billion annually.
    • Colleges and universities include public, private nonprofit, and for-profit institutions.
    • While enrollment can vary significantly, public colleges average about 8,900 students while private colleges average about 2,100 students. Large institutions have enrollments of 40,000 students or more.
    • Institutions with the largest enrollments include The University of Phoenix's Online Campus, Arizona State University, Ohio State University, and the University of Central Florida.
                                  Industry Forecast
                                  Colleges & Universities Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  Jan 9, 2024 - Weak Sales Growth Expected
                                  • College and university industry revenue is forecast to grow at a 3.88% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Sources of revenue include tuition and fees; federal, state and local government funding; auxiliary enterprises (dorms, bookstores); endowment income; investment return, gifts and grants; and contracts. Industry employment has rebounded and reached pre-pandemic levels in November 2023.
                                  • Americans’ confidence in higher education decreased to 36% in 2023, sharply lower than in two prior readings in 2015 (57%) and 2018 (48%), according to a Gallup survey. Gallup did not probe for reasons behind the recent drop in confidence, but the polling organization said that the rising costs of postsecondary education likely play a significant role. There is also a growing divide between Republicans’ and Democrats’ confidence in higher education. Previous Gallup polling found that Democrats expressed concern about the costs, while Republicans registered concern about politics in higher education.
                                  • A report from higher education and workforce development nonprofit California Competes identified several concerns among professors, campus staff, and administrators that impede online learning development within the state. Stakeholders question the value of online education due to the lack of consistent and comprehensive metrics to evaluate a program. Stakeholders also question the rigor and learning outcomes of online education, often comparing it to the transition to remote instruction during the COVID-19 pandemic. Stakeholders also disagree about or misunderstand the financial elements of online education, including funding models and developmental costs.
                                  • Some employers are dropping college degree requirements for some jobs due to what they say is a mismatch between the skills employers are seeking and the lessons students are learning in college and university courses, according to The Wall Street Journal. Companies including Google, Delta Air Lines, and IBM have dropped college degree requirements for some positions and are shifting hiring focus to skills and experience. Pennsylvania has cut degree requirements for some state jobs, and Maryland has set a statewide goal of 45% of high-school students starting a registered apprenticeship by 2031. Apprenticeship programs are increasing in both number and variety. College enrollment has declined by about 15% in the past decade while the number of apprentices has increased by more than 50%, according to federal data and Robert Lerman, a labor economist at the Urban Institute and co-founder of Apprenticeships for America.
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