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 4,000 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 454 workers and generates $224 million annually. A typical junior or community college employs about 250 workers and generates $43 million annually.

    • The US has 3,982 colleges and universities which employ over 1.5 million workers and generate about $658 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

                                  Mar 18, 2023 - More Students Turn To Apprenticeships
                                  • 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.
                                  • Many rural colleges and universities are reducing budgets as enrollment numbers decrease, according to Texas Public Radio. Humanities programs like history and English are often the first to be cut. Some students are being forced to consider transferring to other schools or leaving higher education altogether. The proportion of high school graduates going on to college is declining. The principal reason for this, according to Jon Marcus, who covers the erosion of funding at rural universities for The Hechinger Report, is a growing public skepticism about the financial return on a college education. That sentiment is more extreme if you look at survey data in rural areas, especially among men in rural areas, Marcus said.
                                  • The US Supreme Court agreed to hear arguments about President Biden's student loan relief program in February. The rollout of debt cancellation will remain blocked until then. The loan forgiveness program includes up to $20,000 in loan relief for low- and middle-income borrowers. The Biden administration had petitioned the court to allow the program to move forward while various legal challenges were considered in the lower courts. The US Eighth Circuit Court of Appeals had blocked the loan forgiveness program from taking effect anywhere in the country. The debt forgiveness plan also extended the pandemic-related student debt payment freeze until the end of 2022. Borrowers who hold loans with the US Department of Education and make less than $125,000 a year are eligible for up to $20,000 in student loan forgiveness if they obtained Pell Grants. Individuals who make less than $125,000 a year but did not receive Pell Grants are eligible for up to $10,000 in loan forgiveness. Most student loan borrowers owe less than $25,000 on their loans as of May 2022, according to the Federal Reserve. The canceled student debt would be federally tax-exempt, as seen in other federal student debt forgiveness programs.
                                  • Industry consolidation is accelerating as students continue to pack into flagship universities and brand-name colleges while less-prestigious schools struggle. About 200 colleges closed in the past 10 years, four times more than during the previous decade, according to data compiled by the consulting group EY Parthenon. There have been 95 college mergers in the past four years, compared with 78 over the prior 18 years. Experts cite rising costs for college and uneven return on investment, which has diminished public confidence in higher education, opened the door to competitors, and led to falling enrollment.
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