Colleges & Universities

Industry Profile Report

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

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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 non-profit, 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

                                  Coronavirus Update

                                  Apr 26, 2022 - Enrollment Decreased During Pandemic
                                  • Enrollment at US colleges and universities decreased 3% between the 2019-2020 and 2020-2021 school years, according to debt management firm Student Loan Hero. Six states saw double-digit enrollment decreases during the period. Eight states saw enrollment increases, led by two with double-digit jumps. New Hampshire colleges saw a 25% jump in enrollment and Arizona saw a 10% increase.
                                  • The US Court of Appeals for the District of Columbia (DC) Circuit reinstated in March two lawsuits alleging that American University and George Washington University, by switching to online instruction when infection fears were at their height, breached their contracts with students. The great majority of similar lawsuits filed during the pandemic have been dismissed, as these two initially were, because the contract between the students and the colleges made no promise that instruction would be in person. According to the DC Circuit, however, even in the absence of an explicit promise by the schools, the contract might have been made against a background understanding that tuition payments purchase not simply instruction but an on-campus experience. This understanding in turn would be sufficient to create what scholars nowadays call a default rule — a provision to be read into the contract unless a party negotiates to get rid of it.
                                  • Hawaii, the last US state with a mask mandate in place, allowed the mandate to expire on March 25. The US Centers for Disease Control and Prevention's latest guidance recommends that people continue to wear masks indoors in communities with high levels of Covid-19. The agency last week said that more than 90% of US residents are now in a location with low or medium Covid-19 community levels.
                                  • The US Department of Education will make an additional $198 million in American Rescue Plan funds available to reduce barriers to higher education caused by the COVID-19 pandemic, including the Omicron variant. The funding is primarily intended to meet students’ basic needs such as housing and food security. The Department is also providing guidance on how colleges can use existing data to connect students to other federal benefits, such as the Supplemental Nutrition Assistance Program (SNAP) and the Affordable Connectivity Program at the Federal Communications Commission.
                                  • At least 261 lawsuits have been filed against US colleges and universities over their alleged failure to refund tuition and fees when the pandemic forced them into remote learning, according to the law firm Bryan Cave Leighton Paisner. Many of these lawsuits have been dismissed, including a case against Harvard University in June, because the schools had not contractually promised in-person instruction and access to on-campus facilities. Columbia University will pay $12.5 million to settle a lawsuit by students who claimed it failed to refund fees when it moved classes online in the spring 2020 semester because of the COVID-19 pandemic.
                                  • The coronavirus pandemic has boosted interest in tuition insurance. Students or their families buy a policy that will reimburse them for all or part of their tuition and other costs of attending college if the student must withdraw from school for a documented medical or mental health reason. Experts note, however, that it’s important to know the details of how a policy works and what situations are covered. Some insurers specifically exclude student withdrawals resulting from an epidemic, and they may also exclude withdrawals because a school switched from in-person classes to remote learning.
                                  • Florida Governor Ron DeSantis signed legislation shielding the state's colleges and universities from lawsuits seeking refunds for students because of pandemic-related closures.
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