Exam Preparation and Tutoring Services

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 8,300 exam prep and tutoring service providers in the US offer preparation for standardized tests and academic tutoring programs. Some firms provide basic education and personal improvement programs. Firms may also specialize in occupation, technical, and trade professional development. The industry includes non-profit organizations, franchises, chains, and independent operators.

Online Tutoring Disrupts Industry Model

Online tutoring and exam prep programs expand reach, but also create competition for traditional centers and independent tutors.

Slowing Demand, Heavy Competition

Weaker demand and increased competition are expected to limit revenue and profit growth for exam prep and tutoring service providers.

Industry size & Structure

The average exam prep and tutoring service provider operates out of a single location, employs 13 workers, and generates about $703,000 annually.

    • The exam prep and tutoring services industry consists of about 8,300 firms that employ about 110,000 workers and generate $5.9 billion annually.
    • The industry includes nonprofit organizations, franchises, chains, and independent operators.
    • The industry is concentrated at the top and fragmented at the bottom; the top 50 companies account for about 41% of industry revenue, with the top four companies accounting for 14% of industry revenue.
    • Large companies include Huntington Learning Centers, Sylvan Learning Centers, and Princeton Review.
                                Industry Forecast
                                Exam Preparation and Tutoring Services Industry Growth
                                Source: Vertical IQ and Inforum

                                Recent Developments

                                Nov 14, 2022 - Higher Education Enrollment Decrease Slows
                                • Undergraduate enrollment decreased just 1.1% between the fall of 2021 and 2022, according to the National Student Clearinghouse. This follows a historic decline that began in the fall of 2020. More than one million fewer students enrolled in college from 2020 through 2022. A significant portion of demand for tutoring and exam preparation services comes from those who plan to enroll in undergraduate programs at colleges and universities. Concerns about student debt and a strong labor market for unskilled workers, and questions about college affordability, particularly at four-year colleges, are major factors keeping prospective students away from getting a degree, according to Doug Shapiro, who leads the research center at the National Student Clearinghouse.
                                • National test results released in September by the National Assessment of Educational Progress showed that the performance of 9-year-olds in math and reading dropping to levels not seen in decades. It was the first time since tests began tracking student achievement in the 1970s that 9-year-olds lost ground in math, and scores in reading fell by the largest margin in more than 30 years. The declines spanned almost all races and income levels and were markedly worse for the lowest-performing students. While top performers in the 90th percentile showed a modest drop — three points in math — students in the bottom 10th percentile dropped by 12 points in math, four times the impact. The tests were given in 2022 to a national sample of 14,800 9-year-olds and were compared with the results of tests taken by the same age group in early 2020, just before the pandemic hit the US.
                                • The Wall Street Journal reports that 1.7 million students in the high-school class of 2022 took the SATs, up 200,000 from the previous year. The number taking the ACT went up, too. Almost three-quarters of colleges offering four-year-degrees have gone test-optional or test-blind, so fewer schools now require tests but more students are taking them.
                                • Consolidation in the higher education sector 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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