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 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 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 non-profit 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

                                Coronavirus Update

                                Apr 26, 2022 - Many NJ Students Skipped SAT
                                • Less than half of New Jersey high school students who graduated in 2021 took the SAT at some point in high school, down from more than 70% of students in the year before the pandemic, new state data from New Jersey schools shows. “Students are still getting accepted to schools without (the SATs) and so it’s an expense and piece of preparation that they don’t need to invest in anymore,” said Suzanne McCotter, the dean of The College of New Jersey’s School of Education. The drop was even larger in the PSAT, a preparatory exam usually given to underclassmen during school hours. Participation in that test dropped more than 50% from the pre-pandemic school year to the 2020-2021 school year.
                                • Some recent studies now show that about a third of children in the youngest grades are missing reading benchmarks, up significantly from before the pandemic. A study conducted in Virginia showed that early reading skills were at a 20-year low in the fall of 2021. About 60% of students at some high-poverty schools in the Boston region have been identified as at high risk for reading problems — twice the number of students as before the pandemic. Children in every demographic group have been affected, but Black and Hispanic children, as well as those from low-income families, those with disabilities and those who are not fluent in English, have fallen the furthest behind.
                                • Demand for tutoring services may decrease as mask mandates that may be affecting in-school education are eliminated. 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.
                                • Micro schools are the latest schooling alternative to gain traction as more teachers and parents seek alternatives to distance learning. Tutors and teachers are starting their own micro schools to help children learn in small, safe groups without interference from unions, regulation, and mandates. Micro schools typically serve 10 to 15 students but can accommodate as many as 150 and focus on personalized education through hands-on learning and a project-based approach. Experts say that the flexibility that micro schools offer is one of the many reasons parents are withdrawing from the public school system. Public school enrollment dropped by 3% nationwide from 2019 to 2020 alone, wiping out a decade of slow gains. An increasing number of school districts are returning to distance learning as the number of new COVID-19 cases increase again.
                                • Broad support for tutoring to address pandemic-related learning loss has not translated into widespread adoption, according to an analysis of how school districts are spending COVID relief funding. Burbio, which tracks schools’ responses to the pandemic, found that about a third of districts which provided data on how relief funding is spent are allocating funding to tutoring. The Center on Reinventing Public Education’s ongoing review shows that while 62 out of 100 large districts offer tutoring, most don’t provide details on their programs and how many students they serve.
                                • About 43% of tutors surveyed by online tutoring platform Wyzant said that the pandemic was causing learning loss among their students, and nearly one-third of respondents said they believe that some of their students will never catch back up. About 78% said that their students who are studying remotely need the most help.
                                • Students continue to take exams like the SAT and ACT despite the fact that more many colleges stopped requiring them for admissions. Education experts say that demand for the test is being sustained by their use in determining the winners of academic scholarships. Colleges and universities including Loyola University Chicago, Clemson University, and the University of Oklahoma, have made scores optional for admission but continue to require test results for their most prestigious merit scholarships. Students who are among the top PSAT scorers could earn $68,500 from the University of Oklahoma, which would cover full tuition for an in-state student. Some state-run scholarship programs, including in Idaho and Florida, also continue to require students to have an SAT or ACT score to be considered.
                                • The Brookings Institution found that more than four-fifths of the tutoring programs that were examined since the pandemic started resulted in "statistically significant" improvements for the students involved.
                                • Some school districts have announced that employees who try to lead tutoring pods while keeping their regular teaching jobs may be fired. “As a reminder… [Arlington Public Schools] teachers are not permitted to take on additional positions such as tutoring or learning supervision during the school day,” officials in the Northern Virginia district wrote in a message to staff. “Nor are they allowed to tutor students they work with…outside of the classroom for pay.” Some school leaders contacted by The Washington Post said they could not estimate the number of pod leaders in their ranks. Industry experts say that data on how many teachers are leading pods is difficult to gather because many educators are hiding their activities from school districts.
                                • The private tutoring market, which includes Chegg, Club Z, and Varsity Tutors, is projected to grow in the US by $7.37 billion by 2023, at a compound annual growth rate of almost 8%, according to Technavio. Varsity Tutors, a live learning platform connects students with tutors, who work as independent contractors, "... is experiencing unprecedented demand, as students — especially [those in] kindergarten through fifth grade, who have historically been less receptive toward online learning — work to stay on track during closures,” according to Chief Academic Officer Brian Galvin.
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