Technical and Trade Schools

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 6,900 technical and trade schools in the US offer vocational and technical training for a variety of subjects and trades, such as cosmetology, aviation, or heavy equipment operation. Companies typically prepare students for a particular type of job and often provide job-specific certification. Companies generate the majority of revenue through tuition and fees. Non-profit organizations may receive funding from contributions, gifts, and grants.

Dependence On Employment Rates

Because workers often look to improve their skill set when unemployed, demand for technical and trade school education is dependent on overall employment rates for the US.

Industry size & Structure

The average technical and trade school operates out of a single location, employs 16-17 workers, and generates $2 million annually.

    • The technical and trade school industry consists of about 6,900 firms that employ 118,000 workers and generate $14 billion annually.
    • The industry includes technical and trade schools, cosmetology and barber schools, flight training schools, and apprentice training.
    • Cosmetology and barber schools account for 19% of firms and about 12% of industry revenue. Flight training schools account for 12% of firms and 25% of industry revenue. Apprenticeship training programs account about 16% of firms and 13% of revenue. A variety of trade and technical schools account for the remaining 53% of firms and 50% of revenue.
    • The overall industry is somewhat concentrated; the top 50 companies account for 38% of industry revenue. The flight training school sector is concentrated; the top 50 companies account for 83% of revenue.
    • Large companies include Lincoln Education Services, Fortis College, and Universal Technical Institute.
                                  Industry Forecast
                                  Technical and Trade Schools Industry Growth
                                  Source: Vertical IQ and Inforum

                                  Recent Developments

                                  May 6, 2023 - Enrollment At Construction Trade Schools Increases
                                  • Enrollment at construction trade schools has increased nearly 20% while fewer students are going to traditional four-year colleges, according to The National Student Clearinghouse. Enrollment in construction trades increased 19% from 2021 through 2022. Four-year universities saw a nearly 4% drop in enrollment in the same time period. Community colleges have seen a 20% drop in student enrollment in the traditional age group (18-24) and a 16% drop in adult students since the beginning of the pandemic.
                                  • A federal appeals court issued a ruling that allows the Biden administration to implement student loan forgiveness and other debt relief under a settlement to resolve stalled Borrower Defense to Repayment claims. The class action lawsuit brought by borrowers against the US Education Department alleged that department officials had illegally delayed or arbitrarily rejected hundreds of thousands of Borrower Defense to Repayment applications, blocking borrowers from receiving student loan forgiveness that they were entitled to. The Borrower Defense program can provide federal student loan discharges and other forms of debt relief for borrowers who were misled by their school through false promises or misrepresentations about key aspects of their program. The settlement agreement would provide $6 billion in student loan discharges to nearly a quarter million borrowers. Some borrowers would also be eligible for other relief, such as payment refunds and updated credit reporting.
                                  • Senate Republicans said in mid-March that they will introduce a Congressional Review Act (CRA) resolution to overturn President Biden's student loan forgiveness plan. The Congressional Review Act allows Congress to examine new regulations made by government agencies and overturn them with a majority vote. A report from the Government Accountability Office said that the student loan plan was subject to the CRA. The White House has disputed that ruling, saying that the student debt relief plan “is based on the Department of Education’s decades-old authority granted by Congress and is a result of the same procedures used by multiple administrations over the last two decades to protect borrowers from the effects of national emergencies.” The US Supreme Court is currently debating the legality of the plan.
                                  • The US Supreme Court (SCOTUS) 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.
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