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 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 6,700 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 Government Funding

Technical and trade schools are highly dependent on student financial aid programs through federal (Title IV) and state programs.

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 15-16 workers, and generates $2 million annually.

    • The technical and trade school industry consists of about 6,700 firms that employ 105,000 workers and generate $13 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

                                  Coronavirus Update

                                  Apr 26, 2022 - Industry may Benefit From High School Financial Literacy Programs
                                  • Some industry stakeholders say that the financial literacy classes required by an increasing number of high schools may boost enrollment at technical and trade schools. Wisconsin state legislator Alex Dallman said that technical schools in the state like the idea of teaching about finances, as it may lead more students to conclude that they should forgo an expensive college education for a lucrative career in the trades. “In our economy right now, we’re taking out massive loans, we are not repaying them, and we have to be smarter about how we handle money,” he said. Seven states now require a stand-alone financial literacy course as a high school graduation requirement, and five additional states' requirements take effect in the next year or two.
                                  • Many technical and trade schools quickly adopted distance learning strategies. The Association for Career and Technical Education (ACTE), in partnership with MaxKnowledge, offers ACTE member schools access via its CTE Learn portal to training materials which help educators develop distance learning tools and best practices. Schools or coursework that teach aviation repair, welding, cosmetology, phlebotomy, or other hands-on skills faced challenges in pivoting to an online curriculum, however. Some professions require hands-on training to receive certifications and licensing.
                                  • Schools that have reopened may do so with smaller class sizes, more flexible schedules, and strict guidelines for social distancing. Typical measures include single entry points and exits with temperature checks, mandatory masks, hallway traffic markers on the floors, and safety orientations at the start of the term. The widening availability of vaccines – including for younger Americans - could help technical and trade schools return to more normal operations. On April 19, all Americans over age 16 became eligible to be vaccinated.
                                  • Enrollment at some trade and technical schools has declined during the pandemic. The drop may be partly attributed to troubles high schools have had with in-person learning, which impacts how many students take part in dual-enrollment programs that enable high school students to take state-funded college courses. To help boost engagement in dual-enrollment programs, some technical schools work more closely with high school counselors to promote classes to students. Schools also maintain closer communications with students via text messages to help them with registration, payment options, and other onboarding issues. As most high schools returned to in-person learning for the 2021/2022 school year, participation in dual-enrollment programs is likely to rebound. The availability of vaccines for younger teens also may help improve dual-enrollment program participation. In May, Pfizer received FDA emergency use authorization to use its vaccine in children ages 12-15.
                                  • Some technical and trade schools worked with local businesses to develop cooperative partnerships to help students get more hands-on working experience during the pandemic. Students apply their learning in a commercial setting while easing the strain on schools that may struggle to provide hands-on experiences due to distancing requirements and lack of space and/or equipment.
                                  • The CARES Act provided $14 billion in higher education funding, including technical and trade schools. The funding was primarily aimed at aiding low-income students and their schools. Trade schools gave much of the CARES Act funding they received to students to help with tuition and other expenses and invested it in the transition to online learning technologies. The $900 billion stimulus package passed in December 2020 included $22.7 billion in aid to colleges and universities but contained no specific lifeline for technical and trade schools. Technical and trade schools were also eligible to apply for aid through the Paycheck Protection Program (PPP), a lending program administered by the Small Business Administration and aimed at helping small businesses and nonprofits retain their workers. The PPP ran out of money on May 11 and stopped accepting most new applications, according to The New York Times.
                                  • Many college and university campuses require students to be vaccinated if they plan to return to in-person classes. Most of the colleges that have announced vaccinations requirements are private institutions. Some public university systems in several states also require in-person students to be vaccinated. Trade and technical schools could institute vaccination requirements, especially for areas of study that aren’t a good fit with remote learning. Laws and regulations regarding vaccination requirements vary by state, however.
                                  • US technical and trade school employment declined sharply during the pandemic, and the crisis’ lingering effects could hinder longer-term employment growth. US technical and trade school employment fell 13% between January and December 2020, according to a July 2021 MissionSquare Research Institute report analyzing Bureau of Labor Statistics data. Some campus support staff positions – such as custodial, administration, and food services – likely saw reductions when many educational facilities, including technical and trade schools, closed temporarily and shifted to online learning. Consolidation may also result because some schools became financially stressed or closed. Technical and trade school employment is projected to rise only 1% between 2019 and 2029, despite increasing demand for workers in the skilled trades. Employment for technical and trade schools operated by local governments is forecast to rise 8% by 2029; private trade school employment will grow 5% during the same period. Those gains are largely offset by a projected 31% decline in employment at technical and trade schools operated by state governments. Online classes may become the norm in some areas of technical and trade instruction, and hybrid models may become more popular, both of which could hinder school employment growth.
                                  • Several grantmaking foundations have recently announced new or increased support for career pathway programs, according to the74.com, a nonprofit education news organization. Many of the programs aim to reengage high school students who became disaffected with school during the pandemic. Foundations including Bloomberg Philanthropies, the Bill and Melinda Gates Foundation, the Carnegie Corporation of New York, and Walmart.org have all made recent financial commitments to career training initiatives. Some states – including Delaware, Texas, and Tennessee – are using some of their federal stimulus dollars to fund career training programs as part of their economic recovery strategies. In some cases, philanthropic donations and federal stimulus are being added to existing funding to extend workforce training programs to middle schoolers.
                                  • The pandemic exacerbated a nationwide shortage of truck drivers, contributing to supply chain disruptions. A truck driver training pilot program was included in the Infrastructure Investment and Jobs Act signed into law in mid-November 2021. In January, the Federal Motor Carrier Safety Administration took the first steps in establishing the program, which aims to create apprenticeships for up to 3,000 drivers aged 18 to 20. Federal regulations currently require drivers to be at least 21 to drive a truck across state lines. Young drivers will have to complete 400 hours of cumulative driving time with an experienced driver by their side, but will be able to drive alone across state borders under continuous monitoring by trucking firms after they complete the program. Some truck driving schools say that they are recruiting younger students who previously had been barred from the profession due to their age.
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