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 6,700 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 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

                                  Recent Developments

                                  Nov 11, 2022 - Federal Judge Blocks Student Debt Forgiveness Program
                                  • A federal judge in Texas struck down the Biden administration’s student-debt forgiveness program. Judge Mark Pittman wrote in his opinion that the program is an “unconstitutional exercise of Congress’s legislative power” that also failed to go through normal regulatory processes. The program would have canceled up to $20,000 in student loans for tens of millions of borrowers. The Justice Department is appealing the verdict, a spokeswoman said.
                                  • 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.
                                  • Delivering career and technical education (CTE) programs may be challenging due to funding and staffing constraints, difficulty recruiting and retaining teachers, and negative perceptions of CTE, according to a 2022 report from the US Government Accountability Office. Student access to CTE may be limited by lack of transportation for work-based learning, language barriers, lack of support services and inflexible scheduling, and by financial challenges. A lack of data on long-term outcomes of career and technical education can make it difficult to identify proven strategies for implementing or replicating programs that overcome these challenges.
                                  • Fewer students are attending college and instead are enrolling into trade schools, according to the National Student Clearinghouse Research Center (NSC). Trade schools are reporting a 40% enrollment increase. Many cite the expensive costs of college and strong demand for skilled workers as key drivers of rising enrollment. Large enrollment increases are being reported for training in the agriculture, construction, and transportation industries.
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