US Educational Services Sector NAICS 61
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Industry Summary
The 115,000 educational services establishments in the US provide instruction and training across a wide variety of subjects. The sector consists of formal educational services providers (elementary and secondary schools, colleges, universities) and specialized education services providers (technical and trade schools, tutoring services).
Demographic Challenges
The decreasing birth rate and smaller families have led to a gradual decrease in the number of children in the US, a factor that affects school enrollment and revenue from government sources.
Dependence on Government Funding
Public K-12 schools and universities are highly dependent on public funding.
Recent Developments
Apr 2, 2026 - Federal Education Tax Credit Program Adoption Continues
- Kentucky became the 24th state to opt into a federal tax credit program that allows donors to receive a federal tax credit of up to $1,700 by donating to a nonprofit scholarship-granting organization when the state's House and Senate overrode Governor Andy Beshear’s veto of legislation opting the state in. Organizations that receive donations can distribute the funds to families for things like private school tuition, tutoring, and transportation. The Federal Education Freedom Tax Credit reduces a donor's federal tax liability directly by the amount donated (up to $1,700) rather than merely reducing taxable income.
- The year 2025 brought sharp staffing reductions at many colleges and universities, according to professional services firm Deloitte. The University of Southern California laid off more than 900 employees; Stanford University cut 363; and Northwestern University laid off 424, amounting to about 5% of its workforce. Deloitte cites limits on student loans, new taxes, and the arrival of a so-called demographic cliff that marks a reduction in the number of college-age Americans as key causes of staffing reductions.
- The US Department of Education has made major changes to loan disbursement, repayment, and student loan forgiveness rules. "The Department’s rulemaking will eliminate the Grad PLUS program, which has fueled unsustainable student loan borrowing, cap Parent PLUS Loans, sunset the confusing maze of student loan repayment plans created by the Obama and Biden Administrations and create a new and simplified Repayment Assistance Plan (RAP)," according to a Department statement. Critics argue that the changes to student loans will be detrimental to borrowers and families, leading to higher monthly payments, narrower student loan forgiveness pathways, and limited options to pay for higher education.
- Educational services sector employment continued rebounding during 2023 and exceeded pre-pandemic levels by mid-2024, according to the US Bureau of Labor Statistics. Educational services sector sales are forecast to increase at a 6.04% compounded annual rate from 2025 to 2029, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
Industry Revenue
US Educational Services Sector
Industry Structure
Industry size & Structure
The educational services sector is comprised of 115,000 establishments that employ 4 million workers and generate $91.6 billion in annual revenue, according to government sources.
- The educational services sector represents 1% of the nation's Gross Domestic Product (GDP) and employs 2.9% of the country's workers.
- The sector is fragmented with the 20 largest firms representing 15.2% of revenue.
- In addition to employer establishments, the educational services sector has 895,000 owner-operated establishments with no employees. The owners of nonemployer firms typically perform the work and may outsource support functions like marketing and accounting.
- The education and health services sectors shed 167,000 establishments in 2021, which equals about 8.2% of existing establishments, according to the Bureau of Labor Statistics. However, the two sectors added about 250,000 new establishments, which is equivalent to 12.3% of existing establishments. As a result, the sectors had a growth rate of 4.1%.
- The education services sector is forecast to grow its employment base by 5.8% overall in 2021-2031, which is comparable to the national average of 5.3% for all jobs, according to the Bureau of Labor Statistics.
Industry Forecast
Industry Forecast
US Educational Services Sector Industry Growth
Source: Vertical IQ and Inforum
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