US Educational Services Sector
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 111,543 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.
Industry size & Structure
The educational services sector is comprised of 111,543 establishments that employ 3.8 million workers and generate $95 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
US Educational Services Sector Industry Growth
Recent Developments
Mar 21, 2025 - President Trump Orders The Dismantling Of The US Education Department
- President Trump signed an executive order instructing US Education Secretary Linda McMahon to start dismantling the US Department of Education. The executive order states that "Ultimately, the Department of Education’s main functions can, and should, be returned to the States." The US Department of Education had announced earlier the layoff of 1,300 staffers, nearly half of its workforce. Education Secretary McMahon described the layoffs as a “significant step toward restoring the greatness of the United States education system”. Preliminary figures cited by USA Today show that the Federal Student Aid Office, which handles student loan and financial aid disbursement, and the Office for Civil Rights, which protects students and teachers from discrimination, will be most affected by the layoffs.
- The education sector, the health services sector, and the professional and business services sector consistently have the highest number of job openings, according to the US Chamber of Commerce. Hiring rates have continuously outpaced quit rates across all industries, according to the Chamber. Jobs that are fully in-person and traditionally have lower wages have had a more difficult time retaining workers, even prior to the pandemic.
- Republican lawmakers in almost a dozen states are signaling that private school choice is among their top legislative priorities in 2025, according to Education Week. Twenty-eight states and the District of Columbia each had at least one program that supplies public funds for parents to spend on educational options outside of public schools in 2024, according to Education Week’s private school choice tracker. Twelve of those states make, or are on track to make, all of the state’s K-12 students eligible to apply for some combination of vouchers, education savings accounts, tax-credit scholarships, and direct tax credits.
- 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 4.12% compounded annual rate from 2024 to 2028, comparable to the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.
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