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
Nov 14, 2024 - Sector Is A Major Cyberattack Target
- Education was the third most targeted industry for cybercrime during Q2 2024, according to Microsoft. The education sector’s user base is very different from a typical large commercial enterprise. Technology users in the K-12 environment include students as young as six years old. The wide swath of employees in school districts and at universities, including administration, athletics, health services, janitorial, food service professionals, and others create a highly fluid environment for cyberthreats. Multiple activities, announcements, information resources, and open email systems increase exposure. Virtual and remote learning have also extended education applications into households and offices. Personal and multiuser devices are ubiquitous and often unmanaged, and students are not always cognizant of cybersecurity or what they allow their devices to access. The average cost of a data breach in the educational services sector was $3.5 million in 2023-24, according to Verizon’s 2024 Data Breach Investigations Report. System intrusion, social engineering, and miscellaneous errors cause about 90% of data breaches and ransomware attacks in the sector. The MOVEit file transfer vulnerability affected educational services in disproportionately high numbers, with the CL0P ransomware gang exploiting the zero-day vulnerability to steal millions of student records in 2023.
- Private equity and venture capital investment in the global education services sector decreased to $4.60 billion in 2023, its lowest annual value in three years, according to S&P Global Market intelligence data. The number of deals decreased by 40% year over year to 190 from 317 in 2022. Deal count for 2023 was the lowest since at least 2019.
- Costs for special education services have skyrocketed in many places as state and federal funding for those services has stayed flat or decreased, according to Education Week. Some states lack the resources and infrastructure to support people with disabilities as they transition out of the K-12 school system. The maximum eligibility age for special education services varies across states. Courts have recently compelled schools in some states to offer services to students for longer time periods. Since 2021, at least nine states have shifted the maximum age to 22: Connecticut, Hawaii, Illinois, Maine, Minnesota, Pennsylvania, New York, Rhode Island, and Washington. Most of those states now require services through the student’s 22nd birthday or the day before, though Illinois requires schools to offer services through the end of the school year during which the student turns 22.
- 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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