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
May 10, 2025 - Sector may Face Staffing Issues Due to Federal Immigration Policy Changes
- The US educational services sector may face staffing shortages if Trump administration efforts to reduce immigration and increase deportations are successful. Immigrants are employed across many industries, with concentrations in education, health, and professional services, according to USA Facts. Educational and health services employed the most immigrants — 5.5 million, or 18.4% of all foreign-born employees — in 2023. This is followed by professional and business services with 4.7 million (15.8%) and construction with 3.3 million (11.1%). Almost 20% of the US workforce was foreign-born in 2023: about 29.7 million of the 160.2 million people in the 2023 US workforce were immigrants. Immigrants made up 15.6% of the workforce in 2010.
- Moody's Ratings has revised its outlook for the US higher education sector from stable to negative. The credit rating agency cited recent and potential federal policy changes that have created a more difficult operating environment for colleges and universities. Key factors driving the negative outlook include cuts to research funding, enforcement actions against diversity programs, staff reductions at the US Department of Education, uncertainty over federal student aid, and possible expanded taxes on endowments.
- 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.
- 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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