Higher Education Market

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Higher Education Industry SWOT

The higher education industry in the US is highly diverse, making it a suitable environment for any student.


  • The higher education industry in the US is highly diverse, accommodating public, private, small, large, religiously affiliated, urban, suburban, and rural institutions. This diversity ensures that students can easily find a place that caters to their dreams and goals.
  • Also, the industry features a variety of not-for-profit organizations that seek to promote professional development within the space, while addressing and providing exposure to related issues such as international student recruitment, admissions, retention, and services, amongst others.
  • Generally, the industry garners a highly prestigious reputation internationally. About 62 US institutions appear in the list of the Top 200 World University Rankings by Times Higher Education.


  • The cost of education in the US higher institution industry is high and is reputed to be one of the most expensive globally. However, these rates are even higher for international students who pay exorbitant prices and fees to access education. For example, the California residents paid $13,900 for the 2017/2018 academic year compared to $40,644 for international students.
  • The competition among higher institutions in the US often causes them to make academic decisions that are inconsistent with organizational missions, its long-term financial goals, or the public's best interests.
  • Some government decisions and policies equip racial and financial discrepancies within the system. For example, a 2014 study revealed that "four traditionally white institutions received more in federal, state, and local contracts and grants than 89 four-year Black colleges and universities (HBCUs) combined." Quite prevalent in American society, such policies hinder economic mobility. As such, the minority population and low-income individuals are less likely to obtain college education compared to the white people and those from middle-to-upper income families.


  • Specific trends in higher education, such as rising tuition, increasing costs of operation, and a mismatch between employee skills and employer needs, are opening up opportunities in the sector. The approach to higher education in terms of how it is delivered, financed, and recognized has given room to new education companies such as Make School, Coursera, and Trilogy Education.
  • Online education is receiving more recognition and acceptance as they offer increased flexibility and reduce costs significantly. For example, "Coursera offers a fully online master's degree from the University of Pennsylvania in computer and information technology for one-third the cost of the on-campus version."
  • Competency-based education (CBE), which allows students to apply their life and work experiences to their education is also taking precedence, as it offers a market-oriented option that is less expensive.
  • Further, more companies are working with corporations that help to bridge the gap between employer needs and employee skills. These corporations, such as Trilogy, partner with higher institutions, and make proper recommendations to companies to bridge the tech talent gap. One such company leverages its partnership with higher institutions and its network of employers to provide a program that allows students to pay their tuition under a two-year contract after being employed.


  • The marketplace is replacing the state government's influence in shaping higher education in the country. As government support is no longer sufficient to cater to educational expenditures, public colleges and universities are seeking more autonomy to create more flexibility in their systems.
  • The schools are requesting exclusive rights to determine tuition fees and seek funding. Such autonomy would ensure the prioritization of specific disciplines and people, as well as changing the institutional structure to favor the external grants and new technologies. These actions would further reduce the barely existing distinction between public and private institutions.
  • The students would thus be forced to accommodate these changes by paying higher tuition and fees for education.
  • Improving recruiting and targeting methods to include the use of analytics and big data exposes the industry to a decrease in its diversity, as an unintended consequence of technology adoption.
  • Without continuously auditing their business processes to identify duplicate procedures or inefficiencies and ensure that an institution's business function is in line with its strategy, colleges in the US might find that they are unable to meet up with their academic missions. As such, they may experience financial strain due to "revenue declines, increased operating costs, and shrinking budgets" that are already prevalent in the industry.

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Higher Education Segmentation

The higher education industry is divided into doctoral research universities, master's universities and colleges, baccalaureate colleges, baccalaureate/associate's colleges, associate's colleges, specialized institutions, and tribal colleges.


  • Doctoral research universities comprise institutions (exempting specialized institutions and tribal colleges) that awarded no less than 20 research/scholarship doctoral degrees in the 2016-17 update year.
  • Also, institutions that awarded below 20 research/scholarship doctoral degrees and at least 30 professional practice doctoral degrees in no less than two programs.
  • This segment is further divided into R1 (doctoral universities with a very high research activity), R2 (doctoral universities with a high research activity), and D/PU (doctoral/professional universities).


  • Institutions under this category include those(exempting specialized institutions and tribal colleges) who awarded no less than 50 master's degrees in the 2016-17 update year, but fewer than 20 doctorate degrees.
  • It is further divided based on the number of degrees awarded into larger programs (200 degrees), medium programs (100-199 degrees), and smaller programs (50-99 degrees).
  • However, institutions that awarded less than 50 master's degrees are classified as smaller programs when their enrollment profile is classified as exclusively graduate/professional or majority graduate/professional and they awarded more graduate/professional degrees than undergraduate degrees.


  • Institutions in which 50% of all degrees conferred/awarded are bachelor's degrees and which also awarded less than 50 master's degrees in the 2016-17 update year are baccalaureate colleges. However, this segment exempts tribal colleges and specialized institutions.
  • It is further divided into the arts & sciences group, comprising institutions with 50% of their bachelor's degree majors in the arts & sciences field. Institutions that do not fall into this subdivision are classified into the diverse fields group.
  • Some master's universities and colleges are classified among baccalaureate colleges upon meeting certain criteria.


  • Four-year colleges, so-called as a result of offering at least one baccalaureate degree program, and that awarded more than 50% of their degree at associate's level are classified as baccalaureate/associate's colleges.
  • Exempt from this category are tribal colleges, specialized institutions, and institutions with sufficient master's or doctoral degrees.
  • It is further divided into mixed baccalaureate/associate's colleges and associate's dominant groups.


  • These are essentially institutions award an associate's degree as their highest level degree. It excludes tribal colleges and specialized institutions and has nine further subcategories including high transfer-high traditional, high transfer-mixed traditional/nontraditional, and high transfer-high nontraditional.
  • Other subcategories include "mixed transfer/career & technical-high traditional, mixed transfer/career & technical-mixed traditional/nontraditional, mixed transfer/career & technical-high nontraditional, high career & technical-high traditional, high career & technical-mixed traditional/nontraditional, and high career & technical-high nontraditional."


  • These institutions comprise degrees, highly concentrated in one field or in a set of related fields for both undergraduate and graduate levels.
  • It is further subdivided into two-year and four-year disciplines.