Higher Education Market Size

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US Higher Education Market Size

The National Center for Education Statistics reports that the 2015-2016 market size for higher education in the United States was approximately $564 billion. IBISWorld proclaimed that the revenue generated from higher education in the country amounted to $497.3 billion in 2018. According to a May 2015 report, the higher education market was valued at $550 billion at that time.

U.S. EDUCATION MARKET (MARKET RESEARCH REPORT)

As reported by Zion Market Research, the market size of the education sector in the United States was about $1.350 trillion in the year 2017. The value of the market is expected to reach $2.040 trillion by 2026. From 2018 to 2026, the education market is anticipated to grow at a compound annual growth rate (CAGR) of more than 4.5% according to Zion Market Research and Business Wire. Over half (54.23%) of the market revenue in 2017 came from the K-12 segment, while 40% originated from higher education institutes based on end-user segment. Meanwhile, universities and colleges in the United States generated $497.3 billion in revenue in the year 2018. This figure indicated a 3.6% increase over 2017.

Furthermore, the higher education market's annualized growth rate in the country was merely 1.8% five years before 2018.

U.S. POST SECONDARY INSTITUTION REVENUES (GOVERNMENT DATA)

In the United States, degree-granting post-secondary institutions generated $564 billion in revenue between 2015 and 2016. A breakdown of this figure resembles the following:

Public Institutions: $364 billion
Private Non-Profit Institutions: $183 billion
Private For-Profit Institutions: $17 billion

As listed by the National Center for Education Statistics, revenues from these particular institutions were produced from appropriations, government grants, contracts, investments, fees, and tuition. A significant portion of the revenue made by private for-profit (90%) and non-profit (39%) institutions came from tuition and fees. On the other hand, the primary source of revenue for public institutions stemmed from government appropriations, contracts, and grants (43%). In a May 2015 report, the National Center for Education Statistics stated that higher education in the United States had an estimated value of $550 billion, whereas $80 billion originated from graduate education.

U.S. EDUCATION MARKET (BASED ON ENROLLMENT AND AVERAGE TUITION/FEES)

As reported by U.S. News & World Report, the average cost of fees and tuition for the 2018-2019 school year goes as follows:

Private Colleges: $35,676
Public Colleges (state residents): $9,716
State Schools (out-of-state students): $21,629

In 2018, college enrollment at public and private institutions was expected to reach 14.8 million and 5.13 million, respectively, according to Statista. Moreover, the U.S. Department of Education reports that the total enrollment (by age) in every degree-granting post-secondary institution in 2016 and 2027 goes as follows:

2016

Projected figures for 2027

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US Higher Education Market Size Segmentation

Today, three million students in the United States pursue higher education fully online, representing a $20 billion market, and 15 percent of all higher education enrollment in the country. According to a market research report by Technavio, the online higher education market in the United States is expected to increase at a CAGR of 20% during the forecast period 2017-2021.

Graduate and undergraduate education

The total number of undergraduate in 2018 was 16,998,000 and is expected to reach 17,402,000 in 2027. The undergraduate enrollment represents about 85% of postsecondary enrollment in the United States. It increased by 30% from 2000 to reach 18.3 million in 2010, but it declined since then to reach 17.3 million in 2015. As in previous years, the largest numbers of students at the undergraduate level in 2015 enrolled in:
  • associate’s colleges with 7.2 million enrollment (42% of all undergraduates enrolled)
  • master’s colleges/universities with 3.7 million enrollment (21% of all undergraduates enrolled)
  • doctorate-granting universities with very high research activity with 2.1 million enrollment (12% of all undergraduates enrolled).

In 2017, there were 2.25 million graduate school’s applications which is an increase of 1.2% from 2016. Therefore, between 2006 and 2016, the average annual growth rate of the number of graduate applications was 5.7%. Between 2015 and 2016, the number of applications for admission to graduate schools also increased across the highest research doctoral universities by 1.3% and moderate research doctoral universities by 8.2%.

Graduate students represented 13% of postsecondary students (3.8 million students) while undergraduate students represented 87% (24.5 million students). Graduate and undergraduate enrollment have grown consistently with a CAGR of 2%.

In 2015–16, the total expenses per full-time-equivalent (FTE) student were as follows:
  • $56,401 in private nonprofit 4-year postsecondary institutions
  • $44,009 in public 4-year institutions
  • $16,208 in private for-profit 4-year institutions
  • $6,646 in private nonprofit 2-year postsecondary institutions and
  • $6,322 in public 2-year postsecondary institutions
  • $5,374 in private for-profit 2-year postsecondary institutions ($5,374).

The graduate education market spent in the United States is $80 billion. In addition, the revenue of public degree-granting postsecondary institutions was $290,498,744 for 4-year postsecondary institutions and $56,574,919 for 2-year postsecondary institutions in 2014-2015.

Online and offline settings

Today, three million students in the United States pursue higher education fully online, representing a $20 billion market, and 15 percent of all higher education enrollment in the country. According to a market research report by Technavio, the online higher education market in the United States is expected to increase at a CAGR of 20% during the forecast period 2017-2021.
In 2016, about 6 million students in the United States enrolled in at least one online course which is an increase of 32.5% to 36.6% from past years.
Based on federal data compiled from 4,700 colleges and universities, more than 6.3 million students (most of them were undergraduates) took at least one online course in fall 2016 which is an increase by 5.6% from the previous year.
"The 2015 Survey of Online Learning conducted by the Babson Survey Research Group and co-sponsored by the Online Learning Consortium (OLC), Pearson, StudyPortals, WCET and Tyton Partners" stated that the number of distance education students increased by 3.9%, up from the 3.7% rate recorded in 2014.
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