Colleges & Universities
Institutions in this industry offer academic and professional courses and confer baccalaureate or graduate degrees. Major US-based institutions include public university systems in states such as California, New York, and Texas, and private universities such as New York University, Duke, Harvard, and Johns Hopkins; leading institutions outside the US include the universities of Cambridge and Oxford, both located in the UK, as well as the University of Tokyo and the University of Toronto.
More than 35% of the world's traditional college-age population is enrolled in a college, university, or professional school, according to the United Nations Education, Scientific and Cultural Organization (UNESCO). Asia boasts the highest percentage of the world's college students (more than 55%), followed by Europe (15%); Central and South America (12%); and North America (10%), according to the National Center for Education Statistics.
The US colleges and universities industry includes about 2,800 four-year baccalaureate and graduate degree-granting institutions with combined annual revenue of about $505 billion. Two-year colleges are covered in the Community Colleges industry profile. Business, secretarial, technical, and trade schools are included in the Education & Training Services industry profile.
Declining enrollment, caused in part by rising tuition, is holding back revenue growth at many US colleges and universities. Schools are competing more intensely for qualified applicants, and many are employing new highly targeted marketing strategies to increase yield rates — the percentage of accepted applicants who choose to attend. While institutions with large endowment funds are generally more financially secure, below-average investment returns are weakening overall purchasing power. However, many schools have increased spending from endowments to pay for student financial aid, research, and other programs.
Colleges are using improved data-tracking methods to streamline the recruiting process and better meet the needs of individual students. Some institutions have implemented new technologies that make online instruction more accessible and interactive. Student participation in study-abroad programs remains strong, and international students are attending US schools at higher rates. Undergraduate institutions may compete with community colleges as well as private education companies that offer specialized vocational training.
Demand for higher education is largely shaped by regional population dynamics, as well as employment and economic trends. The financial success of individual schools is closely related to the number of students enrolled, because many costs are fixed. Large educational institutions have the advantage of government support and can typically offer a wider range of academic programs. Smaller private colleges may have sizable endowment funds and are often able to charge more for tuition.
Affordability — Prospective students are becoming more price-sensitive as average tuition rates have increased at a faster rate than inflation. Some institutions have lowered tuition and increased financial aid awards to help stem enrollment declines.
Job Market Demand — Colleges and universities may update their course offerings and curriculums in response to current employment trends. Institutions with strong computer science and public health programs, for example, are benefiting from rising demand for workers in fast-growing fields like software development, data science, and health care.
Data Analysis — Colleges and universities are increasingly using data analysis to identify and market to qualified high-school students. Schools that use these methods may have competitive advantages over those that do not, especially as applicant pools continue to shrink.
Supplemental Revenue — Large universities often generate additional revenue from secondary sources such as patent licensing, publishing, and athletics. Colleges of all sizes solicit philanthropic gifts to fund capital projects, academic programs, and research studies. Schools with fewer resources to support these revenue streams rely more heavily on tuition and student fees.
Products, Operations & Technology
About 60% of US industry revenue is generated by state-operated public colleges and universities, more than 35% by nonprofit private schools, and less
Sales & Marketing
Finance & Regulation
Regional & International Issues
Also includes the following chapters:
Quarterly Industry Update
Trends and Opportunities
Call Preparation Questions
Glossary of Acronyms