Less funding and demand for test preparation services will limit revenue growth
Los Angeles, CA (PRWEB) July 21, 2012
Tutoring services drew national attention with the 2001 passage of the No Child Left Behind (NCLB) Act. The legislation implemented a government-subsidized program to tutor students who attend failing schools. As a result, the Tutoring and Driving Schools industry grew as “companies scrambled to make their states' lists of approved education providers,” says IBISWorld industry analyst Kevin Culbert. Nevertheless, stiff competition has limited revenue and profit growth. Consequently, IBISWorld estimates industry revenue will decrease at an average annual rate of 0.4% to $9.0 billion over the five years to 2012.
Besides tutoring services, the test preparation market provided a needed boost to the Tutoring and Driving Schools industry following the recession. Many people decided to go back to school to improve their chances of employment, boosting demand for test preparation. “Historically high numbers of high school graduates have also created intense competition for college placement,” says Culbert. “Students have enlisted the help of tutors to boost their chances of admission.” In addition to academic services, this industry also includes driving schools and other instructional services, such as first-aid instruction, self-defense courses and speed-reading. Unlike tutoring and test preparation, these courses are discretionary, making them sensitive to changes in disposable income. During the recession, enrollment in these discretionary courses declined significantly as households cut their expenses. The tutoring and exam preparation segment is slightly less fragmented, although it still contains a large number of owner-operators. This segment has a number of large franchise groups that gather thousands of establishments under their company's banner. The automobile driving school segment has a particularly large proportion of small establishments. This is also the case for the large number of schools in the other segment, which includes Bible schools, first-aid instruction and public-speaking training. Current companies in the industry include Educate Inc., The Princeton Review Inc. and Kumon Institute of Education Co.
During the next five years, industry performance will be dictated by potential changes in NCLB funding. The NCLB has received a lot of criticism since its passage, with some people calling for more regulation of funding disbursement. Also under question is the ability of standardized tests to accurately forecast student success. More colleges are making the tests optional, which will likely stifle the test preparation segment's growth during the next five years. Because of potentially lower NCLB funding and the diminished importance of standardized tests, the industry is projected to experience relatively weak growth. For more information, visit IBISWorld’s Tutoring and Driving Schools in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes exam-preparation and tutoring services, automobile driving schools and other miscellaneous education services. Academic schools, colleges and universities are excluded, as are schools offering instruction in business, management, computers, technical and trade areas, fine arts, athletics and languages.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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