Colleges and Universities
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Industry Overview
The US colleges and universities industry includes about 4,300 degree-granting institutions with combined annual revenue of approximately $400 billion. Sixty percent of industry revenue is generated by state-operated public schools, 40 percent by private schools.
Some 1,700 schools are public, another 1,600 are private nonprofit institutions, and about 1,000 are for-profit private schools. Close to 75 percent of students are enrolled in public schools. Mainly because of big state universities, the industry is concentrated: 50 percent of all students are enrolled in the 400 largest schools. About 60 percent of students (including graduate students) are enrolled in four-year schools, 40 percent are in two-year (junior or community) colleges.
Competitive Landscape
Demand for higher education services is largely driven by population dynamics, but also by employer requirements. The financial success of schools is closely related to the number of students enrolled, because many costs are fixed. Public schools have the advantage of public funding and are typically larger than private schools. Small schools can compete effectively by providing a superior education.
Products, Operations & Technology
Colleges and universities provide educational instruction leading to the granting of a degree that testifies to the student's competence. Many also provide room and board for students and a variety of other services. Some schools also operate hospitals and research facilities. About 18 million students are enrolled in colleges and universities, many on a part-time basis (nearly 40 percent of all undergraduates and 60 percent of those attending public two-year colleges are enrolled part-time). US schools annually award 700,000 associate degrees (two-year colleges); 1.6 million bachelor's degrees; 650,000 master's degrees; 91,000 professional degrees; and 56,000 doctoral degrees.
The operations of colleges and universities involve both instruction and administration. Instruction includes hiring and managing teachers, establishing academic programs of study, and providing necessary educational equipment. Administration includes providing classroom facilities, managing support staff, providing student services such as room and board, and maintaining facilities. Costs for instruction are about 25 percent of total expenses at four-year public colleges and about 40 percent at two-year public colleges. To manage expenses, schools pay close attention to the student/teacher ratio; the national average student/teacher ratio for two- and four-year, public and private degree-granting institutions is about 17 to 1.
Colleges and universities have been among the leaders in using computer technology for administrative management functions, instruction, and communications. Many colleges have built campus-wide wired or wireless networks that allow students to sign up for courses, communicate with teachers, get classroom materials, see taped lectures, and communicate with administrative offices and other students. A growing number of schools offer distance learning via the Internet. Schools also use Internet sites for recruiting, admissions, alumni, and fundraising functions.
