The State of the Education Industry in 2015


Image via flickr and Sean MacEntee

On a micro level, education is very simply about helping students learn the concepts and knowledge they need to know. When you zoom out from that small focus and start to look at the methods, products, debates, issues, and infrastructure that are all focused on this one goal, the sheer size and complexity of the education industry quickly becomes clear.

The education industry is not only huge; it’s also undergoing more changes recently than it has at possibly at any other point in history. Startups are sprouting to fill in gaps and create new technologies to service this increasingly lucrative field. Their contributions, coupled with innovative new ideas about what the average classroom can (and should) look like, are re-shaping what learning means for kids around the country.

In the interest of providing a partial snapshot of how all this is playing out, we’ve collected some notable information and statistics that speak to what’s going on in the world of education today.

Fewer New Teachers

NPR recently reported that enrollment in teacher training courses is decreasing at a troubling rate in many states around the country. This image from edweek shows that many of the largest states are losing future teachers by the tens of thousands. Teaching has long been regarded as a profession where the pay doesn’t match the amount of work and effort expected. On top of that, in recent years teachers have often found themselves the target of criticisms around tax spending and test scores, and many teachers around the country were laid off due to budget cuts.

As a result, college students who may have otherwise considered becoming teachers started to see the job as a risky profession to pursue. Current teachers will probably face a continued increase in class sizes as a result of the shortage. Ideally, having fewer teachers to pay would at least mean an increase in salary to those already employed, but considering the political landscape that’s likely to be a hard sell in many districts

Students and Teachers: By the Numbers

Close to 50 million students are currently enrolled in public schools in the United States, according to the Institute of Education Statistics.  3.1 million full-time teachers are employed, making the pupil-to-teacher ratio sixteen. All told, the amount of public money spent on education comes to $619 billion, which breaks out to about $12,000 per student.

The socioeconomic statuses of our students reflects some of the larger problems affecting the nation, as 51% of students come from families considered to be low income. These students qualify for the free or reduced-price lunch program and are often concentrated in certain cities and states.

Graduation Rates Are Up

Now for some good news. The percentage of students earning a diploma has started to go up. Over 3 million students are expected to graduate this year. The dropout rate has decreased by around 5% since 2000, and 66% of high school graduates are expected to move on to college right after graduation, joining the 21 million students already attending colleges in the country.

Cheap and Free Textbooks Disrupt Market

While tuition rates continue to go up, students in college are finding savings in one area. The $4.3 billion textbook industry has been challenged by cheap rentals and open-access textbooks.

Startups like Boundless and Flat World Knowledge make use of content in the creative commons to create textbooks that can serve as alternatives to the more expensive options students are assigned. While Chegg and have found successful business models in renting out textbooks to students at affordable rates. While the cost of textbooks from traditional publishers goes up, the amount the average student spends on course materials is going down.

Students Are Sold on Online Education (But Teachers Are Still Unsure)

As we’ve previously reported, over a third of all higher education students are taking at least one of their courses online, and more than 12% are enrolled in online courses exclusively. The nation’s students are making it clear that they’re comfortable with online learning.

Teachers, for their part, are still largely unconvinced. Many are slowly coming around to the idea of online courses, but only 26% think that the courses can produce the same level of results as teacher-led courses. Those who have actually taught an online course have a more positive view of online learning’s potential, which suggests that as their numbers grow, more teachers will come to accept the idea. And their numbers will grow, 68% of the professors in that same survey said their institution plans to increase online offerings.

Ed Tech Industry Remains Lucrative

According to GeekWire, 2014 was a record year for investment in education technology companies, reaching around or over $2 billion (depending on your source). The SXSWedu conference keeps growing and news of new startups in the industry getting high-dollar investments just keeps coming.

The Most Lucrative Area in Ed Tech

Looking at which companies in the industry are getting the most funding can give us a glimpse into what the market thinks is to come. Based on some of the winners for 2015 so far, one trend is clear: online learning is the horse everyone’s betting on.

Three of the businesses getting the most attention from investors are all in the online learning space:

  • – The website offering different online courses, mostly in areas that can help professional students bolster their resume or enter a new field, was #2 on the list of top investments in the first quarter of 2015, with $186 million.
  • Code School – This is another website offering online lessons, this time all focused on one particular professional skill, coding. Code School was acquired earlier this year for a healthy $36 million sum.
  • Minerva Project – Minerva got a $70 million investment in 2014. The school’s program takes students around the world – spending time in different countries each year, while taking courses via a live stream online. It’s a unique take on online education, but one that clearly got the attention of some big spenders.

In Sum

These are some of the biggest issues influencing the education industry today, but the list is far from comprehensive. 2015’s already been a big year for education and promises to continue to be in the second half. While the money flowing into education companies in the business sector often feels distant from the challenges facing teachers in public classrooms day by day, both sides of the industry can tell us a lot about what’s happening in education, and what’s coming.

Editor’s note: This piece was originally written by Katie Lepi and ran on April 6, 2014. A lot has changed since then, so we’ve had author Kristen Hicks update this piece with the latest techniques and innovations.




  1. HelenHe

    June 12, 2015 at 8:09 am

    Thank you for sharing! As per the statement that “Teaching has long been regarded as a profession where the pay doesn’t match the amount of work and effort expected”, I think it depends.

  2. Dave Nestoff

    June 17, 2015 at 12:07 pm

    That’s a good pulse on the industry, Kristen. What we’re seeing with online learning is definitely a push towards more flexibility and accessibility in the learning experience. Which makes perfect sense with the new generation of technologically driven individuals.

    But what we’re also seeing is people wanting to learn at their own pace. Having this ability is a truly wonderful thing for an individual’s learning experience, as no two learners are the same.

    We firmly believe that there will continue to be growth in the private tutoring real, as one-on-one learning is valuable avenue that ties these two motivations together.

    Furthermore, as the market continues to grow, it seems like the stigmas surrounding it (“too expensive to be mainstream”, “only for underperformers”) are starting to disappear. We are trying to make tutoring affordable, accessible, and most importantly, easy for anyone who wants it.

    Thanks for writing!

  3. paul

    June 27, 2015 at 11:40 pm

    Very impressive. Looking at developing countries, today, education remains an inaccessible right for millions of children around the world. More than 72 million children of primary education age are not in school and 759 million adults are illiterate and do not have the awareness necessary to improve both their living conditions and those of their children. Causes of lack of education Marginalisation and poverty For many children who still do not have access to education, it is notably because of persisting inequality and marginalization. In developing and developed countries alike, children do not have access to basic education because of inequalities that originate in sex, health and cultural identity (ethnic origin, language, religion). These children find themselves on the margins of the education system and do not benefit from learning that is vital to their intellectual and social development. Factors linked to poverty such as unemployment, illness and the illiteracy of parents, multiply the risk of non-schooling and the drop-out rate of a child by 2. Undeniably, many children from disadvantaged backgrounds are forced to abandon their education due to health problems related to malnutrition or in order to work and provide support for the family. Financial deficit of developing countries Universal primary education is a major issue and a sizeable problem for many states. Many emerging countries do not appropriate the financial resources necessary to create schools, provide schooling materials, nor recruit and train teachers. Funds pledged by the international community are generally not sufficient enough to allow countries to establish an education system for all children. Equally, a lack of financial resources has an effect on the quality of teaching. Teachers do not benefit from basic teacher training and schools, of which there are not enough, have oversized classes. This overflow leads to classes where many different educational levels are forced together which does not allow each individual child to benefit from an education adapted to their needs and abilities. As a result, the drop-out rate and education failure remains high. Overview of the right to education worldwide Most affected regions. As a result of poverty and marginalization, more than 72 million children around the world remain unschooled. Sub-Saharan Africa is the most affected area with over 32 million children of primary school age remaining uneducated. Central and Eastern Asia, as well as the Pacific, are also severely affected by this problem with more than 27 million uneducated children. Additionally, these regions must also solve continuing problems of educational poverty (a child in education for less than 4 years) and extreme educational poverty (a child in education for less than 2 years). . Essentially this concerns Sub-Saharan Africa where more than half of children receive an education for less than 4 years. In certain countries, such as Somalia and Burkina Faso, more than 50% of children receive an education for a period less than 2 years. . The lack of schooling and poor education have negative effects on the population and country. The children leave school without having acquired the basics, which greatly impedes the social and economic development of these countries. Inequality between girls and boys: the education of girls in jeopardy Today, it is girls who have the least access to education. They make up more than 54% of the non-schooled population in the world. This problem occurs most frequently in Arab States, in central Asia and in Southern and Western Asia and is principally explained by the cultural and traditional privileged treatment given to males. Girls are destined to work in the family home, whereas boys are entitled to receive an education. In sub-Saharan Africa, over 12 million girls are at risk of never receiving an education. In Yemen, it is more than 80% of girls who will never have the opportunity to go to school. Even more alarming, certain countries such as Afghanistan or Somalia make no effort to reduce the gap between girls and boys with regard to education. Although many developing countries may congratulate themselves on dramatically reducing inequality between girls and boys in education, a lot of effort is still needed in order to achieve universal primary education.

  4. tabby

    June 28, 2015 at 11:20 am

    I’ve only taken online courses on cousera and appreciate the convenience quite abit.Great article