Education, both at higher and lower levels, is
one of the largest activities in the world (in terms of employees, expenditures
and consumers—that is, students).
However, somewhat similar to the health care sector, education's
expenditures, quality of output and ultimate results vary wildly from nation to
nation, and from place to place within nations.
In total, global public and private spending on
education (K-12 through higher education) is equal to about 6% of GDP, or $5.3 trillion
for 2019.
On a worldwide basis, this
makes the education sector a bit smaller than the health care sector.
These numbers are Plunkett Research
estimates.
Globally, the UN counted 1.34 billion students
in grades K-12 during 2017 (the latest year available).
This amounted to an 89.4% enrollment rate (of
potential students) in primary schools and 65.84% in secondary schools.
The UN also counted 220.7 million students
in higher education worldwide.
Meanwhile, the global education market also
serves both working adults (corporate training and worker certification) and
adults seeking learning for personal, casual or recreational purposes.
Many working adults also return to
universities in order to continue or expand their educations, often with an
interest in changing their careers.
Corporate
training and education was a $75.6 billion market in the U.S.
in 2018, and a $165
billion global market, according to Plunkett Research estimates.
Colleges
and Universities:
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Education, both at higher and lower levels, is
one of the largest activities in the world (in terms of employees, expenditures
and consumers—that is, students).
However, somewhat similar to the health care sector, education’s
expenditures, quality of output and ultimate results vary wildly from nation to
nation, and from place to place within nations.
In total, global public and private spending on
education (K-12 through higher education) is equal to about 6% of GDP, or $5.3 trillion
for 2019. On a worldwide basis, this
makes the education sector a bit smaller than the health care sector. These numbers are Plunkett Research
estimates.
Globally, the UN counted 1.34 billion students
in grades K-12 during 2017 (the latest year available). This amounted to an 89.4% enrollment rate (of
potential students) in primary schools and 65.84% in secondary schools. The UN also counted 220.7 million students
in higher education worldwide.
Meanwhile, the global education market also
serves both working adults (corporate training and worker certification) and
adults seeking learning for personal, casual or recreational purposes. Many working adults also return to
universities in order to continue or expand their educations, often with an
interest in changing their careers. Corporate
training and education was a $75.6 billion market in the U.S. in 2018, and a $165
billion global market, according to Plunkett Research estimates.
Colleges
and Universities: In higher education, the U.S. had 10.8
million students in degree-granting, 4-year colleges and universities during
the fall 2017 semester school year, and 5.7 million students in public 2-year
colleges, (the latest year for which comprehensive data is available) according
to the National Center for Education Statistics.
Education
in Grades K-12: In the United States alone, 58.0 million
students (public and private schools combined) attend classes from preschool
through 12th grade, in 98,158 public schools of all types, operated
by 13,584 school districts, plus 34,576 private schools. (Roughly 2 million additional lower school
students are schooled at home.) These
schools are run by 3.8 million teachers and 3.4 million administrators and
support staff. These numbers are for
2016 (the latest year for which comprehensive data is available) published by
the U.S. Department of Education, National Center for Education Statistics.
The cost of this schooling is approximately $668
billion yearly for public K-12 schools (not including private schools). Expenditures were expected to be about $11,600
per student for the 2016-2017 school year, but the cost varies wildly depending
on what part of the nation you are considering.
For example, 2016 found expenditures ranging from $6,953 per student in
Utah to $22,366 in New York City, and $17,510 in Alaska.
Roughly $80 billion of the total cost of public
K-12 education is provided for by various federal government programs. Most of the balance is split about evenly by
state and local taxes.
Challenges
in Lower and Higher Education: The
realm of education can, at its simplest, be divided into two parts: lower education (preschool through high
school, often referred to as K-12) and higher education (junior colleges,
technical schools and colleges and universities, including their graduate
schools). Those two sectors could each be
logically divided into two further parts:
publicly-funded schools and private schools.
Regardless of which quadrant of this simplified
view of schools and colleges is under discussion, the challenges faced by
funders, administrators, parents and educators are disturbingly similar in many
economically-advanced nations: a) costs
that have grown very rapidly over recent years (reflected in high tuition, high
operating expenses and growing costs to taxpayers and private tuition payers);
b) results that are often disappointing (reflected in a combination of low
graduation rates, poor standing in comparative international studies of K-12
student achievement, high levels of college student debt and difficulty among
many students in finding good jobs upon graduation—sometimes referred to as
underemployment); and c) the need for schools and teachers to attempt to serve
large student bodies of widely varying intelligence, cultural or linguistic
background, academic interest and individual needs.
There are stellar examples of schools and
colleges that rise far above these challenges across the U.S. and the rest of
the world. Unfortunately, there are also
miserable failures at the bottom of the list, where schools fail to deliver a
reasonable return on the time and money invested in them.
The Debate Over the
Reform of Public K-12 Schools in the U.S.:
Ever since free public education became
the norm in America, the costs and the methodology used to teach in schools
have been the subject of intense (and frequently bitter) debate. That debate is now intensifying for three
reasons:
1) Costs have risen faster than the
general rate of inflation for many years.
2) Many parents, students and observers
are disappointed in the results achieved by students. This is fueled by generally disappointing
achievement test results in K-12 and a very poor showing for U.S. students when
ranked against the students of other nations in comparative studies known as
PISA scores. The looming question in
many minds is: are students being
prepared properly for their future careers, for a world that is rapidly
adopting advanced technologies, for a climate of intense competition due to
globalization, and for higher education for those students who choose to pursue
it?
3) Technology is slowly but surely
changing the challenges, opportunities and methods of providing education at
all levels, but the implementation of technology leads to further controversies
(such as students’ privacy and the so-called ”digital divide” that limits the
opportunities of lower-income students who do not have computers or internet
access at home) along with significant investments required for equipment,
services and training.
Source:
Plunkett Research, Ltd.
The proposed (and very controversial) cures to education’s
needs are as varied as the challenges faced, ranging from bigger school budgets
and higher pay for teachers at the simplest end to more centralized control,
government intervention, student testing and accountability for teachers at the
most complex end. Some people argue for
less federal government involvement and more autonomy at the state and school
district level, while many observers state that teachers’ unions have too much
power and political influence.
Alternatives to traditional education are
gaining traction. Charter schools, home
schooling, online classes and MOOCs (massive open online courses) are slowly
gaining market share, sometimes provided by for-profit companies, sometimes
springing from parental efforts, and most often growing through nonprofit
groups ranging from public school systems to religious organizations.
At the college and university level, concerns
about the costs and effectiveness of higher education have been accelerated by
the massive debt levels now carried by U.S. college students. U.S. Bureau of Labor statistics indicate that
the price index for U.S. college tuition rose by nearly 1,272% from early 1979
through early 2019, four times faster than the overall rise in consumer prices
(food, housing, etc.) of about 266%.
However, the increases in tuition stated above
do not reflect the fact that financial aid to university students has also
increased substantially. The net cost to
the typical student has risen at a much slower rate, after factoring in
financial aid. Another significant
factor that is often overlooked is the fact that state budgets for support to
public universities typically have not kept up with inflation, leaving it to
universities to look to higher tuition to cover their costs. (State budgets are under extreme pressure due
to the rising costs of pensions for former state workers, leaving less money
available for education.)
At the same time, many observers point to a long-term
trend of rising ratios of administrative, non-academic staff to professors, creating
lower operating efficiencies and higher overall costs of education. This would indicate opportunities for the
application of better technology to reduce the number of employees required for
administrative tasks, such as human resources or accounting.
In fact, total American student debt, at $1.49
trillion, is of stunning proportions, exceeding even the total credit card debt
of all Americans. The average new U.S.
graduate with a 4-year degree left school in 2017 with $39,400 in student
loans, up from only $18,600 in 2004. The
burden of making payments on these loans is limiting the ability of recent
graduates to purchase cars, household goods and homes, which in turn is
detrimental to the growth potential of the economy overall. There is tremendous pent-up demand among recent
grads to form new households of their own, but their finances and job prospects
in many cases limit their ability to leave their parents’ homes and strike out
independently.
Meanwhile, there is a growing emphasis in
America on better supporting and utilizing the community and technical colleges
that are already widespread across the nation, in order to reduce overall
tuition and fee costs to students and boost career-specific training tailored to
suit the needs of local employers. Such
schools typically have much lower tuition costs than 4-year colleges and
universities.
Technology
as a Long-Term Solution: Technology-based
education solutions are gathering tremendous momentum, and in many cases they
are being carefully tested and applied in real school situations. Online learning is gathering speed at all
levels, from home schooling of high school students, to basic courses for
university students, to essential skills training for corporate employees.
Software tools enhancing everything from school
attendance management, to student engagement, to the availability of learning
resources online are growing in availability and popularity. Business and investment opportunities abound
due to the immense demand for greater productivity, efficiency and
effectiveness in education. “Points of
pain” can be found throughout the spectrum of the education sector, while the
size of the market is immense, both in developed nations in North America,
Europe and Asia, and in less-developed countries starved for good educational
resources.
People who
are considering the future of education should be prepared for twists, turns
and surprises. Massive demand for
quality education worldwide, combined with the need to control costs and
harness the potential of cloud-based computing, mobile devices, ultrafast
internet access and artificial intelligence, will lead to unexpected changes
and advancements. For example, Google’s
free cloud-based apps, like Google Docs, are taking public schools by storm,
while traditional publishing firm Bertelsmann (the massive global firm that is
owner of dozens of radio and TV companies and such book imprints as Penguin
Random House, as well as music company BMG) has invested heavily in state-of-the-art
EdTech firms including Udacity, HotChalk and Relias Learning. One of the biggest surprises of all was an
announcement by world-class Purdue University, long a leader in fine education
with its advanced schools of engineering, science, business and aerospace, that
it would acquire the for-profit education business of Kaplan university,
picking up 32,000 students in the process.
Kaplan owned a very well developed online learning platform, and the
acquisition enables Purdue to rapidly expand its offerings to remote students,
including working adult learners.