In 2022, about 37.7 percent of the U.S. population who were aged 25 and above had graduated from college or another higher education institution, a slight decline from 37.9 the previous year. However, this is a significant increase from 1960, when only 7.7 percent of the U.S. population had graduated from college. Demographics Educational attainment varies by gender, location, race, and age throughout the United States. Asian-American and Pacific Islanders had the highest level of education, on average, while Massachusetts and the District of Colombia are areas home to the highest rates of residents with a bachelor’s degree or higher. However, education levels are correlated with wealth. While public education is free up until the 12th grade, the cost of university is out of reach for many Americans, making social mobility increasingly difficult. Earnings White Americans with a professional degree earned the most money on average, compared to other educational levels and races. However, regardless of educational attainment, males typically earned far more on average compared to females. Despite the decreasing wage gap over the years in the country, it remains an issue to this day. Not only is there a large wage gap between males and females, but there is also a large income gap linked to race as well.

The average annual fee for tuition and required services at public higher education institutions in the United States was 7,998 U.S. dollars in 2023. This figure was significantly higher at private higher education institutions, which stood at 34,923 U.S. dollars.

In an impressive increase from years past, 39 percent of women in the United States had completed four years or more of college in 2022. This figure is up from 3.8 percent of women in 1940. A significant increase can also be seen in males, with 36.2 percent of the U.S. male population having completed four years or more of college in 2022, up from 5.5 percent in 1940.

4- and 2-year colleges

In the United States, college students are able to choose between attending a 2-year postsecondary program and a 4-year postsecondary program. Generally, attending a 2-year program results in an Associate’s Degree, and 4-year programs result in a Bachelor’s Degree.

Many 2-year programs are designed so that attendees can transfer to a college or university offering a 4-year program upon completing their Associate’s. Completion of a 4-year program is the generally accepted standard for entry-level positions when looking for a job.

Earnings after college

Factors such as gender, degree achieved, and the level of postsecondary education can have an impact on employment and earnings later in life. Some Bachelor’s degrees continue to attract more male students than female, particularly in STEM fields, while liberal arts degrees such as education, languages and literatures, and communication tend to see higher female attendance.

All of these factors have an impact on earnings after college, and despite nearly the same rate of attendance within the American population between males and females, men with a Bachelor’s Degree continue to have higher weekly earnings on average than their female counterparts.

U.S. Higher Education Market size was valued at USD 101165.92 USD Million in 2023 and is projected to reach USD 176174.98 USD Million by 2031, growing at a CAGR of 7.18% during the forecast period 2024-2031.

U.S. Higher Education Market Drivers

The market drivers for the U.S. Higher Education Market can be influenced by various factors. These may include:

Demographics: Shifts in the population's composition and size of the college-age population have an impact on the demand for higher education.

Economic Conditions: A person's desire to pursue higher education and their capacity to pay for it are influenced by a number of economic factors, such as income levels, unemployment rates, and the general health of the economy.

Technological Innovations: These include online learning environments, virtual classrooms, and adaptive learning technologies, which have an impact on how higher education is delivered.

Government Funding and Policies: The higher education industry is greatly impacted by changes to government funding and policy, including financial aid programs and rules pertaining to student loans and accreditation.

Globalization: As more students from outside pursue higher education in the United States and American universities broaden their global reach, there is a corresponding increase in the demand for higher education.

job Market Trends: Higher education institutions' program offerings and enrollment trends are influenced by the job market's need for particular skills and credentials.

Competitive Landscape: Innovation and advancements in higher education offerings are fueled by competition among schools and universities, which includes rivalry for students, faculty, research funds, and rankings.

Social and Cultural Factors: The higher education market is shaped by shifting societal attitudes regarding education, cultural views of the value of higher education, and changing preferences for various educational experiences.

The United States higher education market size was valued at USD 6.0 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 16.8 Billion by 2033, exhibiting a CAGR of 12.20% from 2025-2033. The market is driven by the growing adoption of e-learning platforms that enable institutions to offer various courses without physical infrastructure restraints, along with the rising establishments of community colleges that make higher education more affordable.

IMARC Group provides an analysis of the key trends in each segment of the United States higher education market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on component, deployment mode, course type, learning type, and end user.

Of those aged 20 to 21 years of age in the United States, 52.8 percent were enrolled in higher education as of 2020, a considerable increase when compared to 31.9 percent in 1970. For those aged 18 to 19, 49 percent were enrolled in higher education in 2020.

Endowment returns for many universities skyrocketed early in the current period, largely fueled by booming private equity and hedge fund activity. In 2021, private nonprofit universities saw a staggering 684.0% jump in investment returns. In contrast, public universities, which typically hold smaller endowments invested more in US equities and fixed-income assets, experienced more modest gains. Meanwhile, inflation and rising interest rates in 2022 reversed the boom for private nonprofits, while public universities' endowments' focus on fixed-income assets stabilized their returns. Skyrocketing investment returns bolstered surpluses, but rising wage expenditures among expanding staff sizes have since brought down profit. Revenue has been sinking at a CAGR of 1.3% over the five years through 2025 to an estimated $591.0 billion despite an expected 0.7% rise in 2025 alone. Colleges and universities are contending with sluggish enrollment growth. Lackluster job placement rates and the highly publicized student debt crisis have made many potential students skeptical of a college degree's return on investment. With judicial reviews rendering the Biden administration's efforts to ease the burden of student debt unsuccessful, student loans remain a major deterrent for consumers. Many have instead opted for cheaper trade schools with reliable connections to employers. Community colleges' affordable prices are also making them a larger competitive threat to four-year universities. In response, universities are hiring capable staff and ramping up marketing campaigns to promote the value of their degree programs. Mounting automation will encourage many to enroll in a university to switch to a new field with more job security. Student loans will become more attractive as inflation stabilizes and the Federal Reserve continues to lower interest rates, encouraging traditional university enrollment. Still, the Trump administration's end to student debt forgiveness initiatives will lead to more price sensitivity among potential students, intensifying competition both between universities and with other cheaper options for postsecondary education. The new budget reconciliation bill will also impose both benefits and challenges for universities, including higher taxes on endowments, lower graduate program borrowing limits and tightened gainful employment rules. International students will remain a valuable revenue stream, especially as legislative changes in Canada promote higher education in the US with students from overseas. Revenue is set to swell at a CAGR of 0.7% to an estimated $610.8 billion through the end of 2030.

School enrollment, tertiary (% gross) in United States was reported at 79.36 % in 2022, according to the World Bank collection of development indicators, compiled from officially recognized sources. United States - School enrollment, tertiary (% gross) - actual values, historical data, forecasts and projections were sourced from the World Bank on July of 2025.

Graph and download economic data for Labor Force Participation Rate - High School Graduates, No College, 25 Yrs. & over (LNU01327660) from Jan 1992 to Jun 2025 about secondary schooling, secondary, 25 years +, participation, tertiary schooling, civilian, education, labor force, labor, household survey, rate, and USA.

The Educational Services sector comprises 13 subsectors of the US economy, ranging from public schools to testing and educational support services. Primary, secondary and postsecondary schools alone generate 92.0% of the sector's revenue. Most of these institutions rely entirely on government funding, and nearly three-quarters of the educational services revenue comes from public schools and public universities. Accordingly, strong federal, state and local support for all levels of education has driven revenue upward over the past five years. Expanding discretionary budgets made private schools and higher education more affordable for students and parents, but the Trump administration's changing policies have brought new complications. Still, substantial funding and skyrocketing investment returns for private nonprofit universities have elevated revenue. Revenue has climbed at a CAGR of 4.6% to an estimated $2.7 trillion through the end of 2025, when revenue will rise by 1.1%. Solid state and local government funding for education has helped support the sector's success despite fluctuating enrollment. Faltering birth rates are leading to lower headcounts in K-12 schools, and ballooning student debt has made many would-be college students skeptical of the return on investment of an expensive degree. While student loan forgiveness efforts slowed a decline in the number of college students, the new presidential administration's end to these efforts has begun to exacerbate price-based and quality-based competition among higher education institutions. President Trump's scrutiny of course curricula has made public funds harder to acquire for schools, and the administration's efforts to close the Department of Education have begun to deter would-be students from attending college. Trends in the domestic economy are set to move in the Educational Services sector's favor over the next five years as prospective students become better able to pay for rising tuition rates and premium education options. Government funding for primary, secondary and postsecondary institutions will continue to escalate through the next period, though lackluster enrollment will temper revenue growth. Public schools, which account for over half the sector's revenue, will continue to post losses and drag down the average profit for educational services. New school choice initiatives, including Texas's new, largest-ever voucher program, will make private schools more affordable for parents. However, heightened oversight and continued efforts to close the Department of Education will remain a significant pain point for many educational services. Overall, revenue is set to climb at a CAGR of 0.8% to $2.8 trillion through the end of 2030.

Graph and download economic data for Personal consumption expenditures: Services: Higher education (chain-type price index) (DHEDRG3A086NBEA) from 1929 to 2024 about chained, PCE, education, consumption expenditures, consumption, personal, services, GDP, price index, indexes, price, and USA.

In 2020, there were 3,931 higher education institutions across the United States. This was a decrease from 2015, when there were 4,583 higher education institutions across the nation.

Higher education in the U.S.

Higher education in the United States refers to colleges and universities in the country. The U.S. has some notable distinctions in regards to higher education when compared to the rest of the world, including NCAA sports, Greek life, and high attendance costs. However, a large majority of the world’s best universities are located in the United States. Some of these universities include the eight Ivy League schools, Massachusetts Institute of Technology, and Stanford University.

Higher education costs

The cost of university in the United States has increased significantly over the last few decades. As a result of these high tuition costs, it has caused students to take out exorbitantly high student loans. Both federal and state governments have decreased the amount of funding towards public schools, but mandatory outlays for higher education are expected to increase over the next several years. In 2021, California had the highest amount of higher education expenditures by state and local governments. California also has the most higher education institutions in the country.

This statistic shows the higher education graduation rate in the United States from the 2000/01 academic year to 2016/17. The graduation rate includes all those who completed their higher education certificate or degree within 150% of normal completion time. The graduation rate has remained relatively constant over time and most recently in 2017/18 the graduation rate stood at 50 percent.

Snapshot img

Higher Education Market Size 2025-2029

The higher education market size is forecast to increase by USD 117.9 billion, at a CAGR of 18.9% between 2024 and 2029.

The market is experiencing significant shifts driven by advances in educational content delivery methods and the increasing prioritization of AI technology-integrated course offerings. This transformation is fueled by the growing expectation for flexible and accessible learning solutions, as well as the need to accommodate the rising cost of higher education. Institutions are increasingly adopting digital platforms and tools to enhance teaching and learning experiences, enabling students to access course materials and engage with instructors from anywhere, at any time. However, this transition poses challenges, such as ensuring data security and privacy, addressing the digital divide, and maintaining academic rigor in a technology-driven environment. Cybersecurity incidents in education rose by 44% year-over-year in 2023, making data security and privacy critical concerns. Additionally, an estimated 34% of students in low-income or rural areas still lack reliable internet access, highlighting the persistent digital divide. To capitalize on these opportunities and navigate these challenges effectively, higher education institutions must remain agile and innovative, continuously adapting to the evolving needs of students and the market.

What will be the Size of the Higher Education Market during the forecast period?

Request Free Sample

The market continues to evolve, with dynamic market activities unfolding across various sectors. Student support services, such as continuing education and financial aid, remain crucial in ensuring student success. Curriculum development and research collaboration are key areas of focus for higher education institutions, driving the need for instructor training and campus infrastructure improvements. Digital literacy and educational technology are increasingly integrated into degree programs, from bachelor's degrees to doctoral degrees, with online courses and blended learning becoming more prevalent. Digital archives and online libraries provide essential resources for students and faculty, while research funding and tuition fees shape the financial landscape.

Retention rates and graduation rates are essential metrics, with career services and alumni relations playing a crucial role in student engagement and post-graduation success. As of 2023, the average first-year retention rate in U.S. colleges was around 76%, while the six-year graduation rate stood at approximately 64%, highlighting the ongoing need for stronger student engagement and support systems. Personalized learning, gamified learning, and adaptive learning are innovative approaches to teaching and learning, while faculty development and e-learning platforms support the ongoing professional development of educators. K-12 education and international students contribute to the diversity of the higher education landscape, with joint degree programs, associate degrees, and certificate programs offering flexible educational paths. Intellectual property, learning analytics, and faculty recruitment are critical areas of focus for institutions seeking to stay competitive in the ever-changing educational landscape. Learning analytics adoption has grown by 35% over the past three years, enabling institutions to make data-driven decisions about curriculum design, student performance, and resource allocation.In this dynamic market, higher education institutions must continually adapt to meet the evolving needs of students and the workforce. From curriculum development to faculty training, digital resources to student support services, the ongoing evolution of the market is shaping the future of education.

How is this Higher Education Industry segmented?

The higher education industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Learning Method

  Online
  Offline
  Hybrid


End-user

  Private colleges
  State universities
  Community colleges


Geography

  North America

    US
    Canada


  Europe

    France
    Germany
    UK


  APAC

    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Learning Method Insights

The online segment is estimated to witness significant growth during the forecast period.

The market is experiencing significant changes as institutions adapt to evolving student needs and technological advancements. Online courses are becoming more prevalent, with platforms transitioning from static content delivery to interactive, immersive environments. Digital tools, such as real-time collaboration features, virtual classroom experience

United States Construction VIP: Public: SL: ED: Higher Education (HE) data was reported at 1.995 USD bn in May 2018. This records an increase from the previous number of 1.837 USD bn for Apr 2018. United States Construction VIP: Public: SL: ED: Higher Education (HE) data is updated monthly, averaging 1.480 USD bn from Jan 1993 (Median) to May 2018, with 305 observations. The data reached an all-time high of 2.587 USD bn in Jun 2015 and a record low of 0.433 USD bn in Jan 1993. United States Construction VIP: Public: SL: ED: Higher Education (HE) data remains active status in CEIC and is reported by US Census Bureau. The data is categorized under Global Database’s USA – Table US.EA001: Value of Construction Put in Place (VIP): Current Price.

Higher Education Market Outlook

According to our latest research, the global higher education market size reached USD 94.5 billion in 2024, reflecting robust momentum across key regions. The sector is experiencing a notable expansion, with a compound annual growth rate (CAGR) of 10.7% projected from 2025 to 2033. By the end of 2033, the market size is forecasted to reach USD 239.7 billion, underscoring the substantial investments and innovation reshaping higher education worldwide. This impressive growth trajectory is primarily fueled by the rapid adoption of digital learning platforms, increased government spending on education infrastructure, and the rising demand for accessible and flexible learning solutions.

One of the primary growth factors driving the higher education market is the accelerated digital transformation within academic institutions. The proliferation of smart devices, high-speed internet connectivity, and advanced educational technologies has enabled universities and colleges to deliver content more efficiently and interactively. Institutions are increasingly integrating artificial intelligence, machine learning, and data analytics to personalize learning experiences, track student progress in real-time, and enhance administrative efficiency. These technological advancements are not only improving student engagement but also facilitating broader access to quality education, especially in remote and underserved regions. The growing emphasis on lifelong learning and upskilling is further boosting the demand for flexible, on-demand educational content, thereby propelling market growth.

Another significant factor contributing to the expansion of the higher education market is the evolving landscape of student demographics and expectations. Modern learners, including working professionals and international students, are seeking programs that offer flexibility, affordability, and career relevance. This shift has led to the rise of online and blended learning models, which allow students to balance their academic pursuits with personal and professional commitments. Additionally, universities are collaborating with industry partners to offer specialized courses and certifications aligned with labor market needs, thereby enhancing employability and workforce readiness. The increasing global mobility of students, coupled with the recognition of international qualifications, is also driving demand for diverse and inclusive educational offerings.

Government initiatives and policy reforms play a crucial role in shaping the higher education market's growth trajectory. Many countries are prioritizing investments in digital infrastructure, research and development, and faculty training to strengthen their higher education systems. Public-private partnerships are emerging as a key strategy to bridge funding gaps and promote innovation in curriculum design, assessment methods, and student support services. Furthermore, the expansion of scholarship programs, student loan schemes, and cross-border education agreements is making higher education more accessible to a wider population. These efforts are particularly evident in emerging economies, where governments are striving to enhance the quality and global competitiveness of their higher education institutions.

From a regional perspective, Asia Pacific is emerging as a powerhouse in the global higher education market, driven by the increasing enrollment rates, rapid economic development, and rising investments in educational infrastructure. North America and Europe continue to dominate in terms of technological adoption and research output, while the Middle East & Africa and Latin America are witnessing steady growth supported by government reforms and expanding youth populations. The regional dynamics are further influenced by factors such as language diversity, regulatory frameworks, and cultural attitudes towards education, resulting in distinct market trends and opportunities across different geographies.

Component Analysis

The higher edu

There were approximately 18.58 million college students in the U.S. in 2022, with around 13.49 million enrolled in public colleges and a further 5.09 million students enrolled in private colleges. The figures are projected to remain relatively constant over the next few years.

What is the most expensive college in the U.S.? The overall number of higher education institutions in the U.S. totals around 4,000, and California is the state with the most. One important factor that students – and their parents – must consider before choosing a college is cost. With annual expenses totaling almost 78,000 U.S. dollars, Harvey Mudd College in California was the most expensive college for the 2021-2022 academic year. There are three major costs of college: tuition, room, and board. The difference in on-campus and off-campus accommodation costs is often negligible, but they can change greatly depending on the college town.

The differences between public and private colleges Public colleges, also called state colleges, are mostly funded by state governments. Private colleges, on the other hand, are not funded by the government but by private donors and endowments. Typically, private institutions are  much more expensive. Public colleges tend to offer different tuition fees for students based on whether they live in-state or out-of-state, while private colleges have the same tuition cost for every student.

United States US: Government Expenditure on Tertiary Education: % of Government Expenditure on Education data was reported at 27.502 % in 2014. This records an increase from the previous number of 27.227 % for 2013. United States US: Government Expenditure on Tertiary Education: % of Government Expenditure on Education data is updated yearly, averaging 27.227 % from Dec 2010 (Median) to 2014, with 5 observations. The data reached an all-time high of 28.463 % in 2012 and a record low of 25.653 % in 2010. United States US: Government Expenditure on Tertiary Education: % of Government Expenditure on Education data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s USA – Table US.World Bank: Education Statistics. Expenditure on tertiary education is expressed as a percentage of total general government expenditure on education. General government usually refers to local, regional and central governments.; ; United Nations Educational, Scientific, and Cultural Organization (UNESCO) Institute for Statistics.; Median;

Community colleges in the US are undergoing a significant transformation, shaped by shifting student demand, economic pressures and volatile public policy in the wake of COVID. Between 2020 and 2025, community colleges have transitioned from pandemic emergency response to a phase of strategic recovery and adaptation. Following a dramatic enrollment decline during COVID-19, when students paused their education because of public health concerns, economic instability and the rapid transition to online learning, the industry is now experiencing a significant rebound. In spring 2025, two-year colleges saw a 5.4% surge in attendance, the strongest growth among all undergraduate settings. Several factors drove this growth: inflation and rising living costs made community colleges’ lower tuition more attractive, while skepticism about the value of a four-year degree prompted more students to seek affordable, flexible programs that quickly build in-demand skills. Despite rising enrollment, revenue has increased at a CAGR of 0.9%, reaching an estimated $75.2 billion in 2025, because most new students pay low tuition, state funding growth remains modest and operating challenges strain resources. As a result, colleges benefit from stronger demand without a corresponding boost in revenue or profit. Community colleges' policy and regulatory landscape is evolving rapidly at the federal and state levels. Recent federal actions, including the Trump administration’s elimination of race-based admissions practices and equity action plans, signal a move from earlier diversity and accountability requirements tied to federal funding. Persistent FAFSA processing delays and confusing changes have disrupted access to financial aid and uncertainty around Pell Grant structure and funding complicates efforts to support low-income students. State policy directions vary widely: while states like Ohio are imposing new restrictions on DEI initiatives and faculty rights, and New Jersey is contemplating a $20.0 billion funding cut, others like Illinois are expanding community colleges’ authority to offer bachelor’s degrees in high-demand fields. While ongoing policy reforms, demographic shifts and affordability concerns will continue to shape the industry, community colleges are poised to play a crucial role in broadening access to higher education and supporting targeted workforce growth. Colleges face strong tailwinds from increased demand for affordable, career-focused programs, growing interest in upskilling and new private-sector partnerships. However, uncertain funding, regulatory volatility and persistent financial aid challenges remain significant headwinds. Converting higher enrollment into stronger financial health will require stable resources, policy agility and ongoing innovation to serve a diverse student population. Overall, revenue is forecast to rise slowly at CAGR of 0.1%, reaching $75.5 billion in 2030.

This dataset is accessed from https://www.kaggle.com/jessemostipak/college-tuition-diversity-and-pay and was downloaded on August 4, 2021.

The following excerpt is from Kaggle regarding the sources of this dataset:

The data this week comes from many different sources but originally came from the US Department of Education.

Tuition and fees by college/university for 2018-2019, along with school type, degree length, state, in-state vs out-of-state from the Chronicle of Higher Education. Diversity by college/university for 2014, along with school type, degree length, state, in-state vs out-of-state from the Chronicle of Higher Education. Example diversity graphics from Priceonomics. Average net cost by income bracket from TuitionTracker.org. Example price trend and graduation rates from TuitionTracker.org Salary potential data comes from payscale.com.

This dataset included the following files:

1. diversity_school.csv

2. historical_tuition.csv

3. salary_potential.csv

4. tuition_cost.csv

5. tuition_income.csv

After data cleaning, the data in diversity_school.csv and tuition_cost.csv were merged and the data in salary_potential.csv and tuition_income.csv were merged. The combined datasets were then split based on the US Census Regions into West, Midwest, Northeast and South (https://www2.census.gov/geo/pdfs/maps-data/maps/reference/us_regdiv.pdf).