Published Online: February 12, 1997

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Economists and others toss around some pretty big numbers when describing the amount of money spent by the nation each year on education. One frequently mentioned figure is $650 billion, nearly 10 percent of the gross domestic product.

But what is the size of the growing education industry, those for-profit companies that run schools or offer educational services and products?

A new estimate is that such companies took in more than $52 billion in revenue last year. The figure comes from EduVentures Inc., a Boston firm engaged in investment banking and consulting services in education.

EduVentures says in a new research brief that revenue for the education industry is growing at a rate of 25 percent a year.

The firm divides the for-profit industry into three sectors: educational products, education services, and schools.

The products sector includes publishers of educational software and textbooks, which had revenues of $21.2 billion last year, the brief says.

The services sector had revenues of $15.3 billion. This sector includes training companies, as well as businesses that provide remediation, language instruction, and services to at-risk and troubled youths.

The schools sector includes child-care companies, managers of for-profit private schools and privately managed public schools (such as the Edison Project), and for-profit postsecondary institutions. This sector had 1996 revenues of $16.1 billion.

EduVentures says K-12 proprietary schools are "growing and expanding into new markets." And, the firm says, the growth drivers for companies providing services to at-risk children include a dramatic increase in youth crime, the high cost of government-run special education, and the so-called baby boom echo.

Ryder Public Transportation Services Inc., one of the nation's largest private school-bus operators, has acquired Larson Transportation Services Inc. and School Bus Services Inc. of Gresham, Ore.

Larson and SBS provide student bus services in California, Idaho, Oregon, and Washington. The companies were owned by Leland E.G. Larson, who is retiring. Terms of the purchase were not announced.

Ryder Student Transportation Services, a unit of Miami-based Ryder System Inc., now operates more than 9,100 school buses serving more than 350 districts in 23 states.

--MARK WALSH mwalsh@epe.org

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