Vocational Schools, NEC

SIC 8249

Companies in this industry

Industry report:

This classification covers establishments primarily engaged in offering specialized vocational courses, not elsewhere classified. Also included in this industry are establishments primarily engaged in offering educational courses by mail. Offices maintained by such schools for the sale of correspondence courses are included. Excluded from this classification are beauty schools, barber schools, schools offering flight instruction, and schools offering academic training.

Industry Snapshot

Thousands of students have learned a new vocation, explored an avocation, or earned a certificate or degree from the establishments operating in this industry. Students can enroll in schools or correspondence courses that provide training in fields as varied as banking, commercial art, construction equipment operation, electronics, practical nursing, real estate, restaurant operation, and truck driving.

Vocational schools have existed for more than 200 years in the United States. Initially, a vocational education program was part of a high school education, but independent schools were established after the 1972 Education Amendments recognized technical education as part of postsecondary education. According to the U.S. Census Bureau, in 2010 there were 14, 881 technical and trade schools in operation in the United States, up almost 15 percent from 2009. Global market research firm IBISWorld estimated that together these institutions garnered $17 billion in revenues in 2011.

Organization and Structure

Vocational schools train students in hundreds of occupations, ranging from automobile mechanic to practical nurse. Programs emphasize hands-on training and use modern equipment and professional teaching techniques. Some schools maintain a variety of industrial contacts in order to keep up with the latest technology and better match the curriculum to job demands. Programs usually take between six months and two years to complete, and students who successfully complete a program typically receive diplomas or certificates. Almost all privately owned postsecondary training schools are approved by an accreditation agency.

Postsecondary training schools usually qualify for federal and state financial aid programs, and a large percentage of the students who participate in specialized trade programs receive financial aid.

Many institutions offer home study or correspondence courses. Variously called "distance learning," "alternative," "nontraditional," "external," and "off-campus" education, the field began to grow rapidly beginning in the mid-1970s. Home study provides an alternative for people who want to pursue an educational goal but do not want to sit in a classroom. The programs are particularly popular with the disabled, parents of young children, and people living too far away from an educational institution's campus to attend regular classes. Approximately 3 million students pursued their educational objectives each year through independent study during the late twentieth century.

Students can usually enroll at any time of the year and sometimes have as long as a year to complete a course. While students may enroll simply to learn about a particular subject, most often they take courses in order to improve their employability or upgrade their skills. Courses vary greatly in subject matter, skill level, and duration. These courses offer students the advantages of studying at their own pace and with a reduction in expense since there are no room and board or transportation costs.

In the past, correspondence courses were delivered solely by the post office. Technology changed this practice. Improved and less expensive telecommunications technologies contributed to increasing interest in distance learning education. By the 2000s, a vast majority of distance education was delivered via the Internet. Other means of delivery included cable or satellite television, videotapes/audiotapes, and various other modes of electronic delivery. Courses may be offered for credit, noncredit, or professional certification.

Privately owned and operated home study schools offer vocational correspondence programs, and U.S. colleges and universities offer numerous correspondence and distance learning classes. Private foundations, nonprofit organizations, and the U.S. military also operate correspondence schools. Students who complete correspondence or distance learning programs generally receive diplomas or certificates, although by the first decade of the 2000s people could earn associate, bachelor's, master's, and even doctorate degrees without leaving their home. In other cases, depending on the course, an institution may grant credits transferable to a formal degree program, an external degree, a certificate, or continuing education units (CEUs). The CEU is a nationally recognized system that provides a standard measure for acknowledging, accumulating, and transferring credit in continuing education programs. One CEU is considered 10 hours of participation in an organized continuing education course taught under qualified instruction.

The U.S. Department of Education recognizes several organizations that accredit institutions offering correspondence or distance learning programs. The National Home Study Council, six Regional Accrediting Commissions, and nationally recognized accrediting associations are among these organizations.

One of the most interesting aspects of vocational education has been its ability to keep pace with demographic and socioeconomic trends. As the booming economy in the late 1990s gave Americans more leisure time and money to spend, vocational education in home improvement and culinary arts soared, as did massage therapy, herbal medicine, landscaping, and gardening programs. One of the newest programs to enter the certification forum was in outdoor power equipment operation. By the late 1990s, 18 schools were either certified or had certification pending by the Equipment & Engine Training Council (EETC) for the outdoor power equipment industry. Industry certification of programs helped to bridge the gap between completing a vocational program and finding related employment.

By the early years of the first decade of the 2000s, students graduating from trade schools with certificates were carrying significant amounts of debt, just as those students graduating from four-year colleges. For the 2003-04 academic year, 21 percent of students graduating from trade schools had school loan debt, with $5,307 the average amount owed. By contrast, 77.5 percent of students earning certificates from four-year colleges that year owed money for student loans, but the amount was a comparative $5,705. Graduating with a bachelor's degree earned the average borrower $14,671 in loans.

The credit crunch of the late 2000s posed some challenges for the vocational school industry. As the economy slowed and lenders cut back on the number of student loans granted, some schools took on financing students themselves, a solution the Los Angeles Business Journal called " bold, costly and risky." Corinthian Colleges, for example, a provider of postsecondary job-oriented programs, raised its student financing debt from zero to $100 million in less than a year. By late 2008, 25 percent of the 1,250 accredited members of the Career College Association were financing their own students, as compared to just 5 percent a year earlier. Because vocational schools do not receive the endowments that many four-year colleges do, however, many did not have the funds to take on this role. Others saw financing their students as critical and found a way. As stated by Mitchell Fuerst, vice president of North-West College, "That's the business we're in; making sure we have students."

Current Conditions

In the early 2010s, trade and vocational schools were well poised to capitalize on the consequences of a down economy, especially unemployment. According to a 2012 IBISWorld report, "High unemployment has caused individuals to seek out further education, while employers are increasing their training requirements to remain competitive." These conditions were part of the cause of the 4.8 percent annual growth rate experienced by the industry from 2006 to 2011. IBISWorld expected that growth to continue into the mid-2010s, noting that "The increasing popularity of online courses will also contribute to revenue growth over the period."

The U.S. Bureau of Labor Statistics reported that employment in the trade and technical school industry stood at 157,170 in 2011, and about 50 percent of these employees held positions in teaching, training, or library occupations. The average annual wage for an instructor at such an institution was $50,170, although salaries varied depending on the field, with architecture teachers earning an average of $59,930 and those teaching education, $43,060.

Industry Leaders

Vocational training is among the many postsecondary education programs offered by Career Education Corp. (CEC), one of the leaders in the vocational education industry. Based in Hoffman Estates, Illinois, the for-profit company had $1.7 billion in sales in 2008 and 13,000 employees by 2011; almost 100 campuses around the world, including in the United States, Italy, France, and the United Kingdom; and about 90,000 students enrolled. In addition to certificate programs, CEC schools granted associate, bachelor's, master's, and doctoral degrees. In 2009, the company was recognized by InformationWeek for its use of technology, including its "campus-in-a-pocket" Mobile Learning (M-Learning) program and its Virtual Campus. According to Education Business Weekly, in the late 2000s, approximately one third of CEC students attended the Internet-based campuses of American InterContinental University Online and Colorado Technical University Online. Other brand names under CEC were Le Cordon Bleu Schools North America, Harrington College of Design, Brooks Institute, International Academy of Design & Technology, American InterContinental University, Colorado Technical University, and Sanford-Brown Institutes and Colleges.

Another dominant company in the industry in the early 2010s was ITT Educational Services Inc., based in Carmel, Indiana. It was one of the largest U.S. providers of technical education, with more than 70,000 students and 140 campuses in 35 states, as well as online programs, in 2012. Degrees included computer-aided design, engineering technology, and information technology, as well as master's of business administration and other business degrees. Some of the company's classes were offered exclusively online. ITT reported revenues of more than almost $1.5 billion in 2011 with 8,580 employees.

DeVry Inc. of Downers Grove, Illinois was also an industry leader. With annual revenues of more than $1.4 billion and 10,000 employees, DeVry offered health care, technical, and business programs in 95 U.S. locations. In 2011 the school enrolled about 85,000 students and offered most of its courses online.

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News and information about Vocational Schools, NEC

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