The New Business of Education-Tutoring Services
Monday, February 18, 2008SUSIE GHARIB: More and more these days, elementary and secondary education is extending beyond the classroom. For example, tutoring is now a $4 billion industry with millions of students signing up for tutoring services every year. Dana Greenspon tells us what's driving that part of the education industry and how companies, large and small, are benefiting.
DANA GREENSPON, NIGHTLY BUSINESS REPORT CORRESPONDENT: When ninth grader Amy Newman began struggling in math, her mother Anne added tutoring to the after-school equation. Newman says now Amy is getting an "A."
ANNE NEWMAN, AMY'S MOTHER: When you have somebody who is really just sort of hitting a bump, I knew it was going to probably be solved pretty quickly. Now they've moved on and started working on study skills, because her habits aren't that great.
GREENSPON: More and more students like Amy are getting help outside the classroom. It's a trend Newman encounters daily -- she's an education counselor at TutorFind, a small tutoring company in Manassas, Virginia. The 15-year-old firm has seen significant growth in its business over the past decade. Executive Director Debbie Bergeron says one major driver is busy kids and even busier parents.
DEBBIE BERGERON, EXECUTIVE DIRECTOR, TUTORFIND: So the pockets of time to actually do schoolwork are thinner and a lot of parents don't want to spend the time that they have with their kids fighting over schoolwork. And it's just easier to hire somebody who knows what they're doing, who can focus on something and get that job done and then when they're together, it's just much less stressful.
GREENSPON: Another factor that has propelled the entire industry is the No Child Left Behind Act. The law allows low-income children in failing schools to receive tutoring services, with the local government picking up the bill. The law has spurred growth across the industry. Major tutoring provider Sylvan Learning Centers has devised a program called "Ace It," specifically designed for students receiving government- sponsored tutoring. CEO Peter Cohen says the NCLB law has provided new opportunities for those operating a Sylvan franchise.
PETER COHEN, PRES. & CEO, SYLVAN LEARNING: It's a different business model. It requires a special focus and some of our franchisees have embraced that opportunity and have built a business that's as big as their Sylvan consumer business in the "Ace It" program.
GREENSPON: Another factor helping Sylvan is its reliance on local franchisees. The company has more than 1,100 centers in the United States and about 85 percent are franchises. Sylvan is now in the process of moving to a 100 percent franchise model. As college admissions become more competitive, Cohen says local ownership helps students succeed.
COHEN: When you have people who have grown up in a community or live in the community, may have their own children in the school system, they really understand the challenges of that school system, the challenges of those neighborhoods.
GREENSPON: Yet, as tutoring centers pop up in shopping centers across the country, the competition is also mounting, from both local operators and online companies, based as far away as India. That competition has been both a challenge and a blessing for small firms like TutorFind. While national companies like Sylvan and Huntington Learning Centers may be more visible, Debbie Bergeron says independent operators also benefit from their efforts.
BERGERON: Companies that can afford to advertise on TV, for example, well, they're pushing tutoring. And if somebody just goes to the phone book or to the Internet, they're going to find me. So there's a great possibility they're actually driving the tutoring industry and helping us grow.
GREENSPON: And with 10 percent growth in tutoring revenues expected this year, there is room for companies both big and small to multiply. Dana Greenspon, NIGHTLY BUSINESS REPORT, Manassas, Virginia.
