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September 19, 2019

Coming up the Learning Curve: The State of Adult Learning

MHT Partners  | Education Investment Bank

The importance of adult and continuing education has become increasingly clear in recent years. Rapidly changing technology and a growing population of low-skilled adults means there is substantive demand for better workforce development systems equipped to meet 21st century needs. While low government funding and high cost continue to act as a barrier for continued expansion, there are several other compelling factors that are paving the way for innovation in the alternative education space.

  • Highly Fragmented Industry. Perhaps one of the more attractive features of the adult education market is the lack of a clear leader. Few companies have managed to champion meaningful market share in the continuing education arena, and even fewer still address the overt need for adult remedial and developmental education solutions. Unlike its K-12 counterpart – where massive education technology companies like Pearson, K12, and Cengage reign unopposed – a fragmented market offers plenty of opportunity for smaller companies to innovate, compete and succeed.
  • Large Target Market. According to 2017 census data, approximately 27% of U.S. adults aged 25 and over hold only a high school diploma. Over 12% of those 26.5 million adults lack a high school degree(1). An even smaller fraction of the total pool of low-skilled American adults are currently enrolled or participating in a continuing education program, community college, or workforce development program (including adult basic education, ESL, HISAT, computer and financial literacy, and other job-based skills programs). Leveraging technology is a big opportunity to affordably scale these programs to reach the millions of adults in need of the basic education and skills critical to boosting employability.
  • Less Legislation. The U.S. currently spends approximately $10 billion per year on adult education (only $200 million of which is spent on digital materials) (2), compared to an annual spend of over $650 billion on K-12 education services. While only a small piece of the overall education expenditure pie, lower vested interest in the space means that there is little regulation required to adopt new policies and practices, and more room for disruptive innovation. An example is mobile learning: whereas use of smartphones is still gaining adoption in the K-12 classroom setting, mobile learning among adults can serve as a convenient, affordable, and simple learning solution. One favorable piece of legislation affecting this industry is the Workforce Innovation and Opportunity Act (WIOA). Administered by the Education Department, Title II of the WIOA – the Adult Education and Family Literacy Act – federally mandates a focus on integrating technology into adult basic education and career pathways programs in a manner sufficient to help adult learners improve basic skills and gain college credits. Alternative education providers can use these publicly available plans to create or adopt new content and delivery models that support the WIOA’s core purpose.
  • Demand for Upskilling. Continuing education is also more flexible to adapt to employers’ projected needs. Rapid developments in technology and innovation continue to alter the knowledge and skills necessary to enter the workforce, with a focus on digital and financial literacy. Companies operating on an international scale may also benefit from career development programs tailored to foreign language, communication, and cultural sensitivity training. That said, there is significant opportunity for education providers to partner with employers to create customized career pathways programs that satisfy demand for industry-specific talent.
  • Flexibility of Coursework. Adult learners are likewise able to tailor their own personal education experiences such that they gain the skills and knowledge relevant to their personal goals. Online education also presents a flexible alternative to the traditional, face-to-face method of learning; adult education providers can offer a variety of learning options (self-paced, blended, and online learning) during nontraditional hours of operation to serve adult students otherwise busy with work and family obligations.

If you would like to learn more about MHT Partners, a leading education investment bank, please e-mail Shawn D. Terry (sterry@mhtpartners.com), Alex Hicks (ahicks@mhtpartners.com) or Rebecca Bell (rbell@mhtpartners.com).

(1). Adult Education Comes of Age (EducationNext)
(2) Accelerating Change: A Guide to the Adult Learning Ed-Tech Market

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