2007 k12 Private Tutoring

Instruction for Hire: A Survey
of the Private Tutoring Market
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TA B L E
OF
CONTENTS
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Market for Private Tutoring Services . . . . . . . . . . 4
Anatomy of the Private Tutoring Purchase Decision . .11
Emergence of Online Tutoring . . . . . . . . . . . . . . . . .16
Parting Thoughts on Private Tutoring . . . . . . . . . . . .19
Instruction for Hire:

A Survey of the Private
Tutoring Market
By Tim Wiley
January 2007
Copyright 2007 Eduventures, LLC | Reproduction Prohibited
Appendix A: Research Methodology . . . . . . . . . . . . . 20

Appendix B: Representative Private
Tutoring Providers . . . . . . . . . . . . . . . . . . . . . . . . . . 22
For more than a decade, Eduventures has been

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education market research, consulting services,
and peer networking. Our clients include
senior administrators and executives from
leading educational institutions and companies
serving the K-12, higher education, and
corporate learning markets, as well as decisionmakers in government agencies and the
investment community. Additional
information can be found at
www.eduventures.com.
page 2
EXECUTIVE SUMMARY
Private, consumer-based tutoring is one of the most dynamic education-related markets
today. At $2.2 billion, it was also one of the largest education markets in the 2005-06
school year. More than 1.9 million students spending an average of almost $1,160 per year
constituted the market for private tutoring. Hundreds of providers employing multiple
delivery methods and business models serviced the market in 2006.
Although private tutoring covered a wide array of subjects in the 2005-06 school year, test
preparation was the most common area of tutoring, followed closely by math and reading.
Science, however, likely will be the fastest growing tutoring subject of all over the next
three years as the impending requirement of the No Child Left Behind Act (NCLB) to
measure schools progress in science along with reading and math increases the publics
attention on that subject.
The emergence of online tutoring over the past decade is a disruptive innovation that
promises to significantly alter the nature of the tutoring market in the coming years.
Spending on private online tutoring totaled $115 million during the 2005-06 school year,
or 5% of the total private tutoring market. Although a convergence of social, economic,
and technological developments in recent years has spurred the growth of online tutoring,
challenges to future growth remain formidable. Online tutoring providers will have to
address issues related to effectiveness, access, and credibility if they are to succeed in this
burgeoning market.
In Instruction for Hire: A Survey of the Private Tutoring Market, Eduventures assesses the
privately funded tutoring market, identifying the markets unique characteristics, trends,
challenges, and opportunities. The report will help company executives enhance their
understanding of parents decision-making processes and take advantage of relationships
discovered between criteria parents use to make a purchasing decision. Eduventures
research and analysis draws on a survey of almost 2,000 parents of school-aged children;
further details regarding the report methodology are in Appendix A. Eduventures
previously published Educational Reinforcements: An Examination of Publicly Funded Tutoring,
a companion study that examined the market for school-based tutoring, including the
federal Supplemental Educational Services program.
page 3
THE MARKET FOR PRIVATE

TUTORING SERVICES
Private tutoring offers a compelling and timeless value proposition: giving parents the
opportunity to help their school-aged children achieve academic and lifelong success.
Consequently, the market as a whole has demonstrated remarkably consistent growth since
the advent of the modern K-12 education system.
The private tutoring market is insulated from the political winds that batter publicly
funded tutoring, but is still subject to external shocks. The most recent demand shock to
the private tutoring market was the revamping of the SAT in 2005. As parents learned of
the impending changes throughout the 2004-05 school year, private tutoring enrollments
spiked, largely in the form of test preparation. The result was that the private tutoring
market had a record 2.2 million students engaged in academic tutoring in the 2004-05
school year.
The following year, however, enrollments underwent the expected correction and decreased
15% to 1.9 million students. Over the two years, average spending per student increased
5.9% to $1,160, tempering the total drop in market size to 10%, from $2.50 billion in
2004-05 to $2.23 billion in 2005-06.1 Because this market correction was largely the
result of changes to the SAT, the most severe tightening occurred, as expected, in the
market for test preparation services.
1 Through this research, Eduventures found that 9% of parents who purchased private tutoring services also purchased
supplemental tutoring materials through the tutoring provider, constituting a separate market of approximately
$40 million.
page 4
Instruction for Hire: A Survey of the Private Tutoring Market
FIGURE 1. PRIVATE-PAY TUTORING MARKET SIZE, 2004-05 2007-08F
Market size
Enrollments
$3.0
2.5
2.2
Market Size (billions)
1.9
2.0
$2.0
1.5
$1.5
1.0
$1.0
0.5
$0.5
$2.5
$0.0
Enrollments (millions)
1.9
$2.5
2.0
2004-05
$2.2
$2.3
2005-06
2006-07F
School Year
$2.5
2007-08F
0.0
Source: Eduventures analysis
To reiterate, this one-year drop in market size is not indicative of a long-term trend, but is a
correction as a result of the spike in enrollments attributable to the revamped SAT. Market growth
rates over the several years prior to the 2004-05 school year ranged between 4% and 9% per year,
driven mostly by increased competition in college admissions.
Private Tutoring Vital Signs (as of July 2006)

Student enrollments:
1.9 million
Average spending per enrollment:
$1,160
Market size:
$2.23 billion
One-year growth rate:
-10%
1996-2006 CAGR:
6.5%
Customer loyalty toward any given private tutoring provider has always been relatively weak, and
customer churn was particularly noticeable after the 2004-05 school year. According to
Eduventures research, 57% of students in grade 11 or below involved in tutoring during the
2004-05 school year enrolled in tutoring again in 2005-06. Of those students, 67% renewed with
the same provider. Although providers will always have to deal with students who drop out of
tutoring entirely, this lackluster renewal rate indicates that incumbent providers do not necessarily
have a strong advantage in what is perceived to be a heavily relationship-based business.
Providers may benefit from examining their customer retention patterns and proactively
addressing any shortcomings.
page 5
Composition of the Private-Pay Tutoring Market

Although tutoring has been associated primarily with one-on-one instruction with the significant
exception of test preparation courses in recent years many providers have started to offer small
group tutoring programs. These groups can range from three students per tutor, to situations where
the group approaches a 10-to-one ratio. The trend of expanding class sizes is driven both by
increasing competition around price points and students interest in being tutored in a more social
environment. The downside to larger class sizes is less flexible scheduling, inevitably resulting in
some degree of attrition. Figures 2, 3, and 4 illustrate the distribution of the instructional model,
location, and time frame of the private-pay tutoring programs in which students were enrolled in
the 2005-06 school year.
FIGURE 2. DELIVERY METHODS OF TUTORING IN 2005-06
Online
(i.e., Internet-based)
6%
Large-group instruction
(10 or more students per instructor)
8%
One-on-one
instruction
55%
Small-group instruction
(fewer than 10 students per instructor)
31%
Source: Eduventures analysis; n=89
FIGURE 3. LOCATIONS IN WHICH TUTORING TOOK PLACE IN 2005-06

Summer camp
6%
Other organizations site
(e.g., library, religious institution, etc.)
8%
On school grounds
10%
Tutoring providers site

52%
Student's home
24%
page 6
FIGURE 4. TIME OF YEAR STUDENTS PARTICIPATED IN TUTORING IN 2005-06

During the summer on a weekend
4%
During the summer on a weekday

19%
After school hours

during the week
59%
On a weekend
during the school year
19%
One of the fiercest and most persistent competitors of established tutoring companies is the
individual tutor. Often marketing through flyers posted on telephone poles and taking on a
handful of students at a time, these individuals tutored 24% of all students enrolled in tutoring
during the 2005-06 school year. For comparison, the top five national providers had combined
enrollments that constituted 29% of all private tutoring.
FIGURE 5. PRIVATE TUTORING MARKET SHARE BY STUDENT ENROLLMENTS IN 2005-06
K-12 teachers,
higher education institutions
7%
Sylvan
SCORE!,
The Princeton Review,
Kumon,
Huntington Learning
29%
Individual tutors
25%
Other tutoring companies

40%
Source: Company documents (SEC filings and press releases); Eduventures analysis
page 7
On average, individual tutors were able to charge slightly more than established tutoring
companies, as their revenues accounted for 25% of the total private tutoring market. This slight
premium may be explained by more specialized instruction and individualized attention.
Unfortunately for established tutoring companies, this competitor maintains a truly unassailable
position, short of any regulatory interference. Because the business model is inherently not scalable,
however, the market share of individual tutors is not likely to shift substantially.
During the 2005-06 school year, most private-pay tutoring was delivered in three areas: test
preparation, reading, and math. Test preparation was the most common area of tutoring, with 29%
of students actual tutoring time devoted to it, followed by math (24%), and reading (18%). All
other tutoring subjects combined accounted for just 27%.
FIGURE 6. DISTRIBUTION OF PRIVATE-PAY TUTORING BY STUDENT TIME
Writing 8%
Test prep
29%
Other
27%
Homework help 7%
Study skills 5%
Science 4%
Foreign language 3%
Math
24%
Reading
18%
Science, however, likely will be the fastest growing tutoring subject over the next three years as
NCLBs impending requirement to measure schools progress in science, in addition to reading and
math, increases the publics attention on this subject. Eduventures expects science to account for
10% of all private tutoring by 2009, implying a growth rate of approximately 30% per year. Test
preparation and reading will remain strong, but some math tutoring may shift to science as an
applied form of math. Worth noting is the absence of tutoring tied to English as a second
language, which accounted for less than 1% of all tutoring.
In terms of grade distribution, private tutoring tends to concentrate in high school, based on both
enrollments and market value.
page 8
FIGURE 7. DISTRIBUTION OF TUTORING ENROLLMENTS AND MARKET VALUE BY GRADE IN 2005-06
% by Enrollments
25%
% by Market Value
20%
23%
21% 21% 21%
20%
15%
15%
10%
9%
5%
5%
4%
2%
1%
1%
2%
8% 8%
8%
6%
4%
4%
2%
1%
3%
1%
6%
2% 2%
0%
K
10
11
12
Grade
Based on Eduventures research, grade 12 tutoring had one of the largest shares in terms of student
enrollments, yet a considerably smaller share in terms of market value. This factor is most likely
attributable to the amount of tutoring that 12th graders sat through on average. The data show
that, even compared to just their schoolmates in grade 11, 12th graders signed up for tutoring in
just as many numbers and spent nearly as much per hour of tutoring, but attended almost 45%
fewer hours. Apparently, students in grade 12 front-loaded whatever tutoring they signed up for
before settling into the senior slump. In contrast, tutoring in grade 8 commanded a significant
premium, most likely attributable to the value parents placed on preparing their children for high
school. This distribution is influenced significantly by test preparation services, a segment that
warrants closer examination.
A Closer Look at the Test Preparation Market

In the 2005-06 school year, including summer 2005, the delivery of K-12 test preparation services
was a $527 million market. As mentioned earlier, the overall drop in the tutoring market from the
previous year was felt most severely in the market for test preparation. By itself, test preparation
represented almost 80% of the total market drop.
In reality, test preparation is almost exclusively focused on grades 9 to 12, which accounted for
$507 million, or 96% of the total market segment value. Students in grade 11 alone accounted for
$290 million, or 55% of all money spent on test preparation, even though this grade only
represents 35% of all enrollments. Thus, in light of what parents value most, test preparation is
nearly synonymous with preparation for college entrance exams.
page 9
FIGURE 8. DISTRIBUTION OF HIGH SCHOOL TEST PREPARATION ENROLLMENTS AND MARKET VALUE
BY GRADE IN 2005-06
60%
% by Enrollments
50%
% by Market Value
55%
40%
35%
29%
30%
22%
20%
12%
12%
12%
7%
10%
0%
9
10
11
12
Grade
In terms of enrollments, however, high school students do not have quite as large a share of the
market as they do of the dollar value. Thus, the students themselves are distributed slightly more
evenly than the spending, reflecting the fact that parents are open to hiring private tutors to
support test preparation needs for their children in any grade.
Will Publicly Funded Tutoring Cannibalize Private Tutoring?

To providers of fee-for-service tutoring in an education market dominated by NCLB, it can be
difficult to look beyond recent headlines proclaiming the explosive growth of free tutoring through
the Supplemental Educational Services (SES) program. Student participation in the federal program
has increased steadily since its creation in 2002, with more than half a million students enrolled in
SES across the country during the 2005-06 school year. Upward of 3,000 entities have been
approved to provide SES, ranging from venerable tutoring corporations to mom-and-pop outfits to
school districts themselves.2 Naturally, consumer-oriented tutoring providers have a keen interest
in understanding what effect this phenomenon will have on their businesses.
Based on careful analysis of this research studys findings, Eduventures expects that SES will pose
little threat to private tutoring programs. The demographics of the two markets are simply too
dissimilar to lead to cannibalization. For example, households with students enrolled in SES in
2006 had a median income between $50,000 and $75,000, whereas households with students
enrolled in private tutoring had a median income between $100,000 and $150,000. Furthermore,
students enrolled in private tutoring generally do not qualify for SES even when their school does.
Most conclusively, our survey revealed no evidence of defection from private to SES tutoring over
the last two years. That is, no student in the research sample that participated in private tutoring
in the 2004-05 school year subsequently participated in SES tutoring the following year.
2 See Eduventures Educational Reinforcements: An Examination of Publicly Funded K-12 Tutoring for more details.
page 10
ANATOMY OF THE PRIVATE

TUTORING PURCHASE DECISION
Tutoring is a pervasive business, taking many different forms and covering numerous
subjects. One common theme that cuts across all aspects of private tutoring, however, is
the irrefutable influence parents have on the market. Eduventures surveyed the parents of
almost 2,000 school-aged students to better understand their decision-making process.
Eduventures research focused on three phases comprising parents decision-making process
around private tutoring services:
n
n
n
Rationale for services

Key sources of information
Principal evaluation criteria
Each of these phases is explored below, drawing on insights from survey respondents.
Parents Rationale for Private Tutoring Services

Parents stated reasons for enrolling their children in test preparation-oriented tutoring
services centered on one consistent goal to improve and expand the postsecondary options
available to their children. As one parent said, All the students at my childs school are
taking exam review courses, and [my child is] forced to compete with those students for
the same college freshman spots. In response, parents emphasized their willingness to
spend more time and money on helping their children prepare for college entrance exams
(i.e., the SAT or ACT). Some parents felt that test preparation courses were useful not only
for imparting test-taking strategies but also for increasing specific, relevant content
knowledge.
For private tutoring services other than test preparation, parents gave more varied reasons
for enrolling their children in programs. Although the general goal of attending non-test
preparation tutoring programs was to increase academic achievement, what this actually
meant to parents diverged among respondents and includes examples such as:
n
n
n
n
n
To catch up academically at a new school

To supercharge the educational experience with individualized attention
To get remedial help when the child did not qualify for SES
To provide self-confidence, goal-setting skills, and a zest for learning to achieve
a higher potential
To teach the fundamentals that the school system did not
page 11
Thus, whether parents are interested in stretching the upper limits of their childrens learning
experience, or simply seeking out a means to provide what they feel is a minimum level of
education, private tutoring presents a compelling value proposition that appeals universally to the
nearly 28 million households with school-aged children.
Key Sources of Information for Parents

Parents ostensibly choose a particular tutoring program or provider for their children after
thoroughly evaluating information obtained from many different sources. Based on the findings of
this research study, Eduventures was able to understand which sources of information were most
influential with parents. Above all other sources of information, parents judged personal opinions
obtained by word of mouth as the most useful source of information when forming their first
impression of private tutoring providers, cited by 60% of parents.
FIGURE 9. SOURCES OF INFORMATION PARENTS USE TO LEARN ABOUT TUTORING PROGRAMS AND
PROVIDERS
Newspaper or magazine articles
4%
Other 1%
Independent research studies

6%
No useful source of information

13%
Other parents or neighbors

30%
Providers' brochures,
advertisements, or Web sites
17%
School administrators or teachers

29%
Source: Eduventures analysis; n=128, multiple responses permitted
Looking closer at the sources of information parents used to learn about available tutoring options,
several noteworthy findings emerged from the data. For instance:
n
Other parents or neighbors represented the single most important source of

information (30%), while school administrators or teachers came in a close second (29%).
Thus, although word of mouth in general served as the most prominent source of
information, parents were open to a range of sources of personal advice and
recommendations.
Parents placed significant value on providers tangible marketing efforts, which

were listed as most useful by 17% of parents. Fortunately, this is one of the accessible
mechanisms a provider can use to stimulate demand for its programs.
page 12
Almost one in seven parents (13%) felt that there was no useful source of
information for the private tutoring market other than their own intuition. Stated
another way, this finding indicates that a significant number of parents do not proactively
seek out information on the market, but rather passively absorb information, upon which
they base their selection of a program and provider.
Key Evaluation Factors

Similar to their accessing tutoring information from multiple sources, parents considered a range of
factors for evaluation in making a final decision. Quality of both the providers instructors and
instructional material and convenience were the most important factors to parents; in
combination, these two issues represented almost half of all top responses given by parents.
FIGURE 10. IMPORTANCE OF FACTORS PARENTS USED TO EVALUATE PRIVATE TUTORING PROGRAMS
AND PROVIDERS
17%
Providers location or hours were most convenient
20%
16%
Quality of the instructional materials used
11%
15%
Quality of the providers tutors
8%
11%
13%
Provider was deemed trustworthy and reputable
11%
Other parents recommended the provider
16%
9%
Teacher or school administrator recommended the provider
11%
7%
6%
5%
5%
Provider tutored one of their children in the past

Providers advertising was most convincing
2005-06
2004-05
3%
Provider offered online or computerized tutoring
5%
6%
Other
3%
0
10
15
20
25
% of Respondents
In addition, parents considered advice or recommendations obtained by word of mouth, including

personal recommendations from school administrators, teachers, and other parents, the most
important decision-making factor 20% of the time.
Looking at the evaluation factors between the 2004-05 and 2005-06 school years, the most
significant trend was the increased importance parents placed on perceived quality, both in terms
of instructors and instructional materials. The percentage of parents who ranked either of those two
aspects of quality as most important jumped from 19% in 2004-05 to 31% in 2005-06. When
pressed to specifically define the concept of quality, parents tended to associate quality of tutors
with expert knowledge of subject matter and strong interpersonal skills with the students. With
respect to quality of instructional materials, parents mentioned such factors as the materials ability
to engage students and supplement, though not necessarily align with, the schools curriculum.
page 13
Across the same time period, the importance of personal recommendations in selecting a tutoring
provider decreased significantly, from 27% in 2004-05 to 20% in 2005-06. One possible
explanation for this shift was the modification of the SAT in 2005. As parents learned of the
impending changes to the college entrance exam in the 2004-05 school year, many of them likely
turned to other parents and school officials to try to decipher what the changes meant to their
children. Consequently, parents may have placed more importance on word-of-mouth
recommendations in that year, only to return to an average degree of importance the following year.
A Closer Analysis of Parents Purchasing Decision Process

Beneath this studys top-level findings were telling correlations between various factors that
parents deemed valuable or not. Based on the decision-making factors expressed in the 2005-06
school year, these correlations indicate that purchasers of private tutoring services generally fall
into disparate camps with markedly different values and priorities. For example:
n
Parents who valued the personal recommendations of other parents most were
in a separate camp from those who valued the quality of instructional materials.
Likewise, parents tended to value either the personal recommendations of

school administrators and teachers or the convenience of location, but
not both.
Parents whose children were tutored in the past by a particular tutoring provider
tended to not value tutoring providers advertising.
Such inverse correlations between evaluation factors were more characteristic of the decisionmaking process of parents than any positive correlation. That is, while parents in total actually
valued a wide array of factors, each parent tended to feel very strongly about whatever particular
factor they personally valued most. Providers may want to remain cognizant of these distinctions
and apply them to their marketing and outreach efforts.
One noteworthy finding was a correlation that was not found in the data total spending on
private tutoring was not correlated at all with household income. In fact, the amount of money
parents spent on tutoring was largely independent of all the factors examined for this study. That
is, parents generally did not pay a premium for any particular feature they indicated was valuable
to them quality of tutors, type of instructional material, convenience, reputation, or advertising.
There were, however, three key exceptions to this general correlation:
n
A slight connection existed between choosing a provider based on the opinion of other
parents and paying more for that provider. The connection, however, was not
statistically significant and although logically sound only should be considered
anecdotal evidence.
Another exception was that parents who valued the opinion of community groups,
including religious organizations, also tended to spend less in total on tutoring. This
page 14
trend may be explained by the prevalence of free or low-cost tutoring provided by these
community groups and religious organizations.
n
The third exception dealt with parents who valued online or computerized instruction.
These parents tended to pay less both in total amount spent and amount spent per hour
of instruction.
Based on these findings, tutoring providers will want to ensure they have clearly identified the
underlying motivation of their customer segments. Are customers driven largely by word of
mouth? Or do they fall in the group that places more value on quality instructional content? By
understanding this distinction, and by corroborating this research with follow-up market studies,
tutoring providers stand the best chance of creating an optimal marketing mix.
page 15
EMERGENCE OF ONLINE TUTORING

The emergence of online tutoring over the past decade is one disruptive innovation that
promises to significantly alter the nature of the tutoring market in the coming years.
While tutoring traditionally has been based on face-to-face interaction, new collaborative
technologies such as Voice over Internet Protocol (VoIP), video streaming, and virtual
whiteboards have expanded the way in which tutoring can be effectively delivered. Taking
advantage of anytime, anywhere instruction, online tutoring is making the greatest inroads
among the population of digital natives in rural communities.
Online Tutoring Market Overview

Approximately 108,000 students signed up for private online tutoring during the 2005-06
school year, or 6% of all students enrolled in any kind of private tutoring nationwide.
Spending on private online tutoring totaled $115 million during the 2005-06 school year,
or 5% of the total private tutoring market. On average, online programs charged slightly
less than their onsite, face-to-face counterparts.
Because online tutoring has grown to its present size from zero in only the last few years,
growth rates are not statistically meaningful. Looking forward, however, Eduventures
expects private online tutoring to grow to 10% of total students and 8% of total spending
in the private tutoring market by 2009, implying an average market growth rate of
approximately 15% per year.
Online Private Tutoring Vital Signs (as of July 2006)

Student enrollments:
108,000
Average spending per enrollment:
$1,064
Market size:
$115 million
2006-09 CAGR forecast:
15%
From a subject area perspective, private online tutoring is less focused on test preparation
than is in-person tutoring. About 20% of online tutoring dealt with test preparation
compared to 29% for in-person. Reading represented approximately 30% of online
tutoring, compared to nearly 18% for in-person tutoring.
page 16
Enablers of Online Tutoring

In the private tutoring market, online tutoring expands the delivery methods available to providers
and students, creating fertile ground for new business models. Although the effectiveness of these
delivery methods is questioned by some, most students today are comfortable with the computer
interface and view computer screens even the smallest handheld screens differently than the
generation that preceded them. The growth of online tutoring has benefited from a convergence of
social, economic, and technological developments:
n
Collaborative technologies have enabled rich interaction between tutor and tutee,
allowing for activities such as writing on electronic whiteboards to be shared across a
global network. Using VoIP, tutors and tutees can discuss lessons in real time at
practically no cost. A handful of tutoring companies already have built successful models
entirely around an interface enabled by collaborative technologies.
Web-enabled mobile phones promise to create a new medium capable of delivering

rich, multimedia instructional content. Although not yet in widespread use in tutoring
or even in virtual learning applications, the emergence of this technology already has
made an impact in commercial applications that could serve as an analogy to the
provision of tutoring.
Formative instruction systems have grown to be one of the most credible

examples of the practical application of formative assessment.3 While formative
assessment as a concept is well understood,4 applying that concept to the classroom
proved extremely challenging until technological developments allowed for greater
automation of teachers routine tasks. One such routine task is creating customized
follow-up activities to prescribe a student based on diagnosis of assessment data. Online
tutoring has emerged as one of the most innovative examples of such prescriptive
instructional activities; a connection will become more lucrative as formative instruction
applications spread.
Outsourced instruction is one of the most contentious developments in K-12

education today. Short of any new government regulation, however, the use of outsourced,
overseas tutors is likely to spur the growth of online tutoring the most over the next few
years. Online tutoring has made the physical location of the tutor immaterial, and
countries such as India and South Korea are home to many highly qualified, low-cost
tutors. On average, tutors based in India earn about $300 per month, or less than $2 per
hour for a typical 40-hour work week. In comparison, their U.S. counterparts start at
about $20 per hour with some specialized tutors earning $100 per hour or more. Some of
these overseas companies employ call centers to field students questions, while others
allow tutors to provide instruction from their homes. To improve effectiveness of their
offerings, some India-based tutoring companies train their teachers in the cultural and
communicative nuances of their American tutees.
3 See Eduventures Formative Instruction and the Quest for the Killer Application for more details.
4 For a thorough explanation of formative assessment, see: Boston, Carol (2002). The Concept of Formative Assessment.
Practical Assessment, Research & Evaluation, 8(9).
page 17
Challenges Facing Online Tutoring

Despite the hype and high growth rates associated with online tutoring, providers will need to
address several challenges as they develop online tutoring programs. Chief among these challenges
are the following issues:
n
Online interfaces risk losing the personal connection. The popular notion is
that computerized interactions are less engaging than in-person interactions, making
learning in such environments especially difficult. This notion has yet to be proven,
however, and overlooks the cultural particularities of the current generation of students.
Many students today are completely comfortable with a computerized form of
interaction. When students do exhibit a lack of motivation, it often may be attributable
not to the online interface, but rather to the overall experience. Employing the latest
technologies does not absolve providers of the imperative of designing a robust and
engaging curriculum. Even a cell phone display can engage students if the message is
crafted properly.
A majority of students lack high-speed Internet connections at home.

A 2005 U.S. Census Bureau report estimated that two-thirds of households had Internet
connectivity, but only half of those connections were high-speed, which would be
required to take full advantage of the technologies utilized by online tutoring. Thus, only
about one-third of K-12 students are able to engage in online tutoring from their home.
Providers may be able to mitigate this challenge by promoting expanded Internet access
points, such as in public libraries or other community centers, or partnering with highspeed Internet service providers to offer a bundled package. In some cases, the best
approach may be to maintain online tutoring as one element of a comprehensive approach
to tutoring that also includes offline delivery methods.
Concerns abound about the lack of transparency into tutors

credentials. Parents naturally are concerned about from whom their children learn
nowhere more so than with overseas tutors. To date, most concerns about the credentials
of these overseas tutors have been satisfied. According to one report, most Indian tutoring
companies guarantee that their tutors have at least an undergraduate degree in the
subject they teach, whereas not even a majority of full-time teachers in the United States
hold that qualification, let alone tutors.5 Nevertheless, providers need to continue
promoting this aspect of their business to parents who are inherently skeptical.
In light of this analysis, tutoring providers that to date have focused exclusively on face-to-face
tutoring may want to evaluate the potential benefits of establishing an online service offering.
Although online tutoring has pitfalls consistent with any new delivery method, many providers
have already concluded that in the near future online services will be integral to any successful
tutoring business model.
5 Overdorf, Jason. Tutors Get Outsourced. Business 2.0. August 2006: 32.
page 18
PARTING THOUGHTS ON
PRIVATE TUTORING
Effectively implemented, private tutoring has the potential to reinforce an education
system that is repeatedly assailed by its stakeholders. Although few parents (6%, excluding
those signing up for test preparation) explicitly cited their childs school systems failings
as the primary reason for hiring a tutor, more than half (52%) cited a specific subject- or
content-related shortcoming as being the main impetus. Whether this sentiment still can
be considered a general indictment of the U.S. school system is not the point; that tutoring
providers are well positioned to address this demand, however, is.
As in many other industries with heavy government involvement, the private sector often
proves adept at creating innovative solutions to persistently irksome problems. In the case
of K-12 education, most parents will inevitably find that publicly available education
options fall short of their expectations. Although revised federal and state education
policies aim to address such shortcomings in the long run, parents of school-aged children
do not have the luxury of drawn-out timeframes. Turning to private tutoring will
invariably improve parents immediate options at least for those who can afford it.
Although private tutoring as a whole is a mature, stable market, there exist numerous
dynamic pockets of opportunity for providers to develop, market, and profit from
innovative approaches to tutoring. Online tutoring currently has the spotlight, but it is
accompanied by other more down-to-earth approaches, such as helping public schools
address their most burdensome state and federal accountability requirements and
subsequently leveraging those relationships to get into students homes. One school
district in Wisconsin has enjoyed great success with such a model. Tutors based in India
remotely view classes along with the students in real time and then provide lesson-specific
tutoring to the students after class. The provider then offers extended private tutoring to
the students outside of school hours, which is paid for by parents. The long-term success of
any approach to private tutoring, however, depends entirely on how effectively it helps
achieve the primary goal of K-12 education: improving academic achievement.
page 19
APPENDIX A: RESEARCH METHODOLOGY

Private tutoring for K-12 students is defined as additional academic instruction that is
initiated and procured by a consumer as opposed to a school or school district. The bulk of
this type of tutoring is arranged by parents, but there are many exceptions such as
tutoring provided by community-based organizations, religious organizations, and even
corporations as an employee benefit.
Private tutoring can cover any number of possible subject areas, but for the purposes of this
research study, Eduventures limited it to traditional academic areas. The definition
provided to survey participants was:
instruction provided to students outside of their regular schooling by
individuals not employed by any school to: (1) increase knowledge of specific
subject areas, (2) prepare for some type of academic test (e.g., SAT, ACT,
graduation exams, etc.), (3) improve study skills, or (4) provide general homework
help. To count as private academic tutoring, the tutoring must not be paid for or
arranged by any school or school district.
Eduventures defines the test preparation market as sales by private providers of
supplemental services to help students prepare for standardized testing. Sales of test
preparation products, including workbooks, tutorials, and software, are not included in
this market. For the purpose of this research, test preparation was considered a subset of
tutoring.
To gain a better understanding of the market for publicly funded tutoring, Eduventures
based this research study on information collected from June to August 2006 from a
combination of primary and secondary research. Primary research included an original
survey of parents of school-age children as well as a number of interviews with senior-level
district administrators and tutoring company representatives. Secondary research included
a literature review of publicly available government reports, news reports, and third-party
reports.
page 20
For the primary survey, a total of 1,921 parents of 3,107 children ages 5 to 18 were selected
from a randomly generated nationwide sample. After qualifying, parents then were asked up to 20
questions to determine, among other things:
1. Frequency of participation in private tutoring
2. Reasons for choosing a particular tutoring provider
3. Details of tutoring services used
4. Expenditures on tutoring services and related materials
5. Likelihood of continuing tutoring services in the future
6. Frustrations and challenges with tutoring services and providers
The responses of the 1,921 parents surveyed were used to extrapolate the prevalence of private
tutoring, giving a maximum margin of error of 2.2% with a confidence level of 95%. Of those
respondents, a total of 117 parents were qualified to answer the full battery of questions pertaining
to private tutoring. The responses then were analyzed to derive the findings presented in this
report.
page 21
APPENDIX B: REPRESENTATIVE
PRIVATE TUTORING PROVIDERS
The following table is a representative list of companies that participate in the market
for private tutoring. Given the dynamic nature of the private tutoring market, this list
is not meant to be exhaustive, but rather to provide an overview of some notable
market participants.
page 22
Private
Growing Stars, Inc.

www.growingstars.com
CA
New Delhi, India
South Korea
FL
Online
Online
Online
Online; Individual
Individual; Small group
Online
Individual
TYPES OF DELIVERY
Low
Low
Low
Low
Low
Low
Low
Low
RELATIVE U.S.
MARKET
SHARE*
Launched by Sankyaa Learning, HeyMath! is a collaborative venture

between Nrich Online Maths Club and the Millennium Mathematics
Project of the University of Cambridge, U.K. It is an online educational platform focused on math for students in grades 5-12, as
well as professional development for math teachers.
Founded in 2002. Provides one-on-one tutoring and online

instruction for children in grades 3-12, where the tutors interact
live with the students. The company is based in Fremont, CA, and
operates teaching centers in Kochi, India.
Provides one-on-one online tutoring in math and science for

high school students. The sessions are done through the Internet
and with a Webcam. Mathguru is a division of Educomp
Solutions Ltd.
A Korea-based company founded in 1976 that offers early

childhood education, individual tutoring, and homeschooling to
students in primary and middle school. The company also publishes
teaching materials, offers online educational programs, and
operates institutes of education. It has expanded its services to
other countries including China, Japan, Malaysia, New Zealand, and
the United States. It is the flagship company of the Daekyo Group.
Offers individual tutoring at the students home or another

location of choice. Lessons are designed to complement students
educational and personal needs, identifying gaps in student
knowledge in order to create custom tutoring goals.
Offers career-oriented student services, institutional services

such as professional development for teachers and administrators,
and academic services including tutoring, content development,
and academic call center services based out of India to students
in any part of the world. INTEL Capital is a strategic investor in
the company.
Provides academic tutoring, test preparation programs, and

academic coaching at the companys locations or at the
students home.
Aims to deliver an individualized and flexible tutoring program.

Tutors work one on one or in small groups at the students home
or another location of their choice and are matched with students
based on needs and personality. Discounted prices are available for
low-income and military families and children of teachers and
social workers.
DESCRIPTION
* Relative U.S. market share based on Eduventures analysis of survey data, stated in terms of enrollments; high = more than 10%, medium = 1% to 10%, low = less than 1%.
Private/Public
(services sold to Chennai, India
schools)
Private
Public/Private
Daekyo Co., Ltd.

www.daekyo.com
Educomp Solutions Ltd. (Formerly

known as Educomp Datamatics Ltd.)
www.educomp.com
Public/Private
Club Z!
www.clubztutoring.com
HeyMath!
www.heymath.net
PA
TN
HEADQUARTERS
LOCATION
Private/Public
(services sold to New Delhi, India
schools)
Private
A+ Test Prep & Tutoring

www.aplustutoring.com
CareerLauncher.com
www.careerlauncher.com
Public/Private
TUTORING
TYPE
A To Z In-Home Tutoring
www.atoztutoring.com
TUTORING PROVIDER
page 23
Public/Private
Private
The Princeton Review

www.princetonreview.com
SCORE! (division of Kaplan)

www.escore.com
Public/Private
Public/Private
Newton Learning
(division of Edison Schools)
www.newtonlearning.net
Sylvan Learning Systems

(subsidiary of Educate, Inc.)
www.educate.com
Public/Private
Lindamood Bell Learning

Processes
www.lblp.com
Public/Private
Public/Private
Kumon North America

www.kumon.com
SMARTHINKING
www.smarthinking.com
Public/Private
Private
TUTORING
TYPE
Huntington Learning Centers

www.huntingtonlearning.com
Hotmath
www.hotmath.com
TUTORING PROVIDER
NJ
DC
IL
NY
NY
CA
NJ
NJ
CA
HEADQUARTERS
LOCATION
Individual; Online;
Small Group
Online
Large group
Large group; Small group
Large group
Individual; Small group;

Large group
Online
TYPES OF DELIVERY
High
Medium
High
High
Medium
Medium
Medium
Medium
Low
RELATIVE U.S.
MARKET
SHARE*
Founded in 1979, Sylvan Learning Systems uses a skills assessment

tool to identify students strengths and weaknesses and to
individualize the curriculum. Sixty-minute tutoring sessions are
divided between instruction and independent practice.
Provides online services to students thanks to e-structors

(online tutors) 24 hours a day, 7 days a week from any
Internet connection. The company also provides solutions to
institutions and their faculty.
Opened first tutoring center in CA in 1992, acquired by Kaplan in

1996. Currently operates more than 160 centers in 11 states.
Founded as a test preparatory course. Provides expert services on

test preparation, curriculum development, and many other
educational aspects. The proprietary curriculum combines
customized and aligned materials with individualized learning
plans. Onsite program support and researched teaching techniques
reinforce students core skills.
Provides academic lessons in math and reading from a certified

teacher using its proprietary curriculum. Delivers tutoring through
theme-based learning experiences, allowing students to practice
and apply skills learned. Concepts are aligned with those learned
during the school term.
Operates approximately 40 learning centers offering primarily

one-to-one instruction. Founded in 1986 by Nanci Bell, Patricia
Lindamood, and Phyllis Lindamood, the authors of critically
acclaimed programs designed to teach children to read, spell,
comprehend, and express language.
Helps children master math and reading through Kumons

proprietary instructional method. The tutors are touted more
as mentors or coaches than teachers.
Provides step-by-step help for the odd-numbered homework

problems in popular math textbooks. Includes such resources as
graphing calculator training, review lessons, math workbooks,
and math activities.
Creates a customized instructional plan for students using
diagnostic test results in collaboration with parents and teachers.
The company also underscores the need for improvement in
student self-esteem and motivation.
DESCRIPTION
page 24
Private
TutorVista.com
www.tutorvista.com
Public/Private
Private
Tutornet
www.tutornet.ws
University Instructors, Inc.

www.universityinstructors.com
Private
TUTORING
TYPE
Tutoring Club
www.tutoringclub.com
TUTORING PROVIDER
VA
Bangalore, India
VA
NV
HEADQUARTERS
LOCATION
Online
Online
Small group
TYPES OF DELIVERY
Medium
Low
Low
Medium
RELATIVE U.S.
MARKET
SHARE*
Provides private tutoring, SES, and other publicly

funded tutoring.
Online tutoring and homework help for K-12 and college students
through one-on-one online sessions with tutors. An assessment
test is used at the beginning of the program to tailor the tutoring
efforts on the students needs.
Offers a program that begins with skills assessment to pinpoint

areas of difficulty and frustation for students. A mastery-based
learning plan is developed based on the unique needs of the
students. Information about students progress is shared with
parents and teachers.
One of the first online tutoring companies, founded in 1998. Live
tutoring via the Internet for elementary to college-age students
with the help of software that includes a whiteboard and chat
area. The SEC sued Tutornet in 2000 for misleading investors and
in 2002 was awarded a $178 million judgment.
DESCRIPTION
page 25
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www.eduventures.com

2007 k12 Private Tutoring

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Instruction for Hire: A Survey

of the Private Tutoring Market

Instruction for Hire:

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Appendix A: Research Methodology . . . . . . . . . . . . . 20

For more than a decade, Eduventures has been

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

THE MARKET FOR PRIVATE

Instruction for Hire: A Survey of the Private Tutoring Market

FIGURE 1. PRIVATE-PAY TUTORING MARKET SIZE, 2004-05 2007-08F

Market Size (billions)

Source: Eduventures analysis

Private Tutoring Vital Signs (as of July 2006)

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

Composition of the Private-Pay Tutoring Market

Source: Eduventures analysis; n=89

FIGURE 3. LOCATIONS IN WHICH TUTORING TOOK PLACE IN 2005-06

Tutoring providers site

Source: Eduventures analysis; n=90

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

FIGURE 4. TIME OF YEAR STUDENTS PARTICIPATED IN TUTORING IN 2005-06

During the summer on a weekday

After school hours

Source: Eduventures analysis; n=97

Other tutoring companies

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

Source: Eduventures analysis

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

FIGURE 7. DISTRIBUTION OF TUTORING ENROLLMENTS AND MARKET VALUE BY GRADE IN 2005-06

Source: Eduventures analysis

A Closer Look at the Test Preparation Market

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

Will Publicly Funded Tutoring Cannibalize Private Tutoring?

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

ANATOMY OF THE PRIVATE

Rationale for services

Parents Rationale for Private Tutoring Services

To catch up academically at a new school

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

Key Sources of Information for Parents

Independent research studies

No useful source of information

Other parents or neighbors

School administrators or teachers

Other parents or neighbors represented the single most important source of

Parents placed significant value on providers tangible marketing efforts, which

Copyright 2007 Eduventures, LLC | Reproduction Prohibited

Instruction for Hire: A Survey of the Private Tutoring Market

Key Evaluation Factors

Providers location or hours were most convenient

Quality of the instructional materials used

Quality of the providers tutors

Provider was deemed trustworthy and reputable

Other parents recommended the provider

Teacher or school administrator recommended the provider

Provider tutored one of their children in the past

Provider offered online or computerized tutoring

Source: Eduventures analysis; n=75