The number of Americans pursuing postsecondary education continues to rise. According to the U.S. Department of Education’s National Center for Education Statistics (NCES), about 17.3 million students were enrolled in degree-granting, postsecondary institutions in the United States in 2004; and this number is expected to grow to 19.9 million by 2015, a 15 percent increase. Also rising has been the number of adults seeking postsecondary education above the traditional age. From 1990 to 2004, the number of students 25 or older at degree-granting institutions increased by 18 percent, and is expected to rise an additional 19 percent by 2015.

The development of distance learning methods of instruction has been one of the key recent trends in postsecondary education. “Distance education” is generally defined as a course or program that relies on computers, audio, or video technology as a means for delivering instruction. Online learning still has plenty of growth opportunity: just 24 percent of postsecondary institutions offering bachelors’ degrees make online courses available.

Online learning appears to be most important at schools offering associate’s degrees—i.e., community colleges—where 67 percent include it in their long-term strategy (up from 58 percent in 2003). The growing popularity of online education also benefits companies who provide the computer-based tools and infrastructure used by institutions to build or expand their online learning operations. The heightened competitive environment has led to growth difficulties and a need to rethink recruitment strategy on the part of the for-profit providers, but also new business avenues for online learning software and services companies.

The market for software in K-12 education will likely be fueled by demand for products that can be used to adhere to the provisions of the No Child Left Behind Act, which requires adequate yearly progress against certain standards. A fairly sizable market has developed around “reading intervention” programs, many software-based. These tools are intended to help remediate students with critically deficient reading skills. While reading intervention products address a critical educational need, product adoption has slowed in the past year. The products tend to be quite expensive, and it is likely that school districts cannot afford to purchase sufficient licenses to meet their needs. The development of “math intervention” products is currently underway, but it remains unclear how quickly, and to what extent, adoption would progress.