Higher education is a large, complex, and changing industry. There is no single measure of the industry's size, but it enrolls some 19 million students and employs 3.4 million people, 3 percent of the entire U.S. service-sector labor force. A small number of schools are very well known, but the industry includes 4,314 degree-granting institutions (U.S. Department of Education, National Center for Education Statistics 2007b).

The higher education industry consists of public colleges and universities, private nonprofit schools, and a small but very rapidly growing number of private for-profit educational firms. About 39 percent of all U.S. degree-granting colleges and universities are public – four-year state universities and two-year community colleges – but as of fall 2006 they enrolled the large majority, 74 percent of all (undergraduate and graduate) students. There are as many nonprofit colleges and universities, about 38 percent of all schools, but their enrollments tend to be smaller than the public ones, accounting for 20 percent of all enrolled students. For-profit degree-granting schools are only 23 percent of the mix, enrolling over 6 percent of all students (see Tables A2.1 and A2.2 in the Appendix). The for-profit sector is vastly larger, though, when postsecondary schools that do not grant degrees are included. Nearly three-fourths of the 2,200 non-degree-granting schools in 2006 were for-profit, and this segment of postsecondary education is growing rapidly; its 330,000 students – an average of only some 160 students per school – is up from 189,000 as recently as 1997 (U.S. Department of Education, National Center for Education Statistics 2001, 2007b).