Language Schools (United States) — NAICS 611630

A Histometrics industry primer for public-market and private investors

1. Overview

Language schools teach people to speak, read, and write a language other than the one they grew up with — foreign languages such as Spanish or Mandarin, English as a Second Language (ESL) for non-native speakers, and sign languages such as American Sign Language (ASL). The federal industry code that tracks them, North American Industry Classification System (NAICS) 2022 code 611630, covers establishments whose main business is language instruction, from conversational courses to intensive full-time programs, whether in a classroom or online.[1]

This is a small, fragmented, labor-intensive service industry with unusually swingy demand. A large share of the money comes from foreign students who travel to the United States on visas to learn English — a revenue stream that lives or dies on immigration policy, currency rates, and geopolitics. The rest comes from local adult learners, immigrant ESL, corporate training contracts, and test preparation. It is also being squeezed from below by free and cheap language apps.

The right lens for this business is student acquisition and retention, teaching capacity, instructor productivity, class utilization, and regulatory compliance — not manufacturing throughput or retail same-store sales.

Ways in differ sharply by investor type. For public-market investors, there is essentially no pure-play U.S. "language school" stock — the recognizable brick-and-mortar names are privately held. Listed exposure is either app-based (a software business, not a school) or a diversified/foreign education group, often held through an American Depositary Receipt (ADR), a certificate that lets a U.S. investor hold shares in an overseas company. For private investors, this is fundamentally a private-company and franchise industry: independent schools, family-owned chains, franchise licenses, university-pathway operators, and business-to-business (B2B) corporate-training providers.

2. What it is and how it's structured

In scope (611630): establishments primarily engaged in offering foreign-language or sign-language instruction — conversational classes for personal enrichment or travel, intensive English courses for international students, corporate language training, ASL instruction, and online language schools.[1]

What it excludes (this matters for sizing the industry honestly):

• Translation and interpreting services sit in NAICS 541930, not here.[1]
• Colleges and universities (NAICS 611310) and junior colleges (611210) that teach languages toward a degree are counted under the school — even an intensive English program run inside a university.
• K–12 world-language teaching falls under elementary and secondary schools (NAICS 611110).
• General tutoring and test-prep centers map to exam preparation and tutoring (NAICS 611691); business, computer, and management training map to 611410/611420/611430.
• App and software-based learning (Duolingo, Babbel, the Rosetta Stone software) is classified as software publishing / e-learning, not as a language school. This is the single biggest reason the federal figures look small next to headline "market" numbers.
• Government language training — the Defense Language Institute, the State Department's Foreign Service Institute — is federal activity, outside the private industry entirely.

Ownership mix: overwhelmingly small, private, and independent. The Small Business Administration (SBA) sets the "small business" ceiling for this industry at \$20.5 million in annual receipts[4] — a bar nearly every operator clears, meaning the industry is effectively all small businesses. A handful of multi-site chains (EF Education First, the Berlitz/ELS/ILSC platform, Kaplan's language brands, inlingua, EC English) sit atop a long tail of single-location schools, nonprofit and university programs, and sole proprietors. Federal data capture only the establishments whose primary activity is classified as language instruction.

3. How big it is

Our ground-truth federal statistics describe the employer side of the industry. Note the mixed reference years — receipts and concentration come from the 2022 Economic Census, headcount and payroll from 2023 County Business Patterns — so this is not a single-year income statement.

A few things fall out of these numbers. The average establishment employs about 12 people and books on the order of \$0.8–1.0 million in annual receipts[2][3] — these are small businesses. Payroll (\$610 million) is close to half of receipts (\$1.29 billion),[2][3] which tells you upfront that this is a labor business: you are paying teachers.

The undercount caveat is large here, and it cuts two ways. First, the \$1.29 billion receipts figure captures only establishments primarily engaged in language instruction. It deliberately leaves out the app economy: Duolingo alone reported roughly \$1.04 billion of revenue in FY2025 — about the size of the entire NAICS 611630 industry by itself — yet it is coded as software, not a school.[8] It also leaves out university-run intensive English programs, K–12 language teaching, and all government/military training. Second, no supplied federal figure measures nonemployer activity — self-employed tutors, informal conversation schools — so those very small operators are thinly captured. The code is therefore an accurate measure of a narrow slice: the private, employer-based, classroom-style language-school business. The broader "language learning market" that market-research firms define (bundling apps, corporate e-learning, and consumer software) is estimated in the tens of billions of dollars[22] — a different, much wider thing than what NAICS 611630 counts.

4. The investable universe

There is no clean U.S.-listed pure play in brick-and-mortar language schools. Public exposure is adjacent and indirect; the recognizable school brands are private.

Public companies (adjacent exposure):

Major private owners and platforms (the actual U.S. industry):

• Language Education Holdings (LEH) — the 2022 combination of Berlitz (founded 1878, long owned by Japan's Benesse), ELS Educational Services, and ILSC Education Group into one private platform, backed by Quad Partners and Colbeck Capital.[12] Berlitz also licenses its brand and method through franchised centers.
• EF Education First — privately held, founded 1965 by Sweden's Bertil Hult; one of the largest global language-travel, training, and cultural-exchange groups.[13]
• Kaplan Languages Group (KLG) — acquired by Inspirit Capital from Kaplan in 2026; includes Kaplan International Languages and language-travel brands such as Alpadia and Azurlingua.[11][14]
• Oxford International Education Group, EC English, and inlingua — private groups running physical English-language and language-training centers in the U.S. and abroad; inlingua operates a locally-owned, shared-materials network model.[15][16][17]
• Software competitors (not schools, same learners): Rosetta Stone, now owned by IXL Learning, and Babbel, a privately held German e-learning company.

For a public-market investor, the practical takeaway: you can buy the digital growth story (DUOL), a foreign education conglomerate (EDU and peers), or a diversified education holding (Pearson, GHC) — but not the U.S. classroom-school industry itself. Company results may contain little or no NAICS 611630 revenue. That industry is a private-market game.

5. How the money works

A language school's revenue is, at bottom, seats filled times price per course-hour, across channels with very different economics:

1. International students (intensive English). Foreign students come to the U.S. on F-1 student visas for full-time English study, often as a bridge to a U.S. degree. This is the highest-ticket channel — weeks or months of tuition, sometimes bundled with housing, activities, and visa sponsorship — but the most volatile, because it rides on visa policy, the strength of the U.S. dollar, and source-country scholarships.
2. Local adult learners (personal enrichment / immigrant ESL). Group classes and private lessons for residents — travelers, heritage learners, new immigrants needing workplace English. Private one-on-one lessons run roughly \$40–80 per hour at a premium brand like Berlitz.[18]
3. Corporate / B2B contracts. Companies pay for employee language training (relocating executives, globalized workforces). This is the stickiest, highest-margin channel and the least exposed to visa swings.
4. Ancillary and adjacent lines. Study-abroad services, university pathways, student recruitment, housing and activities, test prep, and proficiency testing round out the mix.

Cost structure and unit economics. Two costs dominate: teachers and real estate. Instructor pay is the biggest line — payroll is close to half of receipts[2][3] — and teachers are frequently part-time or contract, which keeps labor variable but drives turnover. Classroom space is largely fixed, so the make-or-break metric is utilization: paid teaching hours divided by available teacher and classroom hours. A half-empty intensive English center still pays its rent and core staff, so enrollment dips hit margins hard. The levers an owner actually pulls are class fill rates, price per instruction hour, teacher utilization, re-enrollment, and channel mix (shifting toward corporate and online to smooth out visa-driven volatility). Tuition is often collected before instruction is delivered, which helps cash flow but creates deferred-revenue and refund obligations.

The franchise route changes the economics entirely. Berlitz and inlingua license their brand and method to local operators. For Berlitz, a franchisee pays an initial fee around \$40,000, invests roughly \$150,000–300,000 to open, and then pays about a 10% royalty on sales plus a ~2% advertising fee.[19] For the franchisor this is an asset-light, recurring-royalty model; for the franchisee it is a small local business carrying the teacher and real-estate costs above.

6. What drives demand

• International-student flows. The dominant swing factor. The broad funnel is large and, in aggregate, near record: U.S. colleges and universities hosted 1,177,766 international students in 2024/25 (up 5% year over year), contributing roughly \$55 billion to the economy and supporting more than 355,000 jobs.[5] But the language-school-specific slice has been shrinking for years: U.S. intensive English enrollment peaked above 133,000 students in 2015, then fell to about 69,386 students across 347 programs in 2024 — roughly half the peak.[6] Saudi Arabia's government scholarship program shrank, the dollar strengthened, U.S. tuition kept rising, and global competitors took share.[16]
• Visa and immigration policy. F-1 visa issuance, processing times, and travel restrictions move enrollment directly. New international enrollment across U.S. higher education fell 17% in fall 2025, with institutions overwhelmingly citing visa concerns and travel restrictions — a signal that even a record total base can turn quickly.[7]
• Currency. A strong U.S. dollar makes American study more expensive for foreign families and diverts them to the UK, Canada, and Australia.[16]
• Immigration and workforce ESL. New arrivals and employers needing English for work create steadier, less visa-sensitive domestic demand. EducationUSA notes that intensive English programs commonly require 20–30 study hours per week.[18]
• Corporate globalization. Cross-border business and executive relocation sustain the B2B channel.
• Test preparation (TOEFL, IELTS) rises and falls with study-abroad ambitions.
• ASL. A structural bright spot: U.S. colleges widely accept ASL for foreign-language credit, and demand for interpreters is projected to grow much faster than the average occupation.[20]
• Technology substitution (a demand headwind). Free and low-cost apps, speech recognition, and AI tutors have absorbed much of the casual, price-sensitive learner, compressing willingness to pay for beginner group classes — good for total reach, bad for undifferentiated classroom providers competing on price.

7. Regulation

Regulation clusters around enrolling international students, layered over state licensing, consumer protection, and labor law:

• SEVP certification. To enroll foreign students in F-1 status, a school must be certified by the Student and Exchange Visitor Program (SEVP), run by U.S. Immigration and Customs Enforcement (ICE) within the Department of Homeland Security. Certification lets a school issue the Form I-20 that a student needs to obtain an F-1 visa, and enrollment is tracked in the Student and Exchange Visitor Information System (SEVIS).[15]
• Accreditation requirement. Under the Accreditation of English Language Training Programs Act (effective 2013), any English-language program enrolling F-1 students for full-time intensive study must be accredited by an accreditor recognized by the U.S. Department of Education. The two bodies that do this for standalone language schools are the Commission on English Language Program Accreditation (CEA) and the Accrediting Council for Continuing Education and Training (ACCET).[15][17] Accreditation typically takes two to three years to obtain — a real barrier to entry, and losing it is existential for a school that depends on international students.
• State licensing. Private, non-degree career and vocational schools are licensed state by state — for example, California's Bureau for Private Postsecondary Education (BPPE).[21]
• Consumer protection and labor rules apply to tuition, refunds, advertising claims about visas and outcomes, and instructor/contractor classification.

The through-line: regulatory failure — loss of accreditation, SEVP certification, or a state approval — can destroy an enrollment channel even when the teaching product is sound.

8. Competitive dynamics and consolidation

The industry is highly fragmented. Federal concentration measures make this concrete: the four largest firms account for just 29.2% of receipts, the top eight for 36.1%, the top 20 for 48.1%, and the top 50 for 58.6%, with a Herfindahl-Hirschman Index (HHI, a standard concentration score where higher means more concentrated) of only 266.3[3] — far below the ~1,000–1,500 range at which U.S. antitrust regulators begin to treat a market as concentrated. In plain terms: no one controls this market, though a meaningful multi-site platform layer sits above a very long tail of independents.

Competition turns on teaching quality and measurable outcomes, brand trust and reviews, location and immersion, accreditation and visa credibility, university and corporate partnerships, recruitment-agent relationships, housing and student support, and — increasingly — price and online convenience.

Two forces are reshaping the industry:

• Consolidation. The 2015–2019 international-student slump forced closures and mergers — Study Group sold its Embassy English chain to EC in 2018, and in 2022 Berlitz, ELS, and ILSC were combined into Language Education Holdings.[12][16] The 2026 sale of Kaplan Languages Group to Inspirit Capital shows continuing private ownership churn.[11] Weak enrollment tends to concentrate the survivors. But fragmented demand, instructor dependence, local regulation, and franchise quality control limit the payoff from a simple roll-up.
• Digital disruption. Free apps (Duolingo) attack the beginner end on price, while live online tutoring marketplaces (Preply, Cambly, italki) undercut the mid-market by matching learners to teachers directly, without a school's real-estate overhead. The defensible ground for physical schools is narrowing to what apps do poorly: visa-sponsored immersion, accredited pathways to U.S. degrees, and structured corporate training.

9. Risks

• Immigration and visa policy is the number-one risk: a tightening of F-1 issuance or travel rules can cut the highest-value revenue channel quickly, as the 2015–2019 decline and the fall-2025 drop both showed.[6][7]
• Currency and geopolitics. A strong dollar and strained bilateral relations divert students elsewhere; heavy reliance on a few source countries (China, Saudi Arabia, Brazil) concentrates that risk.[16]
• Technology substitution. Apps and AI tutors keep raising the quality of free/cheap alternatives, pressuring price and volume at the consumer end.
• Operating leverage in reverse. Fixed real-estate and core-staff costs mean enrollment dips fall straight to the bottom line; long leases and student-housing commitments amplify the downside.
• Seasonality. Summer travel and academic-intake peaks can leave fixed facilities underused the rest of the year.
• Instructor risk. Teacher quality, availability, wage inflation, and contractor-classification rules directly affect capacity and reputation.
• Regulatory dependence. Loss of accreditation or SEVP certification removes the ability to enroll international students — effectively fatal for an intensive English school — and can trigger refund obligations.
• Channel concentration. Heavy dependence on recruitment agents, a few universities, app stores, or a handful of corporate customers weakens bargaining power.
• Cyclicality. Language study is discretionary; recessions and corporate cost-cutting hit both the consumer and B2B channels.
• Financing and measurement risk. Debt-funded acquisitions are exposed to rate and enrollment shocks, and incomplete federal data make market-share and valuation estimates less certain.

10. How to invest and the outlook

Public-market routes are limited and indirect. The cleanest exposure to the growth in language learning is Duolingo (DUOL) — but understand you are buying a subscription-software business, not the classroom industry, and it competes against traditional schools.[8] New Oriental (EDU) and its China-listed peers offer language and test-prep exposure at scale but come wrapped in China-policy and ADR risk;[9] Pearson (PSO) adds content and assessment; Graham Holdings (GHC) is now only a diversified education holding after the Kaplan Languages Group sale.[10][11] For any of these, the key diligence question is exposure: how much revenue actually comes from language learning versus adjacent products — track user growth, paid conversion, retention, assessment volume, pricing, and AI-related costs rather than broad "language-market" narratives. There is no U.S.-listed pure play on domestic language schools.

Private-market routes are where the actual industry lives: acquiring a profitable regional school and adding online or corporate programs; building a multi-site platform around university pathways and international recruitment; buying a franchise (Berlitz, inlingua) for an asset-light royalty or a single-unit small business; or backing a B2B corporate-training, recruitment, housing, or assessment platform. Diligence should center on site-level utilization, instructor dependence, student-acquisition channels, refund and deferred-revenue exposure, accreditation and visa compliance, leases and housing commitments, and normalized cash flow. The more defensible economics sit in the franchise-royalty model and in the sticky corporate and accredited-pathway channels, not in undifferentiated consumer group classes exposed to app competition.

The outlook (forward-looking judgment, not reported fact): near-term U.S. demand faces two headwinds at once — tighter international-student visa policy, which is already pulling new enrollment down,[7] and continued app substitution at the low end. Against that, several niches look durable: immigrant and workforce ESL, corporate training, ASL, and test prep tied to study-abroad. The most likely path is a slow-growing, still-fragmented industry that keeps consolidating, with economic value migrating toward digital delivery and B2B contracts. Artificial-intelligence tutoring is the wild card — a substitution threat to beginner classes, but also an opportunity for schools that blend AI practice with the human immersion and accredited visa pathways software cannot replicate. For investors, the through-line is the same on both sides of the market: prize the revenue that visas and apps can't easily take away.

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Sources

1. U.S. Census Bureau, "2022 NAICS Definition: 611630 Language Schools (definition and exclusions)," 2022. https://www.census.gov/naics/?details=611630&input=611630&year=2022
2. U.S. Census Bureau, "County Business Patterns, NAICS 611630," 2023 (establishments, employment, payroll). https://www.census.gov/programs-surveys/cbp.html
3. U.S. Census Bureau, "Economic Census — Concentration of Largest Firms, NAICS 611630 (receipts, firm count, CR ratios, HHI)," 2022. https://data.census.gov/table/ECNSIZE2022.EC2200SIZECONCEN
4. U.S. Small Business Administration, "Table of Small Business Size Standards (NAICS 611630, \$20.5M)," 2023. https://www.sba.gov/document/support-table-size-standards
5. Institute of International Education, "Open Doors 2025 — International Student Enrollment (1,177,766 students, +5%; ~\$55B economic contribution; 355,000+ jobs)," 2025. https://www.iie.org/news/open-doors-2025-press-release/
6. Institute of International Education, "Open Doors — Intensive English Programs (69,386 students / 347 programs in 2024; peak >133,000 in 2015)," 2025. https://opendoorsdata.org/annual-release/intensive-english-programs/
7. Institute of International Education / The PIE News, "New international enrolments in the US down 17% this fall (Open Doors 2025 snapshot)," 2025. https://thepienews.com/new-international-enrolments-in-us-down-17-this-fall/
8. Duolingo, Inc., "FY2025 Form 10-K (revenue ~\$1.04B; ~12.2M paid subscribers)," SEC, 2026. https://www.sec.gov/Archives/edgar/data/1562088/000162828026012494/duol-20251231.htm
9. New Oriental Education & Technology Group / Macrotrends, "Revenue ~\$4.9B for year ended May 31, 2025," 2025. https://www.macrotrends.net/stocks/charts/EDU/new-oriental-education-technology/revenue
10. Pearson plc, "Annual Report and Accounts 2025," 2026. https://plc.pearson.com/en-GB/investors/annual-reports
11. Graham Holdings Company, "Form 8-K: Sale of Kaplan Languages Group (effective May 1, 2026)," SEC, 2026. https://www.sec.gov/Archives/edgar/data/104889/000162828026029369/ghc-20260501.htm
12. Quad Partners, "Berlitz, ELS and ILSC Join Language Education Holdings," 2022. https://www.quadpartners.com/news/berlitz-els-and-ilsc-join-language-education-holdings/
13. EF Education First, "EF Celebrates 60 Years of Opening the World Through Education (founded 1965; Hult family)," 2025. https://www.ef.edu/about-us/press/articles/2025/ef-celebrates-60-years-of-opening-the-world-through-education/
14. Kaplan International Languages, "About Kaplan (Kaplan Languages Group; Alpadia, Azurlingua)," 2026. https://www.kaplaninternational.com/about-kaplan
15. U.S. Department of Homeland Security / ICE-SEVP, "SEVP Certification, Form I-20, and the Accreditation of English Language Training Programs Act (2013)," 2025. https://studyinthestates.dhs.gov/schools/certification/start-cert
16. Bridge Education / Inside Higher Ed, "U.S. Intensive English Programs: enrollment decline, Saudi scholarship cuts, and school closures (incl. Embassy English sale to EC, 2018)," 2018–2020. https://bridge.edu/tefl/blog/u-s-intensive-english-programs-short-term-volatility-or-long-term-decline/
17. Commission on English Language Program Accreditation (CEA) / Accrediting Council for Continuing Education and Training (ACCET), "Accreditation of intensive English programs," 2025. https://www.cea-accredit.org/accreditation/faqs
18. U.S. Department of State, EducationUSA, "What Are U.S. English Language Programs? (ESL/IEP overview; 20–30 hours/week; Berlitz private-lesson pricing illustrative)," 2026. https://educationusa.state.gov/your-5-steps-us-study/research-your-options/english-language/what-are-english-language-programs
19. FranchiseHelp, "Berlitz International franchise cost and terms (~\$40K fee; \$150K–300K investment; ~10% royalty + ~2% ad fee)," 2025. https://www.franchisehelp.com/franchises/berlitz-international/
20. U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, "Interpreters and Translators — much-faster-than-average projected growth (ASL demand)," 2025. https://www.bls.gov/ooh/media-and-communication/interpreters-and-translators.htm
21. California Bureau for Private Postsecondary Education (BPPE), "Licensing of private postsecondary and vocational schools," 2025. https://www.bppe.ca.gov/
22. Grand View Research / GMInsights, "Language Learning Market size (broad market-research definition, tens of \$ billions)," 2025. https://www.gminsights.com/industry-analysis/language-learning-market