Is education a good investment?
An entrepreneur, investor, policy maker and scholar make the case for education
Over the past year, I’ve interviewed entrepreneurs, investors, policymakers, and scholars on my podcast to explore the big questions shaping the future of education. One of the most pressing: Is education a good investment?
We often hear that education is the great equalizer, a pathway to opportunity, and a cornerstone of economic growth. But is it also a smart financial decision? Can it generate both social impact and strong financial returns?
Education is often seen as a public good with slow, intangible returns, making it less attractive to investors seeking quick profits. The traditional education system is highly centralized, creating systemic challenges that deter risk-averse investors. However, alternative education models—such as ESAs, homeschooling, and direct-to-consumer learning—are decentralizing the sector and opening new investment opportunities.
So, is education a good investment? To answer this question, I’ve spoken with a wide range of experts—entrepreneurs, investors, policymakers, and scholars—who are shaping the future of education. Among them, four stand out for their unique insights:
Ben Somers is the founder of Recess, an innovative platform empowering kids to design their own education through collaborative, project-based learning.
Jomayra Herrera is a partner at Reach Capital, a venture firm specializing in education technology investments, where she leverages her expertise to support innovative solutions in the education sector.
Doug Tuthill serves as the Chief Vision Officer at Step Up for Students. Under his leadership, Step Up For Students has experienced significant growth, serving more than 500,000 students across Florida.
Dr. Rebecca Winthrop is a senior fellow at the Brookings Institution and director of its Center for Universal Education, specializing in global education strategies to improve learning outcomes worldwide.
In this post, I’ll touch on seven compelling reasons these four luminaries gave me as to why education is the most powerful place to put my money and my time, not only for the greater social good, but for strong financial returns as well.
1. It’s a Big Problem, So Big Payoff If It’s Solved
Education is one of the world’s largest and most persistent challenges, making it a high-stakes opportunity for those who can solve it. The complexity of modern education—spanning issues of access, quality, equity, and effectiveness—makes it one of the most critical investments of our time. Solving these challenges requires addressing long-neglected areas such as accessibility, customization, and innovation, which traditional schooling models have often failed to prioritize.
Ben Somers, founder of Recess, echoes Elon Musk’s philosophy that “you get paid in proportion to the size of the problems that you solve.” He argues that education is a massive, unsolved problem with enormous financial and social rewards for those who tackle it. As Somers points out, “if you don’t solve the problem, you don’t get paid anything—but if you do solve it, you get paid a lot,” making education one of the most consequential and potentially lucrative sectors to invest in today.
Jomayra Herrera, a partner at Reach Capital, supports this view, emphasizing education’s unique competitive advantage in attracting top talent. She notes, “The (education) sector attracts the best talent to try to address these pervasive problems,” signaling that education is finally becoming an attractive space for innovators and entrepreneurs. This influx of talent is critical for driving the systemic change needed to address education’s most pressing challenges.
Together, these perspectives underscore why education is not only a moral imperative but also a high-reward opportunity for those willing to tackle its complexities. By investing in innovative solutions, we can unlock education’s potential to transform lives, economies, and societies worldwide.
2. Education Accounts for 10% of GDP—A Multi-Trillion-Dollar Industry
Education is not just a social good—it’s a multi-trillion-dollar global industry, accounting for nearly 10% of GDP worldwide. Ben Somers highlights this massive market size, stating, “We’re talking trillions of dollars a year… one of the world’s largest markets, punching right up there with housing, healthcare, and debt.” The sheer economic scale of education means that even small efficiency improvements can yield massive financial returns.
Despite its size, education has traditionally been one of the slowest sectors to innovate. However, as digital learning, AI, and decentralized schooling models gain traction, investment opportunities are growing at an unprecedented rate.
With governments, private institutions, and families collectively spending trillions on education each year, the sector presents a vast, yet underutilized investment landscape. The demand for more efficient, flexible, and outcome-driven learning solutions is higher than ever, creating a surge in new business models and funding opportunities. As traditional institutions struggle to adapt, startups and innovators are stepping in to fill the gaps, unlocking new revenue streams in edtech, personalized learning, and alternative schooling models.
3. AI and Algorithmic Discovery are Changing the Education Equation
New technologies are reshaping education’s potential, making it more scalable, personalized, and accessible than ever before. AI-powered tutors can now deliver customized learning experiences tailored to individual student needs, adapting in real time based on progress and comprehension. Algorithmic feeds and recommendation engines ensure that high-quality educational content reaches learners worldwide, breaking down barriers to access.
Ben Somers explains, “We now have the ability to distribute educational content globally within 24 hours. People like Mark Rober are evangelizing science and engineering through the internet at unprecedented scale.”
Beyond distribution, AI-driven platforms are transforming how students engage with learning. Intelligent tutoring systems, adaptive assessments, and personalized learning paths allow students to move at their own pace, reinforcing concepts they struggle with while accelerating through material they master quickly.
Meanwhile, decentralized learning models and online communities are replacing traditional classroom constraints. Platforms like YouTube, MasterClass, and interactive learning hubs enable students to learn from world-class experts without geographic limitations. As AI continues to advance, we are approaching a future where every learner has a highly personalized, always-available tutor, fundamentally reshaping how education is delivered and consumed.
4. Education Savings Accounts (ESAs) are growing exponentially
Education Savings Accounts (ESAs) are government-funded programs that allow families to use public education dollars for a variety of approved learning expenses, including private school tuition, tutoring, homeschooling resources, and online courses.
ESAs are growing rapidly, with over $3 billion now allocated across various states and participation increasing by more than 120% since 2020. States like Arizona, Florida, and West Virginia have expanded ESA eligibility, and more than 20 states introduced ESA-related bills in 2023 alone. Analysts predict that by 2026, over 1 million students could be utilizing ESAs, signaling a major shift toward parent-driven education funding
With billions of dollars in ESAs being allocated across various states, the education sector is experiencing a surge in entrepreneurial opportunities. Companies that provide personalized learning solutions, tutoring services, microschools, and online platforms are particularly well-positioned to benefit from this shift.
Jomayra Herrera describes Education Savings Accounts (ESAs) as “the largest unlock of public financing going into the hands of consumers within the education realm that we’ve ever seen in history.” These changes are not only empowering families but also creating new markets for direct-to-consumer education products, from online courses to microschools. With decentralized education models gaining traction, entrepreneurs and investors have an unprecedented opportunity to develop tailored, scalable solutions that better meet individual learning needs.
According to Herrera ESAs, are “a truly incredible opportunity” that allows parents to directly allocate public funds to educational resources that best suit their children’s needs. Doug Tuthill emphasizes how this shift is leading to “a virtuous cycle in the public education market,” where increasing parental control is fostering greater innovation and competition.
Tuthill highlights how “money is power,” arguing that giving families control of their education funding allows them to make more effective decisions, creating systemic change.
“With over $3 billion in the hands of families, that’s a lot of opportunities for educators to do their own thing,” underscoring the financial shift away from top-down education models toward parent-driven decisions.
5. The Homeschooling Boom and the Direct-to-Consumer Market
Homeschooling has surged in recent years, driven by both philosophical shifts and practical advancements in education technology. The homeschooling population has tripled since pre-pandemic levels, with 5.5 US families now homeschooling. Ben Somers emphasizes, “(this creates) a really large direct-to-consumer market where families are buying products and making purchase decisions themselves.”
The rise of homeschooling has opened up direct-to-consumer (DTC) education markets like never before. Families are increasingly making their own education decisions and spending directly on learning resources.
Doug Tuthill notes, “The more you can create a continuum of options for families and allow them to customize the kind of support systems they need... that’s where everything is going.”
With federal and state funding increasingly supporting school choice, homeschooling is no longer just an option for the wealthy or ideologically driven. Instead, it has become a mainstream alternative, bolstered by a growing ecosystem of online platforms, AI-driven tutors, and curated learning resources. Ben Somers points out that “more dollars are available for education than there ever have been,” making homeschooling a viable, scalable, and increasingly attractive option for families across socioeconomic backgrounds.
6. The Larger Economic Returns of Educating Kids
Investing in education doesn’t just benefit individuals—it drives long-term economic growth. Dr. Rebecca Winthrop, who studies the ripple effect of education, explains investing in education drives economic development, innovation, and global trade. For individuals, education remains the surest path to upward mobility, and for societies, it fosters stability and economic growth.
“Investing in education drives economic development, innovation, and global trade… When you educate a girl, you don’t just change one life—you impact maternal and infant mortality, reduce child marriage, and boost economic development.“
Education investments fuel workforce development, drive technological innovation, and enhance global competitiveness. Dr.. Winthrop emphasizes how “increased education levels increase trading with US goods,” illustrating education’s role in strengthening national economies. As global industries shift toward knowledge-based work, investing in education is not just a moral imperative but also an economic necessity.
7. Social Impact Returns of Education
Beyond economics, education is one of the most powerful forces for social transformation. Doug Tuthill emphasizes, “Education is the way to level the playing field… It’s the vehicle through which we can address inequalities and the horrific conditions I saw growing up.”
Dr. Rebecca Winthrop highlights education’s far-reaching impact, stating, “If young girls and women received just a junior middle school education, deaths from climate-related disasters would be 60% lower.” This underscores how education contributes to sustainability, disaster resilience, and global development. She also notes that girls’ education has been called “a social vaccine” for the spread of HIV/AIDS, further illustrating its transformative power.
Jomayra Herrera connects education to personal well-being, explaining, “We’re investing in solutions that ignite purpose. Having a sense of purpose is linked to living a longer life, better health, greater happiness, improved sleep, and even a lower risk of Alzheimer’s.” Education doesn’t just prepare individuals for jobs—it enhances overall quality of life, civic engagement, and long-term happiness.
The Investments That Will Yield Returns Are Non-Traditional Models
As education undergoes rapid transformation, non-traditional models—such as AI tutoring, online micro-schools, and decentralized funding mechanisms—are emerging as the best investment opportunities. Ben Somers argues that “there are a few things changing in the world right now that make education a much better investment than it has been in the past,” citing scalable content distribution, AI-driven personalization, and direct-to-consumer education markets. Doug Tuthill reinforces this by stating, “We’re literally building a new infrastructure for public education,” suggesting that traditional schooling models are being replaced by more agile, student-centered solutions.
The education sector is experiencing rapid change, creating high-growth opportunities for investors. The most promising areas for investment include:
Direct-to-Consumer (DTC) Learning Products: With parents now driving education spending, there is demand for high-quality, engaging curriculum, tutoring, and microschools.
AI-Driven Personalized Learning: AI-powered tutors and adaptive learning platforms are scaling personalized education like never before.
Education Savings Accounts (ESA) Solutions: Companies that facilitate ESA usage, whether through education providers, payment platforms, or customized programs, are poised to thrive.
Alternative Learning Models: Microschools, hybrid learning platforms, and competency-based education models are attracting families seeking alternatives to traditional schooling.
Education is no longer just about institutions—it’s about innovation. And those who invest in these emerging models stand to reap the greatest rewards.
So, Will You Invest?
Education is not just a moral cause—it’s an economic force and a high-return investment. The rise of school choice, AI-driven learning, and direct-to-consumer education models is reshaping the industry, creating unprecedented opportunities for those willing to invest in its future.
At Modulo, we believe in this transformation. That’s why we’re building the world’s first decentralized education marketplace—empowering families to tailor learning to their needs, connecting educators with students, and enabling more personalized, flexible education experiences.
We’re raising on WeFunder
We’re raising on WeFunder to accelerate this transformation. to accelerate this shift. If you believe education is one of the most powerful investments—both for society and financially—now is the time to act.
Will you invest? Let’s build the future of education—together