AI Is Splitting the Tutoring Market: What the Numbers Show

If you run a tutoring business, you have heard it by now: AI is going to replace tutors. Some owners say it already has. Others say nothing has changed.

The numbers tell a more specific story. AI is not replacing tutoring as a whole. It is taking one part of it, the quick homework-help hour, and leaving the rest. The families who stay are paying more, and they expect more for it.

In 2024 we wrote about the growing demand for tutoring services. Here is what has changed since, in four parts.

In the fall of 2025, 54% of American teens said they had used an AI chatbot for help with schoolwork, and one in ten said they do all or most of their schoolwork with its help, according to a Pew Research Center survey of 1,458 teens.

It is moving quickly. A RAND survey found that the share of middle school, high school and college students using AI for homework went from 48% in May 2025 to 62% in December 2025. That is seven months.

Students are not sure it is good for them. In the same RAND survey, 67% said using AI for schoolwork hurts their critical thinking, up from 54% earlier in the year.

Takeaway: the "help me finish tonight's worksheet" hour is the part of tutoring AI now does for free, at midnight, with no booking.

Chegg built a large business selling homework answers and step-by-step solutions to students. In one year, its subscribers fell 40%, to 2.6 million by mid-2025. By the second quarter of 2026, its revenue had dropped to $51.8 million, down 51% from a year earlier. Its chief executive put it plainly: "AI created real headwinds for this company."

Takeaway: when the product is an answer, AI is a free competitor. That is the low end of the market, and it is the part that is going.

The live tutoring numbers look different. Nerdy, the company behind Varsity Tutors, reported 29,100 active members at the end of June 2026, 5% fewer than a year earlier. But each member spent 5% more.

National surveys point the same way. In October 2025, 19% of parents said their child was getting tutoring and another 24% were looking or planning to look, according to EdChoice's monthly parent poll. Parents said they would pay an average of $357 a month for tutoring, a number that has held steady.

Takeaway: fewer families, each spending more. Families who pay that much want to see what they are getting.

AI is not the only pressure. US public schools had 50.8 million students in 2019 and 49.6 million in 2022. The National Center for Education Statistics projects 46.9 million by 2031, mainly because fewer children are being born.

Takeaway: the pool of students is shrinking on its own, with or without AI. Every family you keep matters more.

• Sell results, not answers. AI gives answers for free. What it cannot give a parent is a person who knows their child, a plan, and proof that the plan is working. Show that proof often: progress updates, scores over time, a regular check-in with your education director.
• Make the gap visible. Students who use AI for homework still need someone to organize the work, plan it, check it and help them reflect on it. That is the loop we describe in how a tutoring company becomes a learning system.
• Look like a business worth $357 a month. Clean invoices, automatic billing, on-time reminders and regular parent updates are part of what families are paying for. A regular newsletter to your families helps too.
• Use AI yourself. Some tutoring companies are already building AI into how they teach. The tutor who uses AI well is harder to replace than the one who ignores it.

Everything above comes from large companies and national surveys. Nobody has asked the owners of local tutoring businesses what is happening in theirs.

Over the coming months we are calling tutoring business owners with ten quick questions, all numbers: how many students you have now compared with 2023, how many come mainly for homework help, how many parents have brought up AI, and how many families have cut back because of it. We will publish what we find in a follow-up article.

If you run a tutoring business and would like to take part, contact us. If you would like to see the results first, join our newsletter.

Sources: Pew Research Center, RAND, Chegg and Nerdy quarterly results, EdChoice, and the National Center for Education Statistics. Data through June 2026.