regional economic press briefing · source: u.s. bureau of labor statistics and haver analytics. 7...

Regional Economic Press Briefing

November 20, 2013

The views expressed here are those of the presenters and do not necessarily represent

those of the Federal Reserve Bank of New York or the Federal Reserve System.

Regional Economic Conditions Jaison Abel, Senior Economist

Overview of Regional Conditions

• Anniversary of Superstorm Sandy

Regional economy rebounded quickly from the damage and

disruption caused by the storm

• Economic Activity and Employment

New York City remains on a solid growth trajectory

Moderate growth in Upstate New York and Northern New Jersey

Puerto Rico remains weak

• Housing

Most of the region’s housing markets continue to improve, though

home price appreciation has generally been below average during

the housing recovery

FEDERAL RESERVE BANK OF NEW YORK 2

Rebound from Superstorm Sandy New York City Metro, Total Employment

3 Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com.

8,300

8,400

8,500

8,600

8,700

8,800

Jan12 Mar12 May12 Jul12 Sep12 Nov12 Jan13 Mar13 May13 Jul13 Sep13 Nov13

Thousands

Actual Employment

Pre-Sandy Employment Trend

Aug

Oct 2012

Nov 2012

-37,200

Dec 2012

+67,400

Comparison to Other Natural Disasters Total Employment Trends


70

75

80

85

90

95

100

105

110

-12 -9 -6 -3 0 3 6 9 12 15 18 21 24

Hurricane Katrina New Orleans Metro

Northridge Earthquake Los Angeles County

Hurricane Andrew Miami-Dade County

Superstorm Sandy New York City Metro

Months Before Disaster

Months After

Disaster

Index (Disaster Date = 100)

Aug13

School Attendance After Superstorm Sandy New York City Schools, K-12

5 Source: New York City Department of Education.

Note: “Most Affected” schools are those that were closed or relocated as of November 8, 2012; excludes special education and charter schools.

48%

87% 90%

84%

90% 91%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

One Week After (11/8/2012)

One Month After (12/7/2012)

One Year After (11/8/2013)

Most Affected

Other

Typical Attendance

Regional Economic Activity Indexes of Coincident Economic Indicators

Source: Federal Reserve Bank of New York; Puerto Rico Government Development Bank. Note: The Puerto Rico composite index is based on a different methodology than the indexes produced by the FRBNY. 6

80

85

90

95

100

105

110

115

Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13

Last Briefing

New York State

New Jersey

New York City

Puerto Rico

Aug

Index (December 2007 = 100)

Shading indicates NBER recession

Weekly Initial Jobless Claims New York and New Jersey, Seasonally Adjusted

7 Source: U.S. Bureau of Labor Statistics and Haver Analytics.

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Jun 01 Jun 15 Jun 29 Jul 13 Jul 27 Aug 10 Aug 24 Sep 07 Sep 21 Oct 05 Oct 19 Nov 02 Nov 16

New York State +

New Jersey

Average Claims (June- Aug)

Nov 2

Regional Consumer Confidence Mid-Atlantic States, Present Situation Index, Seasonally Adjusted

8 Source: The Conference Board and Haver Analytics.

0

20

40

60

80

100

120

140


Moving Average


Index Value

Oct

9

Status of Jobs Recovery Share of Lost Jobs Gained Back During Local Recovery

Source: Bureau of Labor Statistics and Moody’s Economy.com.

Note: Putnam and Bergen are the Putnam-Rockland-Westchester

and Bergen-Hudson-Passaic Special BLS Areas.

Newark

Glens Falls

Elmira Binghamton

Putnam Fair- field

Edison

Kingston

Buffalo

Rochester Syracuse

Utica

Albany

Ithaca

NYC

Puerto Rico

Recovered All Lost Jobs

Recovered At Least 75 percent of Lost Jobs

Recovered Less Than 75 percent of Lost Jobs

No Recovery

Nov 2011

Regional Home Price Trends CoreLogic Home Price Index, Seasonally Adjusted

Source: CoreLogic Home Price Index (including distressed sales); Seasonally adjusted by FRBNY staff.

10

60

65

70

75

80

85

90

95

100

105

110

Mar06 Mar07 Mar08 Mar09 Mar10 Mar11 Mar12 Mar13

Index (U.S. Peak of March 2006 = 100)

Sep


United States

Northern NJ

Downstate NY

Upstate NY

Geography of the Housing Recovery Change in Home Prices, November 2011 to September 2013

11 Source: CoreLogic Home Price Index (including distressed sales).

Price Declines

Below Average Price Increases

Above Average Price Increases

Backlog of Foreclosures in Region Share of Mortgages in Foreclosure

12 Source: CoreLogic LoanPerformance (LP) and Lender Processing Services Mortgage Performance data (LPS).

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2005 2006 2007 2008 2009 2010 2011 2012 2013

Downstate NY

United States

Northern NJ

Upstate NY

Aug


Private For-Profit Institutions in the Higher Education Landscape

Rajashri Chakrabarti, Economist

Outline

• Private for-profit institutions have shown exceptional

growth in recent years

• What are for-profit schools? Where are they located?

What degrees do they offer? Whom do they serve?

• Examine the growth of for-profits, and any changes

following the Great Recession

• What are their tuition levels and net prices? How much

do their students rely on student loans?

• What is the future outlook for students in these

for-profit institutions? 14

Key Takeaways

• For-profits are primarily trade schools that offer

undergraduate certificates and associate’s degrees

• For-profits tend to serve lower income, older, minority,

and female students

• Enrollment in for-profits skyrocketed during the Great

Recession, and declined as recovery set in

• Tuition at for-profits considerably higher than

comparable publics, and the gap has widened over time

• Students at for-profits are more likely to take student

loans, and in larger amounts 15

Who Are the Private

For-Profit Schools?

51%

12% 5%

32%

56%

11%

17%

32%

84%

17 Source: Integrated Postsecondary Education Data System (IPEDS).

For-Profits Primarily Offer

Short-Term Programs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Private For-Profit Public Private Non-Profit

2 Year

4 Year

Less than 2 year

Share of Institutions by Program Length

FEDERAL RESERVE BANK OF NEW YORK 18

Appliance control

Automotives

Business

Construction

Computers

Healthcare

Massage

Legal

Arts

Automotives

Business

Construction

Electrical

Healthcare

Legal

Adult Remedial (GED)

Citizenship Training

Nursing

Trade skills (less common

than in For-Profits)

Primarily Academic

Associate’s Degrees

Military Institutions

<2-Years 2 Year

For-Profits

Public

For-Profits Focus on Trade Skills

For-Profits Primarily Grant

Certificates Below the Bachelor’s Level

19

74%

36%

14%

17%

36%

10%

5%

21%

48%

3% 7%

29%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Private For-Profit Public Private Non-Profit

Graduate Bachelor’s

Associate’s

Undergraduate Certificates

Source: Integrated Postsecondary Education Data System (IPEDS).

Share of Degrees Conferred

20a

Where Are the 2-Year Schools?


2-Year Public

2-Year For-Profit

Erie Community

College

Monroe Community

College Cayuga County

Community College

North Country Community

College

Hudson Valley Community

College

Orange County Community

College

Nassau Community

College Brookdale

Community College

Sussex County Community

College

Passaic County Community

College

Essex County College

CUNY Bronx Community

College



2-Year Public Examples

2-Year Public

20b

New School of Radio and

Television

Utica School of Commerce

ITT Technical Institute

Bryant and

Stratton College

Olean Business Institute

Joe Kubert School of Cartoon &

Graphic Art

Island Drafting and Technical

Institute

ASA Institute of Business & Computer

Technology

Eastern School of Acupuncture

& Traditional Medicine

Teterboro School of

Aeronautics

Business Informatics

Center



2-Year For-Profit Examples

2-Year For-Profit

20c

Where Are the <2-Year Schools?


<2 Year Public

<2 Year For-Profit

21a

Genesee Valley BOCES Practical Nursing Program

Cayuga Onondaga BOCES Practical Nursing Program

Oswego County BOCES

Hamilton Fulton Montgomery BOCES

Practical Nursing Program

Dutchess BOCES School of Practical

Nursing

Veeb Nassau County School of Practical

Nursing

Adult & Continuing Education BCTS

Union County

Vocational Technical

School



<2 Year Public Examples

<2 Year Public

21b

Shear Ego International

School of Hair Design

National Tractor Trailer

School

Phillips Hairstyling

Institute

Adirondacks Beauty School

Modern Welding School

Beauty School of Middleton

Lincoln Technical Institute

Institute for Therapeutic

Massage

PC Age

Branford Hall Institute

Brittany Beauty School

Fortis Institute

Drake College of Business

Charles Stuart School of

Diamond Setting

Midway Paris Beauty School

Harlem School of Technology

NY School for Medical & Dental

Assistants



<2 Year For-Profit Examples

<2 Year For-Profit

21c

22 Source: Cellini and Darolia, “College Costs and Financial Constraints: Student Borrowing at For-Profit Institutions” Upjohn Institute

Conference Paper, October 2013; using NPSAS data.

$32,000

$46,000

$63,000

$72,000

$0,000

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

For-Profit Public <2-yr Public 4-yr Private Non-Profit

Entrants to For-Profits Are Low-Income

Median Gross Income of Entrants

23

15% 18%

57%

40%

23%

28%

69%

51%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Black Hispanic Female Over 25

Public

Private For-Profit

For-Profits Cater More to Minorities,

Women, and People Over 25 Years Old

Percent of 2012 Enrollment


24

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Public

Non-Profit

For-Profit

For-Profits Command by Far the

Largest Share of <2-Year Enrollment Share of Enrollment in <2 Year Institutions


Where Do <2 Year For-Profits Most Dominate?

For-Profit Share of Enrollment in <2 Year Colleges

TX

CA

MT

AZ

ID

NV

NM

CO

IL

OR

UT

KS

WY

IANE

SD

MN

ND

OK

FL

WI

MO

WA

AL GA

AR

LA

MI

IN

PA

NC

NY

MS

TN

VAKY

OH

SC

ME

WV

VTMI NH

MD

NJ

MA

CT

DE

RIMARI

Enrollment Share

0 - 50%

50 - 75%

75 - 85%

85 - 95%

95 - 100%

National Average: 75%


26

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Public

Non-Profit

For-Profit

Share of For-Profits in 2-Year College

Enrollment Has Been Rising Share of Enrollment in 2-Year Institutions


TX

CA

MT

AZ

ID

NV

NM

CO

IL

OR

UT

KS

WY

IANE

SD

MN

ND

OK

FL

WI

MO

WA

AL GA

AR

LA

MI

IN

PA

NC

NY

MS

TN

VAKY

OH

SC

ME

WV

VTMI NH

MD

NJ

MA

CT

DE

RIMARI

Enrollment Share

0 - 5%

5 - 10%

10 - 20%

20 - 45%

45 - 100%

Where Do 2 Year For-Profits Most Dominate?

For-Profit Share of Enrollment in 2 Year Colleges

National Average: 5%


Growth of

For-Profit Institutions:

Did Recession Matter?

Total Full-Time Undergraduate Enrollment

0

500

1000

1500

2000

2500

3000

3500

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013


For-Profit <2 Years

For-Profit 2 Years

Public 2 Years

Public <2 Years

Thousands

29

30

50

75

100

125

150

175

200

225

250

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Index (1999/2000 = 100)

For-Profit <2 Years

For-Profit 2 Years

Public 2 Years

Public <2 Years

For-Profits Have Grown Much Faster Than

Publics, Especially During the Recession


31

0%

10%

20%

30%

40%

50%

60%

70%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Percent of Enrollment at Least 25 Years Old

For-Profit <2 Years

For-Profit 2 Years Public 2 Years

Public <2 Years

Much of the Growth in For-Profits

Coming From Older Students


Tuition Patterns

33

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


Note: Chart depicts average tuition and fees of largest program for <2 year institutions, and average in-state tuition for 2-year institutions.

For-Profit <2 Years

For-Profit 2 Years

Public 2 Years

Public <2 Years

Average Tuition at For-Profits

Is Higher Than at Comparable Publics Gross Tuition

Grants and Net Price


Note: Net Tuition defined by Average Tuition minus Average Grants Received.

Even Though For-Profit Students Receive

Large Support Through Pell Grants,

Net Tuition Is Higher Than Publics

For-Profit <2 Years

For-Profit 2 Years

Public 2 Years

Public <2 Years

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

2010 2011 2012

Average Net Tuition

Patterns in Student Loans

37 Source: National Student Loan Data System (NSLDS).

0%

10%

20%

30%

40%

50%

60%

70%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

For-Profit

Public

For-Profit Enrollees More Likely to Take

Out Student Loans to Finance Education

Percent of Students Receiving Subsidized Direct Loans

38

Average Loan Size at For-Profits

Is Higher Than in Publics

Source: National Student Loan Data System (NSLDS).

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

$3,200

$3,400

$3,600

$3,800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

For-Profit

Public

Average Loan Size

Outcomes

40

For-Profit Completion Rates


41% 43%

57%

66%

0%

10%

20%

30%

40%

50%

60%

70%

2 Year <2 Year

Within 100% of normal time


•Only about 40% of

For-Profit students

complete their

program within 100%

of its normal time

•But closer to 60%

complete within

150% of normal time



Where Do We Stand Now?

• For-profit institutions serve many different niches

• Completion rates are reasonably good

• During recession, may have provided retraining

opportunities for displaced workers

• Research raises questions about their benefits:

Student loan default rates at for-profits are

relatively high

Employment and earnings picture not too rosy

• How will newly minted for profit graduates be affected

in the future?

41

Bottom Line

• During the Great Recession enrollment in for-profits

surged, but then declined as recovery set in

• Tuition amount and growth markedly higher at for-profits

than publics

• Consequently, for-profit students are typically more likely

to take loans and in larger amounts

• As the economy gets stronger, it remains to be seen how

the recent rise in for-profit enrollment affects these

students, and the economy

42

Regional Economic Press Briefing

November 20, 2013

The views expressed here are those of the presenters and do not necessarily represent

those of the Federal Reserve Bank of New York or the Federal Reserve System.

Reference Slides

Regional Employment Trends Index of Total Employment, Seasonally Adjusted


90

92

94

96

98

100

102

104

106


United States

New York City

Oct Long Island

Northern New Jersey

Aug

Upstate NY

Last Briefing Shading indicates NBER recession

Index (December 2007 = 100)

Job Change During Recession and Recovery Local Peak to Local Trough and Local Trough to August 2013

46

-6.3%

-1.9%

-3.6%

-4.9%

-4.3%

-6.6%

-5.7%

-4.0%

-3.7%

-5.5%

-3.6%

-8.2%

-4.1%

-6.9%

-3.7%

-6.7%

-6.8%

-4.0%

5.3%

8.3%

7.9%

7.0%

6.6%

4.2%

4.0%

3.3%

3.1%

2.9%

2.9%

2.8%

1.7%

1.7%

1.1%

1.0%

United States

Ithaca

New York City

Glens Falls

Long Island

Edison

Bergen-Hudson-Passaic

Albany

Buffalo

Putnam-Rockland-Westchester

Rochester

Newark

Syracuse

Kingston

Poughkeepsie

Elmira

Binghamton

Utica

Source: U.S. Bureau of Labor Statistics and Moody’s Economy.com.

Local Recovery (Through August) Local Recession

No Recovery

No Recovery

Most Student Aid Comes from

Pell Grants at For-Profits

Pell Grants 52%

Federal Student Aid

4%

State and Local

Grants 3%

Institution Aid 5%

Tuition Discounts

33%

Public 2 and < 2 years

Pell Grants 87%

Federal Student

Aid 4%

State and Local

Student Aid 7%

Institution Aid 2%

For-Profits

Percent of Total 2011 Aid

Source: Integrated Postsecondary Education Data System (IPEDS). 47

For-Profits Finance Themselves

Mostly Through Tuition

Tuition Revenue

16%

Federal Grants

4%

State and Local

Grants 3%

Private Grants

1%

Other Revenue

36%

Gov't Funding

40%

Public 2 and < 2 years

Tuition Revenue

83%

Federal Grants

9%

State and Local

Grants 1%

Private Grants

0%

Other Revenue

7%

For-Profits

Percent of 2011 Revenue

48


Note: Other Revenue includes revenue from gifts, investment income, hospital services, research and development centers, auxiliary services

(e.g. room and board, athletics etc.)

Additional Resources

• Liberty Street Economics Blog

Just Released: Lifting the veil – For-Profits in the Higher

Education Landscape

• Interactive charts available on our website

Private For-Profit Institutions in Higher Education

http://www.newyorkfed.org/regional/nonprofit-forprofit-colleges/

49







regional economic press briefing · source: u.s. bureau of labor statistics and haver analytics. 7...

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