Getting to Best : Opportunities and Challenges in Achieving Virginia s Higher Education Goals

Getting to Best : Opportunities and Challenges in Achieving Virginia s Higher Education Goals Demographic and Economic Landscape October 25, 2017

Overview National economy continues to grow: graduates have more opportunities Demographics shifts toward older population: not as much increase in college ago population Student debt: can policies reduce it? Occupations/skills in demand vary by region Certifications that take less than a year to earn are on the rise Copyright 2017 Chmura Economics & Analytics 2

National Economy 3

Real GDP Growth Picked Up But Qtrs 3 and 4 Will Be Impacted by Hurricane 9 th year of expansion (99 mo; record 120 mo 3/91-3/01) 8.0 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0 Real Gross Domestic Product Quarterly Annualized Percent Change -10.0 2001 2003 2005 2007 2009 2011 2013 2015 2017 Source: BEA. Data through 2 nd Qtr 2017 Copyright 2017 Chmura Economics & Analytics 4

National Forecast:Tax Cuts Can Make a Difference National Forecast Summary 2016-17 Actual 2017-18 Forecast Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Real Gross Domestic Product 2.8 1.8 1.2 3.0 3.0 2.2 3.3 3.2 Consumptions Expenditures 2.8 2.9 1.9 3.3 2.3 2.3 2.9 3.1 Residential Investment -4.5 7.1 11.1-6.5 4.4 3.7 2.7 1.7 Nonresidential Investment 3.4 0.2 7.1 6.9 6.4 4.5 7.3 7.9 Equipment -2.1 1.8 4.4 8.8 7.1 6.0 9.0 9.1 Intellectual Property Product 4.2-0.3 5.7 4.9 4.2 3.1 3.7 4.2 Government Expenditure 0.5 0.2-0.6-0.3 0.6 1.1 1.1 0.7 Net Exports, Goods & Services -557.2-630.9-622.1-612.9-613.3-621.7-623.4-631.0 (Billions of 2009 Dollars) Percentage Change From a Year Ago (%) Consumer Price Index 1.1 1.8 2.6 1.9 1.9 1.7 1.4 2.0 Yields (%) Federal Funds Rate 0.4 0.5 0.7 1.0 1.2 1.3 1.5 1.7 Prime Rate 3.5 3.5 3.8 4.0 4.3 4.4 4.6 4.8 10-Year Treasury 1.6 2.1 2.4 2.3 2.3 2.5 2.7 3.1 30-Year Conventional Mortgage 3.4 3.8 4.2 4.0 3.9 4.1 4.4 4.7 Source: Chmura Economics & Analytics Note: Yields reported for the average of the quarter GDP based on advanced figures Copyright 2017 Chmura Economics & Analytics 5 Source: Chmura Economics & Analytics Note: Yields reported for the average of the quarter GDP based on advanced figures (Billions of 2009 Dollars)

Demographics 6

VA Age Cohorts are Similar to the Nation But Differ by Region 25% 20% 22% 23% Highest Enrollment Rates in Postsecondary Education 15% 14% 14% 13% 13% 13% 13% 13% 13% 10% 9% 9% 7% 7% 6% 6% 5% 3% 3% 0% 0-17 18-19 20-24 25-34 35-44 45-54 55-64 65-74 75-100 VA US Copyright 2017 Chmura Economics & Analytics 7

Virginia Population 2010-2030: Little Growth in Student-Age Population 2,500,000 2,000,000 1,500,000 1,000,000 +24,402 500,000 0-8,977 Age 0-17 Age 18-19 Age 20-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65-74 Age 75-100 2010 2030 Copyright 2017 Chmura Economics & Analytics 8

Virginia Population 2010-2030 Large Increases in Age 55+ 2,500,000 2,000,000 1,500,000 1,000,000 +24,402 +92,932 +436,236 +443,367 500,000 0-8,977 Age 0-17 Age 18-19 Age 20-24 Age 25-34 Age 35-44 Age 45-54 Age 55-64 Age 65-74 Age 75-100 2010 2030 Copyright 2017 Chmura Economics & Analytics 9

Student Debt 12

Student Debt Nears $1.5 Trillion http://www.finaid.org/loans/studentloandebtclock.phtml Outstanding student loan balances stood at $1.34 trillion as of June 30, 2017 according to Federal Reserve Bank of New York. Copyright 2017 Chmura Economics & Analytics 13

Exploring the Determinants of Student Loan Default Rates Data are for FY 2013 Graduate Cohort Latest available from U.S. Department of Education Default by spring 2016 Data are by college; not available by student Copyright 2017 Chmura Economics & Analytics 14

Graduation Rate & Percent Receiving Pell Grant Most Important in Explaining Default Rates FY 2013 Cohort Source of Analysis: Chmura Economics & Analytics and UPCEA, forthcoming. Copyright 2017 Chmura Economics & Analytics 15 Data Source: IPEDS, Department of Education.

Overall Economy: State Annual Average Wages & Unemployment Rate Impact Default Rates FY 2013 Cohort Source of Analysis: Chmura Economics & Analytics and UPCEA, forthcoming. Copyright 2017 Chmura Economics & Analytics 16 Data Source: Department of Education, JobsEQ, LAUS, QCEW.

Programs from which Students Graduate Impact Default Rates FY 2013 Cohort Source of Analysis: Chmura Economics & Analytics and UPCEA, forthcoming. Copyright 2017 Chmura Economics & Analytics 17 Data Source: Department of Education, JobsEQ, LAUS, QCEW, BLS, NCES.

Curriculum Offerings Default rates were higher for institutions that graduated students in curriculum where there is high competition in the state for those occupations because there are many graduates with the same skills Industry Demand (RVA) Growth & Retirement Banking Occupation Demand Growth & Retirement Market Research Analysts Curriculum Classification of Instructional Programs Marketing Management Copyright 2017 Chmura Economics & Analytics 18

What Occupations are In Demand? 19

Rank It Depends Where you are Located State Averages are Misleading Current Occupation Employment Copyright 2017 Chmura Economics & Analytics 20 Annual Average Wages Annual Repl Demand Total Annual Demand Avg. Annual Growth Percent Title Typical Entry-Level Education 1 Registered Nurses 64,226 $66,700 1,506 2,404 1.3% Bachelor's degree 2 General and Operations Managers 64,352 $136,300 1,737 2,283 0.8% Bachelor's degree 3 Managers, All Other 33,557 $127,800 2,036 2,268 0.7% Bachelor's degree 4 Accountants and Auditors 42,569 $83,400 1,264 1,750 1.1% Bachelor's degree 5 Management Analysts 45,625 $102,800 849 1,563 1.5% Bachelor's degree 6 Nursing Assistants 35,522 $26,000 818 1,465 1.7% Postsecondary non-degree award 7 Software Developers, Applications 34,813 $110,000 599 1,461 2.2% Bachelor's degree 8 Computer Systems Analysts 26,536 $98,500 391 1,088 2.4% Bachelor's degree 9 Elementary School Teachers, Ex Special Ed 37,001 $66,700 795 1,053 0.7% Bachelor's degree 10 Heavy and Tractor-Trailer Truck Drivers 42,562 $41,300 797 1,021 0.5% Postsecondary non-degree award 11 Teacher Assistants 31,648 $28,500 760 980 0.7% Some college, no degree 12 Hairdressers, Hairstylists, Cosmetologists 16,142 $36,100 685 850 1.0% Postsecondary non-degree award Secondary School Teachers, Ex Special and 13 Career/Technical Ed 26,922 $68,100 647 835 0.7% Bachelor's degree 14 Software Developers, Systems Software 23,106 $117,300 330 832 2.0% Bachelor's degree 15 Licensed Practical/Licensed Vocational Nurses 19,101 $41,400 512 832 1.6% Postsecondary non-degree award 16 Computer User Support Specialists 22,866 $55,200 315 741 1.7% Some college, no degree 17 Automotive Service Technicians/Mechanics 22,642 $43,700 704 735 0.1% Postsecondary non-degree award 18 Market Research Analysts/Marketing Specialists 19,019 $74,600 264 682 2.0% Bachelor's degree 19 Human Resources Specialists 18,781 $71,900 528 622 0.5% Bachelor's degree 20 Medical Assistants 14,360 $32,600 305 621 2.0% Postsecondary non-degree award Source: JobsEQ

Rank It Depends Where you are Located Northern Virginia Current Occupation Employment Copyright 2017 Chmura Economics & Analytics 21 Annual Average Wages Annual Repl Demand Total Annual Demand Avg. Annual Growth Percent Title 1 Managers, All Other 20,081 $131,300 1,229 1,402 0.8% Bachelor's degree 2 General and Operations Managers 31,431 $146,000 861 1,220 1.1% Bachelor's degree 3 Management Analysts 28,701 $102,800 540 1,061 1.7% Bachelor's degree 4 Software Developers, Applications 20,829 $113,400 360 889 2.3% Bachelor's degree 5 Accountants and Auditors 20,239 $90,000 608 887 1.3% Bachelor's degree 6 Computer Systems Analysts 15,733 $101,600 234 672 2.5% Bachelor's degree 7 Registered Nurses 15,126 $75,500 362 633 1.7% Bachelor's degree 8 Software Developers, Systems Software 15,523 $120,500 223 571 2.0% Bachelor's degree 9 Elementary School Teachers, Ex Special Ed 14,685 $73,600 323 498 1.1% Bachelor's degree 10 Teacher Assistants 11,726 $32,500 288 426 1.1% Some college, no degree 11 Computer User Support Specialists 11,674 $60,500 163 414 2.0% Some college, no degree Typical Entry-Level Education Secondary School Teachers, Ex Special and 12 Career/Technical Education 10,575 $74,700 260 387 1.1% Bachelor's degree 13 Nursing Assistants 7,771 $29,600 186 385 2.3% Postsecondary non-degree award 14 Market Research Analysts/Marketing Specialists 9,832 $76,600 139 383 2.2% Bachelor's degree 15 Hairdressers, Hairstylists, Cosmetologists 6,495 $35,300 279 362 1.2% Postsecondary non-degree award 16 Computer and Information Systems Mgrs 9,181 $163,400 122 344 2.2% Bachelor's degree 17 Lawyers 13,335 $163,800 251 342 0.7% Doctoral or professional degree 18 Business Operations Specialists, All Other 19,275 $95,300 229 322 0.5% Bachelor's degree 19 Network/Computer Systems Admin 10,202 $102,000 141 311 1.5% Bachelor's degree 20 Human Resources Specialists 8,708 $81,700 247 306 0.7% Bachelor's degree Source: JobsEQ

Rank It Depends Where you are Located Danville Micropolitan Area Current Occupation Employment Copyright 2017 Chmura Economics & Analytics 22 Annual Average Wages Annual Repl Demand Total Annual Demand Avg. Annual Growth Percent Title Typical Entry-Level Education 1 Nursing Assistants 686 $24,600 16 26 1.5% Postsecondary non-degree award 2 Registered Nurses 690 $59,200 16 23 1.0% Bachelor's degree 3 Licensed Practical/Licensed Vocational Nurses 378 $41,500 10 16 1.4% Postsecondary non-degree award 4 General and Operations Managers 456 $92,100 12 11-0.2% Bachelor's degree 5 Automotive Service Technicians and Mechanics 279 $34,700 9 8-0.1% Postsecondary non-degree award 6 Hairdressers, Hairstylists, and Cosmetologists 178 $27,500 7 8 0.4% Postsecondary non-degree award 7 Teacher Assistants 400 $23,400 9 8-0.3% Some college, no degree 8 Managers, All Other 129 $100,400 8 8 0.1% Bachelor's degree 9 Substitute Teachers 429 $23,400 9 7-0.3% Bachelor's degree 10 Elementary School Teachers, Ex Special Education 472 $51,700 10 7-0.5% Bachelor's degree 11 Heavy and Tractor-Trailer Truck Drivers 475 $38,700 9 7-0.4% Postsecondary non-degree award 12 Secondary School Teachers,Ex Special/Career/Tech Ed 364 $53,400 8 6-0.5% Bachelor's degree 13 Accountants and Auditors 203 $65,600 6 6 0.2% Bachelor's degree 14 Emergency Medical Technicians and Paramedics 120 $30,000 2 6 2.7% Postsecondary non-degree award 15 Medical Assistants 135 $28,900 3 5 1.6% Postsecondary non-degree award 16 Physical Therapists 71 $101,200 2 4 3.0% Doctoral or professional degree 17 Medical and Health Services Managers 98 $90,100 3 4 1.4% Bachelor's degree 18 Child, Family, and School Social Workers 131 $42,100 3 4 0.5% Bachelor's degree 19 Middle School Teachers, Ex Special/Career/Tech Ed 226 $51,200 5 4-0.5% Bachelor's degree 20 Physicians and Surgeons, All Other 83 $187,300 2 3 1.2% Doctoral or professional degree Source: JobsEQ

Number of Completions Shorter Certifications are on the Rise 500,000 480,000 Postsecondary Certificate Completions, United States Certificate: Less than 1 Yr 460,000 440,000 420,000 Certificate: Greater than 1 Yr But Less than 2 Yrs 400,000 380,000 Source: NCES. 2012 2013 2014 2015 2016 http://www.chmuraecon.com/blog/2017/october/24/shorter-certifications-on-the-rise/ Copyright 2017 Chmura Economics & Analytics 24

Conclusions Expansions don t die of old age: No imbalances in sight Demographic shifts point to little growth in college-age students Student loan defaults Students need to leave with some sort of credential The assortment of programs offered by a school is important Greater the alignment between schools and in-demand jobs, the better off the graduate will be 25