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NYC’s Growing Higher Ed Sector Contributes $35 Billion a Year to City Economy, Study Finds
This September, Vanderbilt University signed a 99-year lease for 13 buildings in Chelsea where it plans to create a third major center for the Nashville-based school, which ranks as one of the best universities in the country.
Boston-based Northeastern University is absorbing Marymount College to establish an outpost in New York City, its 14th campus. Northeastern says it wants to be in the city because it is the nation’s financial capital and boasts a strong tech sector. Both industries are seeking college graduates who need advanced training to further their careers.
Meanwhile, the city is in talks with a dozen colleges who are either hoping to emulate Vanderbilt and Northeastern by establishing a beachhead or expand their current foothold, according to Andrew Kimball, president of the city’s Economic Development Corporation.
The expanding higher education sector’s economic impact on the city is under appreciated, according to a study being released Monday by the EDC. The agency counts more than 140,000 higher ed workers across more than 100 institutions, which collectively generate $35 billion in economic activity for the city each year.
“We should be shouting from the mountain tops the importance of the sector and doing everything we can to grow it,” said Kimball.
But the report comes as a fraught time for higher education. President-elect Donald Trump and the Republicans in Congress have become increasingly hostile to higher education, which they say has become bastions of left-wing activism and threatened to curtail federal aid to those schools.
And with the Republicans focused on passing a major tax cut, many areas of federal spending will be vulnerable to being reduced to offset the lost revenue. Restrictions on immigration could also be a problem since one-third of current students in New York are born outside the United States.
The Bloomberg Administration had made higher education a priority, including by launching a competition that led to the establishment of Cornell Tech, a rapidly growing graduate engineering school on Roosevelt Island.
The EDC report counts 503,000 students enrolled in the city and says that 147,000 degrees are awarded here annually. An impressive two-thirds of the newly minted graduates remain in the city. In the Bay area, only 56% of graduates stay put, and the figure for Boston is only 40%.
As the economy changes, students are increasingly focused on science, technologies, engineering and math (STEM). The percentage of STEM degrees increased by 42% from 2013 to 2023, while degrees awarded in business, health care, liberal arts and law dropped during that same decade.
College and university employment is also more diverse than in other sectors like finance and tech. About 40% of jobs are held by professors and other educators with advanced degrees. They have a median wage of $126,900 annually.
But other higher ed workers occupy a range of jobs, including security, food services, tech support, finance and administration, many of which do not require a college degree. The median wage of those employees is $60,300, slightly higher than the citywide average.
CUNY accounts for about half the students in the city. Its population is the most diverse, and the university is a crucial source of jobs in the boroughs outside Manhattan, notes Chancellor Félix V. Matos Rodríguez.
“We are the engine for the local talent to excel and contribute to the life of the city,” he said.
Vanderbilt has long known how important New York is to its students. It ranks second to Nashville as a home for alums, says C. Cybele Raver, the school’s provost.
The university’s decision to build a NYC campus stems from the city’s reputation as a magnet for talent and its strength in industries ranging from media to technology to finance to the arts.
“We are really excited about those opportunities and the way they will complement Nashville, not compete with it,” Raver said.
Vanderbilt’s provost says the school is still working out the costs involved, but the Chelsea campus, now home to the General Theological Seminary, needs more than $30 million in deferred maintenance.
Vanderbilt isn’t willing to say what it will offer at the New York campus in part because it says it is exploring the options and in part because whatever they plan will need approval of the New York education authorities.
Not every data point for higher ed in NYC is so robust. With demographic trends resulting in a shrinking pool of potential students, the number of students in New York City has declined by about 12%, slightly more than the national average.
And the expansion of the largest schools, especially their appetite for real estate, has drawn criticism for eroding the city’s tax base.
Research by the Center for New York City Affairs at the New School found that the 10 largest universities and hospitals in the city controlled real estate worth more than $20 billion, all of which is exempt from property taxes. Instituting a payment in lieu of taxes between 25% and 50% of what they would normally owe would raise anywhere from $345 to $690 million a year.
Last year, state legislators introduced legislation that would require private colleges to pay their full property taxes, sending the money to CUNY. The bill for Columbia and NYU would be $347 million last year, the legislators said.
Kimball dismisses the idea of taxing universities. “This is a really important, thriving sector and we should be figuring out more reasons for them to grow here, not shrink.”
CUNY’s Rodríguez recognizes the challenges of Republican control in Washington could pose for CUNY, which will get $317 million or 7% of its budget this year. A more worrisome scenario, he says, is if Republicans target Pell grants which go to low income students. The 57% of CUNY students who qualified for the grants received $621.8 million.
But he adds that a Trump Administration emphasis on workforce training could be good for CUNY, a priority for the university. And he remains hopeful.
“I am in higher ed because I am a born optimist,” he said. “And I remain that way and that the value we bring to the table is well documented.”
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