When the economy sours, one of the few sectors to profit is usually postgraduate education. Laid-off employees, or simply scared ones, historically have flocked to school to beef up their résumés in the hopes of better positioning themselves in the job market.
But for some real estate professionals, this recession is different.
At New York University’s Schack Institute of Real Estate Continuing Education Program, which offers over 500 classes each year, enrollment dropped 10 to 15 percent between fall 2008 and fall 2009.
The Real Estate Board of New York has also seen a 5 to 8 percent decline in their for-credit continuing education program participants, who typically register in order to maintain their licenses.
To be sure, one reason for these enrollment drops is simply that the real estate industry has shrunk. Brokers currently need 22.5 hours in continuing education credits every two years in order to maintain their licenses. Fewer brokers means fewer students.
Those who are sticking it out in real estate might also be putting off their required hours for as long as possible, hoping that next year will bring more financial stability, said Eileen Spinola, senior vice president of brokerage services and education at REBNY.
A typical seven-and-a-half-hour continuing education course costs $40 for REBNY members and $70 for nonmembers. Interestingly, REBNY’s noncredit courses, which are free and only for members, have been packed, Spinola said.
Still, some say that’s not the whole story.
The decline might also be a result of companies cutting back on employee benefits, including paying for, or reimbursing, tuition for continuing education.
In the past, close to half the students in NYU’s continuing education courses were likely being reimbursed for their tuition by brokerages or other real estate firms they worked for, said Bob Morgenstern, who runs the program there. He said he believes the number of companies footing the bill for that expense has been “drastically” reduced because of the downturn.
Several leading New York real estate firms did not respond to requests for comment on whether they had scaled back their tuition reimbursement budgets. But real estate companies, like most others in this economy, are cutting back wherever they can.
At the Commercial Real Estate Women’s annual convention in Boston this fall, far more of the 940 attendees — including a few dozen from New York — paid the registration fees and travel costs out-of-pocket than in previous years, said commercial real estate lawyer Jane Smith, who is president of CREW and a partner at the law firm Fulbright & Jaworski.
Cutbacks in education spending disproportionately affect the industry’s youngest talent, explained Erik Dowling, co-president of the Young Real Estate Professionals of New York and a vice president with commercial real estate finance company Strategic Capital Solutions.
“A lot of people use their first job as a means to get fully compensated for secondary education, or at least partially sponsored,” Dowling said. “I think what’s probably happening is, you have a certain amount of people who lose their jobs and have the wherewithal to pay … but that’s being more than offset by people who don’t have the money to go to school and would rely on the corporate sponsorship for continuing education.”
Even those who do have the money for continuing education have become more discriminating about what they are spending their cash on.
At a time when everyone has less disposable income, professionals “don’t have the luxury of just piling on a few more courses,” Morgenstern said. “They want a piece of paper coming out of it — they want the certificate.”
Morgenstern said NYU is developing accelerated programs and courses with online elements in order to respond to the growing demand for those who want to “reposition themselves” in the industry in the most cost-effective way possible.
Meanwhile, some would-be students are rethinking whether additional coursework is the best approach.
Dowling, from the young professionals organization, said he’s seen more unpaid real estate internships popping up than ever before in New York, and not just during the traditionally busy summer months.
In this difficult economic environment, today’s interns may be as many as four or five years out of college, he said.
Ken Krasnow, managing partner at Massey Knakal, said the firm no longer pays most of its interns because between the rising number of candidates looking for jobs and the shrinking number of positions available, “we realized that we didn’t necessarily have to.”
Interns may be unpaid, but at least they don’t walk away with student loans. “Basically, they are substituting on-the-job education for in-the-classroom education,” Dowling explained, adding that he believes the rise in internships is affecting postgraduate enrollments, too.
The current recession “might be causing people to reevaluate how valuable secondary education really is when they see so many postgraduates cast aside,” Dowling said.