Employee education benefits in the United States

Last updated

Educational assistance benefits are employee benefits that allow workers to participate in educational programs for free or at a reduced cost. These benefits are administered through education assistance programs. Education assistance programs are used by corporations to recruit, retain, and retrain employees and to increase goodwill with former employees and the public. [1] They also serve as a corporate tax break.

Contents

Corporations with these programs include Walmart (Live Better U), Target Corporation, Amazon (Career Choice), McDonald's (Archways to Opportunity) and Kroger (Feed Your Future). [2] The US Department of Defense also has a program called DOD Tuition Assistance that provides troops with funds for higher education and the US Department of Veterans Affairs has the Forever GI Bill for eligible servicemembers, veterans, and select family members. Some corporations employ private companies, such as Bright Horizons and Guild Education, to manage tuition payments to specific colleges and other education providers. [3] [4] According to Wharton College professor Peter Cappelli, a small percentage of workers use educational assistance benefits, but the programs "do reduce employee turnover and help businesses identify their most productive workers." [5] [6]

History

US history has seen a rise and fall of benefits for working people. In 1875, the American Express Railroad Company established the first private pension plan in the United States. Other large businesses soon followed. [7]

During the Great Depression, the US government's New Deal provided jobs and job skills training. [8]

The post World War II GI Bill also provided opportunities for those who served. Following World War II employer health plans rose to 70 percent of all employers by the 1960s. [9]

In the 1980s, US corporations began reducing training and other benefits for employees. The prevalence of employee education benefits programs was further reduced during the Great Recession, from 61 percent of companies surveyed in 2008 to 51 percent in 2018. [10]

In 2021, a refound popularity among large employers has been met with skepticism. According to Peter Cappelli, director of Wharton’s Center for Human Resources, “They’re doing this because it sounds great and it’s cheap – almost no one can use them, they are all online/cut rate degree programs." [11]

Participation

Between one and ten percent of all employees typically use employee education benefits. Because many employees live paycheck to paycheck, and employers often reimburse workers instead of paying up front, about half of all money designated for these programs goes unused. [12]

Tax breaks

Employers may deduct all that they pay for the employee's educational costs as a business expense. [13]

The US Internal Revenue Service allows workers to deduct $5,250 in employee education benefits from taxable income. [14]

Corporations

Amazon Career Choice

Amazon's Career Choice program pre-pays 95 percent of tuition for courses in high-demand fields. The corporation has said it will spend more than $700 million to upskill 100,000 of their U.S. employees for in-demand jobs such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies and nursing. At the time of its inception in 2012, critics called it a "PR stunt." [15] By 2020, 25,000 associates from 14 countries had participated. [16]

Department of Defense Tuition Assistance

DOD Tuition Assistance is a US Department of Defense (DOD) program that funds higher education programming for US military servicemembers. Currently, DOD TA funds servicemember's college tuition and fees, not to exceed $250 per semester credit hour or $166 per quarter credit hour and not to exceed $4,500 per fiscal year, Oct. 1 through Sept. 30. In 2019, DOD spent more than $492 million on the program that year and about 220,000 troops used the benefits. [17]

Department of Veterans Affairs GI Bill

The GI Bill is the largest employee benefits program in the US. The program was originally for veterans of World War II. [18] The latest iteration of the GI Bill is the Forever GI Bill.

FedEx LiFE

The FedEx program LiFE Inspired by FedEx (LiFE) is partnering with University of Memphis Global to offer educational benefits and boost employee retention. [19]

Kroger Feed Your Future

As part of the company's employee growth effort, Kroger supports full-time and part-time workers in pursuing GEDs, MBAs or professional certifications [20]

McDonalds Archways to Opportunity

McDonald's employees and the employees of participating independent franchises offer employee benefits to improve English language skills, earn a high school diploma, work toward a college degree, and get counseling about education and career plans. The corporation has spent more than $100 million on the program over the past four years. Independent franchises are charged for participating in the program. [21] McDonalds' education partners are Colorado Technical University, Excelsior College, and DePaul University. [22]

Starbucks College Achievement Plan

Starbucks has offered 100 percent tuition coverage discounts for Arizona State University since 2014. The goal of the program was to graduate 25,000 workers by 2025.By 2019, about 3000 employees had gotten degrees. According to the company "participants stay at Starbucks 50 percent longer and are promoted at three times the rate of U.S. retail employees who don't use the program." [23]

Target Corporation's Debt-Free Education Assistance Program

In August 2021 Target Corporation said it was investing $200 million over the next four years, offering workers “'debt-free undergraduate degrees, certificates, certifications, free textbooks and more with no out-of-pocket costs' in 250 business-aligned programs from more than 40 schools, colleges and universities." [24] The cost to Target is approximately $147 per worker per year. [25]

Walmart Live Better U (LBU)

In 2021, Walmart reported that they would be offering education benefits to 1.6 million workers without any tuition payout by workers. Walmart claimed to be committing $1 billion over 5 years for this effort.[ citation needed ] According to Walmart, program participants are "two times more likely to get promoted, and they retain at a significantly higher rate."[ citation needed ] In 2020, according to Walmart, "about 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit." [26] In 2021, a Walmart official stated that 52,000 workers had participated and 8,000 had earned a degree or certificate. [27] The Lumina Foundation reported that Walmart employee participation had increased to 30,000 active in the program. In three years the LBU program had the following results: 336 earned bachelor’s degrees, 50 earned associate degrees, and 1,805 earned certificates. [28]

Waste Management's Your Tomorrow

Waste Management's "Your Tomorrow" program provides access to more than 170 fully-funded programs. In 2022, Your Tomorrow will include employees' children and spouses. [29]

Tuition discounts

Some corporations offer tuition discounts to their employees with schools they partner with.

Intermediaries

Bright Horizons EdAssist Solutions

Bright Horizons provides workforce education (tuition discounts from about 220 schools) and student loan support for employees from several companies. Its clients include CVS Health, Home Depot, Children's Health, Bank of America, and Allstate Insurance. [30] [31]

Guild Education

Guild works for corporate clients, including Walmart, Target, Lowe's, Chipotle, Taco Bell, Disney and Discover Financial. [32] Its education partners include Penn Foster High School, University of Arizona, Colorado State University online, Purdue University Global (formerly Kaplan University), University of Denver University College, Johnson and Wales University Online, Brandman University, Bellevue University, Oregon State e-university, Rio Salado College and Spelman College. According to Guild Education CEO Rachel Romer Carlson "the average worker who enrolls in education assistance is about 32, a woman of color and often a mom." [33]

See also

Related Research Articles

<span class="mw-page-title-main">Walmart</span> American multinational retail corporation operating department stores

Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores in the United States and 23 other countries. It is headquartered in Bentonville, Arkansas. The company was founded by brothers Sam and James "Bud" Walton in nearby Rogers, Arkansas in 1962 and incorporated under Delaware General Corporation Law on October 31, 1969. It also owns and operates Sam's Club retail warehouses.

<span class="mw-page-title-main">G.I. Bill</span> U.S. law providing benefits for World War II veterans

The G.I. Bill, formally known as the Servicemen's Readjustment Act of 1944, was a law that provided a range of benefits for some of the returning World War II veterans. The original G.I. Bill expired in 1956, but the term "G.I. Bill" is still used to refer to programs created to assist American military veterans.

<span class="mw-page-title-main">Labor force in the United States</span> Overview of the labor force in the United States

The labor force is the actual number of people available for work and is the sum of the employed and the unemployed. The U.S. labor force reached a high of 164.6 million persons in February 2020, just at the start of the COVID-19 pandemic in the United States. Before the pandemic, the U.S. labor force had risen each year since 1960 with the exception of the period following the Great Recession, when it remained below 2008 levels from 2009 to 2011. In 2021, The Great Resignation resulted in record numbers in voluntary turn over for American workers.

<span class="mw-page-title-main">University of Phoenix</span> American for-profit university

University of Phoenix (UoPX) is a private for-profit university headquartered in Phoenix, Arizona. Founded in 1976, the university confers certificates and degrees at the certificate, associate, bachelor's, master's, and doctoral degree levels. It is institutionally accredited by the Higher Learning Commission and has an open enrollment admissions policy for many undergraduate programs. The school is owned by Apollo Global Management and Vistria Group.

The University of Arizona Global Campus is a public online university affiliated with the University of Arizona. The university announced a deal to acquire Ashford University in 2020 and completed the deal in 2023.

<span class="mw-page-title-main">Kaplan, Inc.</span> International educational services company

Kaplan, Inc. is an international educational services company that provides educational and training services to colleges, universities, businesses and individuals around the world. Founded in 1938 by Stanley Kaplan, the company offers a variety of test preparation, certifications, and student support services. The company is headquartered in Fort Lauderdale, Florida, and is a wholly owned subsidiary of Graham Holdings Company.

Human resource management (HRM) is the strategic and coherent approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives. Human resource management is primarily concerned with the management of people within organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and reward management, such as managing pay and employee benefits systems. HR also concerns itself with organizational change and industrial relations, or the balancing of organizational practices with requirements arising from collective bargaining and governmental laws.

<span class="mw-page-title-main">Employee benefits</span> Non-wage compensation provided to employees in addition to normal wages or salaries

Employee benefits and benefits in kind, also called fringe benefits, perquisites, or perks, include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. Instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a "salary packaging" or "salary exchange" arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Examples of these benefits include: housing furnished or not, with or without free utilities; group insurance ; disability income protection; retirement benefits; daycare; tuition reimbursement; sick leave; vacation ; social security; profit sharing; employer student loan contributions; conveyancing; long service leave; domestic help (servants); and other specialized benefits.

<span class="mw-page-title-main">Higher education in the United States</span> Education beyond high school

In the United States, higher education is an optional stage of formal learning following secondary education. It is also referred to as post-secondary education, third-stage, third-level, or tertiary education. It covers stages 5 to 8 on the International ISCED 2011 scale. It is delivered at 3,931 Title IV degree-granting institutions, known as colleges or universities. These may be public or private universities, research universities, liberal arts colleges, community colleges, or for-profit colleges. U.S. higher education is loosely regulated by the government and by several third-party organizations.

<span class="mw-page-title-main">American Public University System</span> American university company

American Public University System (APUS) is a private, for-profit, online university system with its headquarters in Charles Town, West Virginia. It is composed of American Military University (AMU) and American Public University (APU). APUS is wholly owned by American Public Education, Inc., a publicly traded private-sector corporation. APUS maintains corporate and academic offices in Charles Town, West Virginia. APUS offers associates, bachelors, masters, and doctoral degrees, in addition to dual degrees, certificate programs and learning tracks.

<span class="mw-page-title-main">Society for Human Resource Management</span> Professional human resources membership association

The Society for Human Resource Management (SHRM) is a professional human resources membership association headquartered in Alexandria, Virginia. SHRM promotes the role of HR as a profession and provides education, certification, and networking to its members, while lobbying Congress on issues pertinent to labor management.

<span class="mw-page-title-main">Post-9/11 Veterans Educational Assistance Act of 2008</span> United States law

The Post-9/11 Veterans Educational Assistance Act of 2008 is Title V of the Supplemental Appropriations Act of 2008, Pub. L.Tooltip Public Law  110–252 (text)(PDF), H.R. 2642, an Act of Congress which became law on June 30, 2008. The act amended Part III of Title 38, United States Code to include a new Chapter 33, which expands the educational benefits for military veterans who have served since September 11, 2001. At various times the new education benefits have been referred to as the Post-9/11 GI Bill, the 21st Century G.I. Bill of Rights, or the Webb G.I. Bill, with many current references calling it simply the new G.I. Bill. President George W. Bush signed H.R. 2642 into law on June 30, 2008.

<span class="mw-page-title-main">Wage theft</span> Denial of wages or employee benefits rightfully owed to an employee

Wage theft is the failing to pay wages or provide employee benefits owed to an employee by contract or law. It can be conducted by employers in various ways, among them failing to pay overtime; violating minimum-wage laws; the misclassification of employees as independent contractors; illegal deductions in pay; forcing employees to work "off the clock", not paying annual leave or holiday entitlements, or simply not paying an employee at all.

Tuition.io is an American company that enables other companies to provide employer-paid student loan contributions as an employee benefit. The company is headquartered in Santa Monica, California.

<span class="mw-page-title-main">GI Bill Tuition Fairness Act of 2013</span> Bill of the 113th U.S. Congress

The G.I. Bill Tuition Fairness Act of 2013 is a bill that would require colleges to charge veterans the in-state tuition rates regardless of whether they meet the residency requirement. The bill also makes several other changes related to veterans benefits, such as extending the time period during which veterans are eligible for job training. The bill passed the House of Representatives on February 4, 2014 during the 113th United States Congress.

For-profit higher education in the United States refers to the commercialization and privatization of American higher education institutions. For-profit colleges have been the most recognizable for-profit institutions, and more recently with online program managers, but commercialization has been a part of US higher education for centuries. Privatization of public institutions has been increasing since at least the 1980s.

Purdue University Global, Inc. is a public online university that is a separately accredited part of the Purdue University system. Its primary focus is educating working adults.

Guild, formerly known as Guild Education, is a private company headquartered in Denver, Colorado that is employed by Fortune 1000 companies to manage their education assistance benefits. Guild works for corporate employer clients to facilitate direct payment for courses to education provider clients and offers marketing services to the education provider clients.

DOD Tuition Assistance is a US Department of Defense (DOD) program that fund higher education programming for US military servicemembers who wish to attend college before their service obligation ends. Currently, DOD TA funds servicemember's college tuition and fees, not to exceed $250 per semester credit hour or $166 per quarter credit hour and not to exceed $4,500 per fiscal year, Oct. 1 through Sept. 30. In 2019, DOD spent more than $492 million on the program that year and about 220,000 troops used the benefits.

Absence management, also known as leave management, is a combination of employer policies, procedures, or programs designed to handle employee leaves of absence and minimize the impact of those absences on the employer. Absence management programs aim to maximize productivity by supporting an employee from initial absence through return-to-work and stay-at-work plans.

References

  1. ↑ "Evaluating employee education benefits: Tuition assistance, tuition reimbursement & more". Brandman University. Retrieved 3 July 2021.
  2. ↑ Upskill America; Fall, Jaime S. "Models of Upskilling: College Degrees". Aspen Institute . Retrieved 3 July 2021.
  3. ↑ Berman, Jillian. "Why Walmart, Disney and so many other companies are paying for their employees' college education". MarketWatch . Retrieved 15 March 2021.
  4. ↑ Lederman, Doug. "Boom, Not Bust, for Employer-Funded Learning". Inside Higher Ed . Retrieved 3 July 2021.
  5. ↑ Cappelli, Peter. "Why Do Employers Pay For College?". National Bureau of Economic Research . Retrieved 25 March 2021.
  6. ↑ Merrick, Amy. "Education Benefits Present a Learning Opportunity". Society for Human Resource Management . Retrieved 3 July 2021.
  7. ↑ "A HISTORY OF EMPLOYEE BENEFITS AND TAXATION". /taxandbusinessonline.villanova.edu. Villanova University. Retrieved 4 August 2021.
  8. ↑ "The Living New Deal". livingnewdeal.org. Living New Deal. Retrieved 4 August 2021.
  9. ↑ "The History of Benefits". workplaceconsultants.net/com. Workplace Consultants. Retrieved 4 August 2021.
  10. ↑ Merick, Amy. "Education Benefits Present a Learning Opportunity". shrm.org. SHRM. Retrieved 4 August 2021.
  11. ↑ Rosenbaum, Eric. "Amazon, Walmart, Target are paying for college, but money isn't everything in education". www.cnbc.com. CNBC. Retrieved 30 September 2021.
  12. ↑ Pulkkinen, Levi. "Employers have funds, workers need degrees. Why are dollars going unused?". The Christian Science Monitor. Retrieved 13 July 2021.
  13. ↑ Milano, Steve. "If a Business Pays for Tuition, Can It Be Tax-Deductible?". Houston Chronicle. Retrieved 4 July 2021.
  14. ↑ "Designing and Managing Educational Assistance Programs". shrm.org. Society for Human Resource Management. Retrieved 3 July 2021.
  15. ↑ "Amazon's Career Choice Gets Mixed Reviews". Association for Talent Development . Retrieved 8 July 2021.
  16. ↑ Gallo, Sarah. "Case Study: Amazon Career Choice Makes Learning Accessible". trainingindustry.com. Training Industry Inc. Retrieved 8 July 2021.
  17. ↑ "The top 50 most popular schools for Tuition Assistance". Military Times. Retrieved 27 June 2021.
  18. ↑ "Education and Training". benefits.va.gov. Department of Veterans Affairs. Retrieved 20 September 2021.
  19. ↑ St. Amour, Madeline. "Boosting Retention at FedEx". insidehighered.com. Inside Higher Education. Retrieved 4 August 2021.
  20. ↑ Zarling, Patti. "Will Kroger's tuition assistance program attract and retain workers?". grocerydive.com. Grocery Dive. Retrieved 3 July 2021.
  21. ↑ Maze, Jonathan. "MCDONALD'S FRANCHISEES 'BLINDSIDED' BY NEW CHARGES FOR 2021". restaurantbusinessonline.com. Restaurant Business. Retrieved 3 July 2021.
  22. ↑ "Affordable Paths to College". archwaystoopportunity.com. McDonalds. Retrieved 8 July 2021.
  23. ↑ Koenig, Rebecca. "5 Years Since Starbucks Offered to Help Baristas Attend College, How Many Have Graduated?". edsurge.com. Ed Surge. Retrieved 8 July 2021.
  24. ↑ Tyko, Kelly. "Target joins Walmart in paying for college for employees; free books also included". USA Today. Retrieved 5 August 2021.
  25. ↑ Nguyen, Terry. "How free college became a perk for American workers". www.vox.com. Vox. Retrieved 15 September 2021.
  26. ↑ Blumenstyk, Goldie. "Counting on Employer-Paid Tuition Is Hardly a Safe Strategy Anymore. What Now?". www.chronicle.com. Chronicle of Higher Education. Retrieved 9 June 2021.
  27. ↑ LaRoche, Julia. "Walmart to pay for tuition and books for its employee debt-free college perk". Yahoo!. Retrieved 27 July 2021.
  28. ↑ Glover, Haley. "STUDY SHOWS THE BENEFITS OF WALMART EDUCATION EFFORT Retail Giant's Live Better U Program is Proving its Value" (PDF). www.luminafoundation.org. Lumina Foundation. Retrieved 15 September 2021.
  29. ↑ Shumway, Emilie. "Waste Management to offer no-cost education to employees' dependents". www.hrdive.com. HR Dive. Retrieved 11 August 2021.
  30. ↑ "BRIGHT HORIZONS EDASSIST SOLUTIONS®". Bright Horizons . Retrieved 8 July 2021.
  31. ↑ Peralta, Paola. "Education could be the key behind employee retention". benefitnews.com. Benefit News. Retrieved 8 July 2021.
  32. ↑ Geron, Tomio. "Jobless Workers Fuel Surge in Demand for Startups Offering Retraining". The Wall Street Journal . Retrieved 15 March 2021.
  33. ↑ Schwab, Kristin. "Employers' new strategy: Come for the work, stay for the college tuition". /www.marketplace.org. marketplace.org. Retrieved 15 September 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.