It makes sense for companies to support  employees’ higher-education endeavors

It makes sense for companies to support employees’ higher-education endeavors

By David Rose, Vice President for Enrollment & Marketing, Indiana Wesleyan University

 

Working adults who choose to go back to school — whether they are earning their first degree or reaching for a master’s or doctorate — need all the support they can get.

Tuition assistance remains a popular employee benefit among many companies. It is estimated that 56 percent of companies offer undergraduate tuition assistance.

According to research done by the National Bureau for Economic Research, employer-sponsored tuition assistance usually covers about one-third of the cost of post-secondary tuition for working students. In addition, the same research showed that almost a third of undergraduate students working in fields like business or engineering reported receiving tuition assistance from their employers.

Choosing to go back to school is never an easy decision for a working adult who has many other responsibilities; therefore, tuition assistance remains a key component to helping working students afford higher education.

Often, adult students have reported that they started college as a traditional student right out of high school and then stopped because they couldn’t afford it, or a good job came along, or they started a family, or any combination of reasons. Many adult students have said they left the college path, telling themselves they would go back and finish later. But life has a way of complicating matters, and often those semester breaks turn into multi-year breaks from school.

By the time people are in their late 20s or 30s, most are settled down with family commitments and full-time jobs, and education takes a backseat because people can’t find the time — or the financial resources — to head back to school. They have a preconceived notion of what college is going to look like, and they know they can’t squeeze three, four or five classes into their already busy lives.

But many times, adults can move through an accelerated degree program, attending classes online or onsite. They complete their degree requirements in a much shorter timeframe, and find that they can fit a class or two into their busy schedules. Sometimes the solution is to take online courses — which have equivalent requirements of onsite courses yet are self-paced. Online students choose how to best fit the online courses and homework into their busy lives. Some working parents go online after their children go to bed, while others find it easy to do their own coursework while their school-age children are doing their homework.

Yet handling the financial component can still be a struggle for some people, and that’s where employers come into play. During the Great Recession, many companies cut back on employee benefits, and — unfortunately — tuition assistance was one of those benefits. But today, many companies are reversing that trend.

In addition to offering some sort of undergraduate tuition assistance, many companies also work with universities to offer tuition discounts to the company’s employees. Such discounts further reduce the overall investment by both the student and the company.

Companies that understand and embrace the long-term benefits of a higher educated workforce also are the ones that actively promote their tuition assistance program. They believe — and the data supports it — that tuition assistance leads to higher levels of employee retention, employee morale, creative problem solving, communication, team collaboration and overall work effectiveness.

According to a 2015 on educational assistance benefits conducted by the International Foundation of Employee Benefit Plans, companies reported that the top six reasons they offer tuition assistance is because it helps to:

  • Retain employees
  • Boost employee satisfaction
  • Keep employees up-to-date on evolving skills necessary in their line of work
  • Attract new employees
  • Inspire employee innovation
  • Increase employee productivity

Attracting new employees can be key to companies that are facing a graying workforce. Fortune magazine reported earlier this year that millennials, whose numbers are growing in the workforce, especially appreciate the tuition-assistance benefit. According to a survey of millennials, one in two millennials said they expected their employer to provide tuition assistance.

Many Indiana companies offer this benefit to their full-time employees, with some restrictions. Sometimes employers cap the tuition assistance benefit or they reimburse for tuition based on the grade the employee receives. In addition, companies might restrict their tuition assistance to certain degree and career paths.

Employers can see an immediate return on their investment. Working adults who go back to college report that they are able to take what they are learning in the classroom and immediately implement it at work. While students find this fulfilling, employees appreciate seeing practical applications in the workplace of the theory that is being taught in class.

Finally, employers can get tax breaks for offering tuition reimbursement. The IRS gives companies a tax deduction for tuition reimbursement up to a certain dollar amount per student.

The Employee Perspective

In Indiana, there are many options in higher education for working adults who are seeking to go back to school to earn a degree. Prospective students should first check to see whether their company offers tuition assistance and whether their employer has agreements in place with certain universities for tuition discounts. Armed with that information, they should closely examine program offerings as well as tuition cost and value-added services. Armed with that information, working adults will find that reaching that college goal is easier than they first thought.

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