Tuition Assistance is the Latest Perk Companies Are Offering to Lure Workers

student burning the midnight oil after a long shift.
sturti / Getty Images

One of the recurring themes of the American economy this summer is the difficulty U.S. businesses have finding enough workers and the steps they have taken to attract applicants, ranging from higher pay and cash bonuses to programs that help employees complete their college educations.

See: The Most Unusual Scholarships and Education Grants To Help You Pay For School
Find: The First Jobs of Billionaires Like Warren Buffett and Jeff Bezos

This latest perk has gained momentum in recent months, with major corporations rolling out tuition assistance and similar programs to help them overcome labor challenges.

Amazon announced that it will reimburse up to 95% of tuition and fees for eligible employees, CNBC reported on Thursday. Starbucks, UPS, Home Depot, FedEx and Chipotle have similar programs to help workers pay for college. Waste Management has taken things a step further by not only paying for college degrees and professional certificates for employees but also offering the same benefit to their spouses and children.

And as previously reported on GOBankingRates, retail giants Target and Walmart both recently unveiled tuition reimbursement programs to help employees handle the cost of heading back to school.

One reason tuition assistance is so appealing to workers is that many had to delay their higher education plans during the pandemic, as many schools either suspended operations or drastically reduced the number of students they could serve. With the pandemic easing in recent months — at least until the Delta variant arrived — many students have decided to resume their educations.

Save for Your Future

Free or discounted higher education helps companies bolster their recruitment efforts while also improving the wellbeing and career prospects of their employees.

As CNBC noted, research shows there are substantial differences in lifetime earnings by education level. Men with bachelor’s degrees earn about $900,000 more over the course of a career than high school graduates. Women with bachelor’s degrees earn $630,000 more, according to the Social Security Administration.

Many companies are now extending educational benefits to front-line workers such as cashiers, drivers and hourly employees.

“It is an underrated benefit and probably underutilized benefit,” Willis Towers Watson senior director Lydia Jilek told CNBC, adding that educational benefits are a cost-effective way to find and keep workers. “If someone can get a bachelor’s degree for no cost, that is likely to increase their loyalty to their employer.”

There’s plenty of proof to support that claim. Chipotle chief financial officer Jack Hartung told CNBC in April that employees who take advantage of his company’s free degrees are 3½ times more likely to stick around and seven times more likely to advance into management positions.

See: Your Employer Can Pay $5,250 Annually Towards Your Student Loans Tax-Free Until 2025
Find: Student Loan Forgiveness Scams on the Rise — Avoid Being a Victim of Fraud

Save for Your Future

Meanwhile, modern technology makes it a lot easier to get a college education than it used to be.

With the increased opportunity for distance learning, people can enroll in a program online perhaps that they haven’t been able to do in the past,” Jilek said.

More From GOBankingRates

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte MagazineStreet & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, will be published in 2021 by Atmosphere Press.

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.