Walmart’s Employees Can Earn a Degree for $1 a Day—Here’s Why It Makes Sense
August 9, 2018
College tuition costs have ballooned over the years in the U.S., with the average cost of private college tuition reaching almost $35,000 for the 2017-18 school year. But for Walmart employees, a college degree may now cost only $1 a day.
Announced in May, the new plan covers tuition, fees, and books for employees who’ve been with the company for at least 90 days. Employees qualify if they don’t have a college degree already and are asked to contribute $1 per day (or $365 per year), with Walmart covering the rest.
While Walmart’s plan has been making headlines, it’s far from the only one of its kind. Major companies from Starbucks to UPS to IBM offer plans to help workers pay for college or pay off their student loans—and while these benefits are certainly generous, they also provide plenty of benefits for the employers.
Research shows that education benefits can pay for themselves by reducing turnover and recruiting costs, and employees who take advantage are more likely to be promoted and grow with the company. Some of these companies also take advantage of partnerships with online colleges, and use these programs to fight against skills gaps. Of course, education benefits are also highly attractive to talent, especially those who are already dealing with significant student debt or hoping to learn new skills.
With that in mind, here are a few of the companies offering employee education benefits—and the advantages these plans can bring to everyone involved.
Walmart, Starbucks, and UPS offer degree benefits to solve skills gaps and help employees rise through the ranks
Walmart’s plan for paying its employees’ tuition includes an interesting wrinkle: employees must enroll in one of a few select schools and the benefit applies only to degrees in business and supply chain management.
Because of its design, the tuition contribution has the potential to benefit both Walmart and its employees—giving workers a chance to rise up in the ranks, while providing Walmart with a source of educated workers in specific areas where skills gaps are still an issue.
In some ways, Walmart’s program is similar to the tuition reimbursement plan at Starbucks, which covers employees’ four-year online degrees through a partnership with Arizona State University. Although Starbucks doesn’t have the same limitations on degree type, they’re also leveraging online programs to help existing, full-time employees gain new skills and eventually advance within the company.
And at UPS, the “Earn and Learn” program allows part-time package handlers to accrue over $5,000 a year towards the cost of college tuition—or up to $25,000 during their lifetime with the company. Their program is unique in that it applies specifically to part-time employees, and is designed to help handlers advance their careers to full-time positions that are higher up the corporate ladder.
Companies like IBM and Peloton help employees pay off their student loan debts to attract highly educated employees
With combined student loan debt reaching crisis levels in the U.S.—and now impacting about 70% of recent graduates with $1.4 trillion in total debt—it’s no wonder that some companies are attracting candidates by offering to pay back a portion of their student loans.
At Peloton, a fitness technology company, a partnership with student loan servicers helps the employer pay off $100 of each employee’s debt per month. Similar benefits are offered by major companies like IBM, Western Union, and Penguin Random House. These companies view the benefit as a win-win—allowing them to attract and retain more talent, while helping their employees get out of debt sooner so they can start making other moves in life, like buying a home or saving for retirement.
And while some career paths that require advanced degrees (like law or medicine) have operated on the assumption that students will take out considerable loans to be paid back after they secure a job, student loan benefits can allow companies in other industries to win over highly educated candidates.
"Peloton wants to be the employer of choice for talented and motivated people, and offering [a] student loan repayment benefit further strengthens our position as best-in-class,” says Amy Stoldt, Peloton’s vice president of people.
At LinkedIn and Certn, paid online courses and training offer opportunities for professional development
At some companies, offering education benefits doesn’t have to mean paying for employees’ college tuition. After all, college isn’t the only way to learn new skills.
At LinkedIn, employees benefit from access to LinkedIn Learning and Lynda.com, which was purchased by LinkedIn in 2015 and includes thousands of online courses in areas from software development to business to graphic design. And at Certn, a people screening service, employees are given funds to take online courses via Udemy and Coursera—even if the topic doesn’t directly relate to their existing role. While quite different from a traditional degree program, these benefits allow employees who already have an education to grow their skill sets during their free time, helping them advance in their careers—all at zero cost to themselves.
At a time when the majority of Americans report being disengaged at work, online programs for professional development can provide an opportunity for employees to take charge of their careers. And by subsidizing the cost of professional development and steering employees toward great resources, companies benefit from these programs, too.
Professional development doesn’t have to be a costly benefit. At some companies, this benefit can be as simple as providing a mentorship program, sending employees to local conferences (no flights or hotel rooms required), or pointing them in the direction of free and low-cost courses.
Final thoughts: educational benefits can boost retention, engagement, and company growth
Education benefits can take different forms—from directly paying for employees’ tuition at partner schools, as Walmart and Starbucks are doing, to helping them pay off their student loan debt. And there are less costly options, too, like providing professional development in the form of access to free online courses or mentorship.
But whatever form they may take, these benefits can improve retention and engagement, and boost company growth, while also helping to attract highly educated talent and recent grads who may be burdened with student loan debt. They might even pay for themselves in the long run—which means they’re worth considering for companies of any size.
*Photo from Walmart
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