Employers have funds, workers need degrees. Why are dollars going unused?
College had always been a goal for Charletta Thomas.
Ms. Thomas didn鈥檛 doubt she was smart enough. Her barriers were external 鈥� tuition and time. She鈥檇 married not long after graduating from high school in 1981, had three children soon after that, and then had gone to work for McDonald鈥檚 to make ends meet after her marriage ended.
She started as a bookkeeper, and currently supervises training for a chain of 44 McDonald鈥檚 restaurants听in southern Louisiana. But after 27 years at a company with education benefits 鈥� benefits Ms. Thomas pitches to other employees 鈥� she still hadn鈥檛 taken advantage of them herself.
Why We Wrote This
While U.S. employers often tout benefits that promise to subsidize a college education, most workers can鈥檛 tap them. Listening to students 鈥� and tailoring options accordingly 鈥� could change that.
鈥淚 always wanted to go to college, but, like I say, life happened,鈥� she says. 鈥淚t had always been a life purpose to get that done.鈥�
It was peer pressure that made the difference. Her colleague Hillary Dixon, a kitchen supervisor then studying for her Master of Business Administration degree on McDonald鈥檚鈥� dime, wanted to know why Ms. Thomas wasn鈥檛 in college.
鈥淚 was preaching and talking about the program, but I was not in the program,鈥� Ms. Thomas says, laughing over the phone. She earned her bachelor鈥檚 degree in July 2019 through an online program; she is now on her way to an MBA.
Ms. Thomas is exceptional for many reasons, but for this one in particular: She鈥檚 a working American whose employer paid for her college.
Companies in the United States increasingly demand college degrees of their workers, yet few have actually paid for those degrees 鈥� even though they set aside billions of dollars each year to do so. Some employers, like the one Ms. Thomas works for, are finding ways to make tuition benefit programs work. And the pandemic has brought additional insights about how best to help employees. But with many Americans unable to access these benefits, lingering hurdles need to be addressed, labor and education experts say, before progress can be made and disparities resolved.
Most employer-based education benefit programs are a recruiting tool that may have less to do with delivering education and more to do with 鈥渢he optics around having a large, relatively underpaid frontline workforce,鈥� says Mary Alice McCarthy, director of the Center on Education & Labor at the think tank New America. 鈥淚t鈥檚 a way to show that you鈥檙e doing something for them, other than raising wages.鈥�
Usage rates for these benefits are 鈥渆xtremely low鈥� at companies that rely on low-wage workers, Ms. McCarthy says. For her, that lack of engagement raises a foundational question: 鈥淚s this really what these employees want?鈥�
Lots of money, little use
Funding cuts to public colleges have pushed costs onto students even as Americans鈥� real wages have been basically since the 1970s. Despite recent talk of debt relief and free college, little government help has been forthcoming, especially for working adults.
Without government investment, it might be impossible to line up the tuition help, career counseling, and subsidies needed to sustain a robust adult education program in the U.S., says Anthony Carnevale, director of Georgetown University鈥檚 Center on Education and the Workforce. 鈥淚n the United States, lifelong learning is a line in a speech; it鈥檚 not a line in the budget,鈥澨齢e says. 鈥淎dult education and training is not us.鈥�
With the government mostly out of the picture, employers set aside billions each year for tuition benefits programs, supposedly with the hope of building the skilled workforce they need.听
But nearly half that money sits unspent, according to research conducted by The Graduate! Network, a consultancy that surveys employers and employees about education programs. Surveys show many of the benefits don鈥檛 match working adults鈥� interests or meet their needs, and 鈥� crucially in a country where live paycheck to paycheck 鈥� most offer only to reimburse student workers for college expenses they鈥檝e already incurred.
While people over age 25 a quarter of all American college students and a slim majority of part-time students, only a tiny fraction of those 3.5 million students are using employer-provided education benefits. Estimates of how many eligible workers use those supports vary, ranging from roughly 1% to 10%, and participation has always skewed toward white-collar workers.
Boosters for employer-based college benefits note their value in recruiting and retaining employees. They鈥檙e also put forward as a powerful tool in correcting disparities that deny nearly half of Black Americans, half of Native Americans, and most Latinos postsecondary education. This is especially true since any amount of higher education makes people far more likely to a healthy life, a family-sustaining wage, and their communities by volunteering or engaging politically.
Reimburse or assist?
Pinpointing what employees want and need is complicated, and events of the past year have added more layers.听
Adult workers often can鈥檛 balance education with their family commitments. Without access to affordable child care, for instance, it is very difficult for most working parents to consider spending time on education. And many employer-sponsored programs require workers to front costs they can鈥檛 cover or direct them toward educational tracks that don鈥檛 credibly promise a pay bump.
Programs built with adult learners鈥� needs in mind have seen enrollment spike, even during the pandemic. Indeed, the pandemic may have shown that the previous low participation rates in employer-funded education had more to do with lack of time than with lack of desire.
Some large employers, like JetBlue, kept educational programs rolling even as their industries imploded. Idled workers enrolled in JetBlue Scholars, a streamlined bachelor鈥檚 and master鈥檚 degree program that includes credit for on-the-job training. In Las Vegas, casino workers flooded the Culinary Academy of Las Vegas, an employer-subsidized vocational school, after the Strip shut down. The forced expansion of remote learning jump-started new efforts at online higher education, viewed as a good fit for older students.
Historically, though, larger employers have typically spent only about half of what they鈥檝e set aside for tuition reimbursement, according听to听Dan Ash at The Graduate! Network.
And many employees have no access to such benefits. Only about 35% of customer-facing retail workers report being offered educational support听at all, Dr. Ash says. Often those come as promises that tuition payments will be reimbursed at the end of a semester or course, a nonstarter for many working adults.
鈥淚f I don鈥檛 have $600, you can offer me $1 million in reimbursement and I still can鈥檛 go to school,鈥� says Dr. Ash, an experimental psychologist who helped found Kentucky鈥檚 Metropolitan College, a workforce development institution partnered with听shipping service听UPS.听
Despite the shortcomings, reimbursement programs remain common, says Matthew Daniel of Guild Education, a benefits management firm working with employers, like Walmart, to vitalize their educational offerings. Mr. Daniel, a human resources researcher with Guild, describes the current programs as having 鈥渕illions upon millions鈥� of unused dollars, which has led Guild to recommend that its clients drop reimbursement and shift to tuition assistance, which relieves working students of most out-of-pocket costs.
Partnering with colleges
In January, the University of Virginia launched an adult education program, UVA Edge, offering a year鈥檚 instruction for $300,听when combined with employer benefits.听The yearlong, six-course program nets students about a semester and a half鈥檚 worth of transferable undergraduate credits.
The expansion came at a moment when an unprecedented number of Americans were thinking about their futures, says Alex Hernandez, dean of UVA鈥檚 School of Continuing and Professional Studies.听In the U.S.,听1 in 3 workers听听between February and late October 2020.听Many of those听听the 116 million American adults with a high school diploma but no college degree.听
鈥淎fter the initial shock, people really started thinking about their futures and their听careers and opportunity,鈥� Mr. Hernandez says. 鈥淧eople really thought about, 鈥楬ow am I setting myself up to thrive?鈥欌��
UVA Edge is small, little more than a pilot, with 40 students. But its launch also marks a recognition that universities must expand their reach.
鈥淎s a public university, success is not who we keep out of our classrooms,鈥� Mr. Hernandez says. 鈥淪uccess is what we do with people once they鈥檙e in our classrooms.鈥�
Changes like those recently made by UVA are needed to broaden who gets the chance to use employer-funded benefits, says Haley Glover of the Lumina Foundation, an Indianapolis-based group advocating for greater access to postsecondary education. (Lumina Foundation is one of the many funders of The Hechinger Report,听which the Monitor partnered with for this article.)
Until recently, educational benefits have largely been reserved for middle and upper management, Ms. Glover says. Whether the听newer听programs are reaching communities of color or the frontline, low-wage workers at whom they are aimed isn鈥檛 at all clear, she says.
鈥淚t鈥檚 those folks who need to be helped the most, and it鈥檚 also where the most opportunity for change lies,鈥� she adds.
Employers doing education right are paying for tuition upfront and offering guidance to would-be student workers while curating the list of colleges with which they partner, Ms. Glover says. They offer paths ending with anything from an associate degree to a master鈥檚, as well as professionally useful certifications. Their programs recognize on-the-job training with credit and can be short or, for students unable to take a heavy course load, long and flexible.
Concerns persist about the value and quality of the offerings geared toward working learners. For example, the parent company of Colorado Technical University, the McDonald鈥檚 partner institution that Ms. Dixon attended and Ms. Thomas currently attends, recently听听$494 million in student debt in a settlement with regulators, who contend the company鈥檚 vocational programs lacked proper accreditation.听
But not everyone feels that critiques of quality are valid.听Ms. McCarthy and others examining the criticism often find it rooted in an elitist view of higher education. Traditional bachelor鈥檚 degrees 鈥� or any degrees 鈥� are often overvalued, Ms. McCarthy says. Apprenticeships and skills-based training often better serve workers looking for economic security and respect.
Any push toward skills-oriented education runs into a political minefield that Congress has yet to clear, says Mr. Carnevale at Georgetown. Part of the concern, he says, is a return to educational 鈥渢racking鈥� that saw Black, Latino, and low-income students shunted into vocational programs that effectively denied them a chance at college. He agrees that tracking remains a problem but argues that a few months of training can also be exactly what a jobless worker needs to gain some economic security. He thinks the degrees-versus-training divide is also geographic.
鈥淚f you go South and West, there is a lot more support for training,鈥� he says. 鈥淭he closer you get to Harvard, the less support you get for training.鈥�
In Louisiana, a way forward
No bright line has been drawn听听college degrees and training in south Louisiana鈥檚 Acadiana region, where leaders aim to get 55% of adults in the nine-parish region around Lafayette a degree or professional certification by 2025.
The goal is extraordinarily ambitious 鈥� Louisiana ranks 48th in the nation when it comes to attainment of an associate degree or higher. In Acadiana, roughly 1 in 4 residents holds a degree,听听a recent report by One Acadiana, a business organization leading the educational initiative. But the need is also pressing; the time when a high school graduate could draw a good living out of the Gulf of Mexico鈥檚 oil fields is passing fast.
In Acadiana, a model for renewal through education has been set, perhaps unexpectedly, by McDonald鈥檚. Specifically, MacLaff Inc., the franchisee based in Lafayette that employs Ms. Thomas and Ms. Dixon, has gone all in.
While the education benefits from McDonald鈥檚 had long been widely advertised, they weren鈥檛 consequential. The $700 in tuition assistance for crew members didn鈥檛 go very far.听
That changed in 2018, when McDonald鈥檚 deepened and broadened the benefit, adding free counseling for employees and their families, high school and English instruction, and higher听benefits听of听up听to $2,500 a year for crew and $3,000 for managers. Now, the McDonald鈥檚 program offers a national model for companies hoping to spend more of the dollars they鈥檝e set aside for employee education benefits.
Chris Krampe, co-owner of MacLaff, says the franchisee鈥檚 leaders promote the McDonald鈥檚 benefits constantly and celebrate graduates, bringing them onstage at quarterly leadership meetings. The franchisee鈥檚 outreach to area community colleges netted workers an additional $500 a semester in financial help.
鈥淚t makes a difference,鈥� Mr. Krampe says. 鈥淚t gets down to that level of money that鈥檒l keep somebody from going to college.鈥�
Through the McDonald鈥檚 education benefits program,听MacLaff provided over $250,000 in 2020 alone and helped put 106 of its 3,300 employees in college.
Most MacLaff workers arrive at orientation with minimal education, Ms. Thomas says. She describes one crew member, a woman about her age, who had never been taught to read; Ms. Thomas guided her to a high school equivalency program, provided for free through the company.听She says听the public education system in the state hasn鈥檛 served her colleagues well and sees it as her task 鈥� and her company鈥檚 鈥� to compensate for that inadequacy.
鈥淭hese individuals may have come from dysfunction, may have come from a school with dysfunction, and they may have lost hope,鈥� she says. 鈥淲e build them up.鈥�
She describes herself as a 鈥渨alking billboard鈥� for higher education and takes pride in pushing her colleagues to bet on themselves.
At the end of new employee听orientation, she tells people, 鈥淚f I can do it at age 58, there鈥檚 no reason why anyone in this room can鈥檛 do the same or better.鈥�
This story about听听was produced by听, a nonprofit, independent news organization focused on inequality and innovation in education.听
Editor鈥檚 note: This听story has been updated to remove an incorrectly described statistic.
