Tuition benefits go from nice perk to ‘strategic differentiator’
Tuition reimbursement has long been part of Houston-based Memorial Hermann Health System’s benefits package. Employees who want to return to school receive between $1,000 and $5,000 annually to pay for their education.
The hospital system supercharged the benefit in July, announcing it will cover the full cost of school for any employee who gets a degree in a “critically necessary” field at an accredited partner school.
If that seems generous, it’s actually less expensive than having people quit.
“When we lose employees, it’s a huge cost to replace them,” said John Eshleman, director of benefits at Memorial Hermann. “We’d rather invest that money to keep people. It’s our way of showing employees that we’re investing in them and want them to succeed.”
Education benefits such as tuition reimbursement are getting an upgrade. Now employers are shelling out the money upfront so employees never have to dip into their own bank accounts to pay for further education. Some are even paying off employees’ existing student loans. It’s the latest incentive employers are trying in the war to attract and retain talent.
EdAssist by Bright Horizons, a provider of employee-sponsored education benefits, saw a 33% increase in employers offering free schooling this year.
“When we started, tuition reimbursement was a ‘nice-to-have benefit.’ Now it’s a strategic differentiator among employers,” said Jill Buban, vp and general manager of EdAssist. “We’re trying to help our clients solve the workforce problems of now and the future.”
President Biden recently announced loan forgiveness of up to $10,000. And while that’s sure to make a dent, the average federal student loan debt balance in the U.S. is $37,667, according to the Education Data Initiative.
When Memorial Hermann launched its free degree benefit in July, 160 employees signed up in the first six weeks. The most popular degree: nursing. It’s a welcome sign, since nurses are in such short supply. Other much-needed professionals are imaging technicians and radiologists.
“We’re looking for new ways to find the talent in our own workforce,” Eshleman said. “We want these programs to help people come here but also help people stay here.”
Memorial Hermann also pays the existing student loans of its employees who have earned a degree in the last five years. They get $200 per month for a non-clinical degree and $400 for a clinical one, with a lifetime maximum of $20,000.
Perhaps the most significant part of the benefit: Employees are required to stay for two years after the benefit is deployed or they have to pay it back. As for the monthly loan repayment, if an employee leaves before the two-year commitment is up, they pay back a prorated amount.
Upping the ante
The financial services firm Citi has long had a tuition reimbursement program, but recently announced that employees in the U.S. can earn a degree or professional certificate through five partner schools for free. The schools all allow students to work at their own pace, virtually and include CSU Global, University of Maryland Global Campus, Walden University, Alamo, and Western Governors University. It’s an important factor since employers require people to remain on the job while getting educated.
Getting a four-year or graduate degree isn’t always necessary to climb the corporate ladder. In 2019, Bank of America expanded its education benefit to include professional certificates — an increasingly popular way for employees to learn a new skill without the time commitment that comes with a degree. To date, 700 different certificate programs have been approved, with most cybersecurity and certified financial planner being the most popular.
The benefit was enhanced in 2019 by offering pre-paid vouchers so employees don’t have to front the money for school, submit the bill and then get reimbursed, often months later.
“We’re trying to cut down on road blocks,” said Brandt Bennett, global human resources executive for Bank of America. “From a retention perspective, we want you to have a long, successful career here. We’re trying to create a pathway for you to do that.”
That’s exactly what Polyanna Unruh did. She started at Bank of America three years ago in a customer-facing role at a bank branch in Nevada. As she was perusing the benefits package of her new job, Unruh said the tuition benefit “caught her eye.” She hadn’t yet attended college and figured this was an opportunity to go without taking on a mountain of debt.
Unruh contacted the education specialists available through the benefits program to figure out which schools offered the best options. She needed to continue working while studying, so the ability to go at her own pace was important. She used Bank of America’s reimbursement benefit that offers $7,500 annually and completed her degree at Western Governors University in a year and half.
For her next degree, an MBA from the same school, Unruh opted for the pre-paid voucher so she didn’t have to dip into her own wallet. The dividends paid off: In May Unruh was hired onto the risk and compliance group as a quality analyst. Those are the people who listen in when customers call into a helpline to make sure the customer service representatives are doing their job appropriately.
“I’m 100% sure all of the schooling equipped me to take on this new position,” she told WorkLife. “When Bank of America stood behind me to give me those benefits, that just added to my gratitude. This is my place. I see coworkers who have been here for 30-plus years. That’s what I want too. I’m here to stay.”