Hitting the Books, Sticking Around
Companies are turning to college benefits as a recruitment and retention tool.
By Andrew R. McIlvaine
Tashima Parker-Langley says she's feeling a combination of anticipation and jitteriness about her upcoming college classes.
"I'm excited and nervous, going back to school at my age," says Parker-Langley, who is 41. "I'm happy I'll be with my co-workers rather than with18- and 19-year-old students."
She'll be attending classes with her co-workers because her employer, document-storage and information-management company EDM Americas, is launching an on-site associate's degree program in business administration at its Scranton, Pa., facility that will allow employees to take college courses taught by instructors from nearby Lackawanna College that are fully paid for by the company, with no obligation to repay the tuition should they decide to leave after obtaining their degrees.
"I've always wanted to go back to college but never had the means to do it, so when this opportunity came along I jumped at it," says Parker-Langley, a single parent who says that attending college outside of work hours would be difficult to manage.
The company decided to offer its on-site program to reduce employee turnover and attract a higher caliber of job applicants interested in furthering their education, says EDM Americas CEO Scott Byers.
"We stepped back and decided to do something different, to provide them with an upfront investment in their education and development, we'd have a better chance of retaining them and they'd have a path to stick with us," says Byers.
College -- attending it and paying for it -- is much on the minds of companies and their employees these days. The increasingly sophisticated nature of many jobs in all industries is making education more important than ever. A recent CareerBuilder survey finds that 41 percent of employers are sending current workers back to school to get advanced degrees, with 14 percent fully funding the degree and 22 percent funding it partially.
Some companies, such as EDM Americas, are offering on-site college courses in partnership with local schools, while others offer tuition reimbursement to students who successfully complete courses at nearby colleges or online. Other companies are luring new hires by offering student-loan repayment programs for recent college grads. Such programs, offered by just 4 percent of companies in 2015, could increase to 26 percent by next year, according to Willis Towers Watson's 2016 Voluntary Benefits and Services survey.
The average U.S. college student graduates owing more than $30,000 in student loans, according to a 2015 study by the Institute of College Access and Success. These high debt levels are extracting a mental and physical toll: A recent poll by American Student Assistance--a nonprofit organization that guarantees federal student loans--of 502 workers between 22 and 33 years old found that more than half said they worry either all the time or often about repaying their student debt. Meanwhile, 40 percent said worrying about their student loans has affected their health, and 55 percent said they'd like to go to graduate school but can't take on any additional student loans.
Total student debt in the U.S. now exceeds $1.4 trillion, according to the Federal Reserve Bank of New York.
A bipartisan group of lawmakers in Congress have introduced a bill, the Employer Participation in Student Loan Assistance Act (H.R. 795), that would make it easier for companies to offer their employees student-loan repayment benefits by allowing for a tax-free contribution of up to $5,250 per employee for student-loan repayment.
Some employers, including Philadelphia-based health insurer Independence Blue Cross, offer a benefit that's designed to make it easier for employees' children to attend college without incurring burdensome debt. Last year IBX began offering its 4,500 employees access to the SAGE Scholars Tuition Rewards Program, in which employees can have 5 percent of their 401(k) balances applied each year to a fund that will help pay for tuition for a named beneficiary at one of 350 participating private colleges.
If the named beneficiary elects not to attend one of the schools, the funds can be transferred to another beneficiary, says Jeannie Heffernan, IBX's chief human resources officer. Heffernan, who participated in the program, was able to set aside $19,000 for a nephew to attend one of the colleges.
"It's a great benefit," she says, adding that 1,500 employees have signed up so far.
IBX also offers a tuition assistance program that provides employees with up to $5,250 tuition reimbursement for an undergraduate or undergrad program annually.
Langley-Parkersays she hopes to further her education after obtaining her associate's degree by enrolling in a scholarship program at Lackawanna College that will be available to employees who complete the on-site program.
"I'm thankful this company is investing in its employees," says Parker-Langley, who plans to use her degree to move ahead at EDM.