While U.S. employers often tout benefits that promise to subsidize a college education, most workers can’t tap them. That may be changing
From The Hechinger Report
By Levi Pulkkinen
June 21, 2021
College had always been a goal for Charletta Thomas.
Thomas didn’t doubt she was smart enough. Her barriers were external — tuition and time. She’d married not long after graduating from high school in 1981, had three children soon after that, and then gone to work for McDonald’s to make ends meet after her marriage ended.
She had what it takes to rise. Thomas, now 58, started as a bookkeeper and now supervises training for a 44-restaurant chain in southern Louisiana. But after 27 years with a company with education benefits — benefits Thomas pitches to other employees — she still hadn’t taken advantage of them herself.
“I always wanted to go to college, but, like I say, life happened,” she said. “It had always been a life purpose, to get that done.”
It was peer pressure that made the difference. Thomas was wrapping up another spiel about the company’s benefits program when Hillary Dixon, a kitchen supervisor, called her out. Dixon, then studying for her Master of Business Administration degree on McDonald’s dime, wanted to know why Thomas wasn’t in college.
“I was preaching and talking about the program, but I was not in the program,” Thomas said, laughing over the phone. Thomas earned her bachelor’s degree in July 2019 though an online program; she is now on her way to an MBA.
Thomas is exceptional for many reasons, but for this one in particular: She’s a working American whose employer paid for her college.
Funding cuts to public colleges have pushed costs onto students even as Americans’ real wages have been basically stagnant since the 1970s. Despite recent talk of debt relief and free college, little government help has been forthcoming, especially for working adults.
With the government mostly out of the picture, employers set aside tens of billions each year for tuition benefits programs, supposedly with the hope of building the skilled workforce they need. 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’t match working adults’ interests or meet their needs, and — crucially in a country where most adults live paycheck to paycheck — most offer only to reimburse student-workers for college expenses they’ve already incurred.
Meanwhile, American employers are increasingly demanding college degrees of their workers, yet few have actually paid for those degrees. While people over 25 make up 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 percent to 10 percent, and participation has always skewed toward white-collar workers.
Boosters for employer-based college benefits often note their value in recruiting and retaining employees, even in high-turnover industries like retail sales. But they’re also put forward as a powerful tool in correcting disparities that deny nearly half of Black Americans, half of Native Americans and most Latinos a shot at postsecondary education, any amount of which makes people far more likely to live a healthy life, earn a family-sustaining wage and shape their communities by volunteering or engaging politically.
Most employer-based education benefit programs are something of an afterthought for companies, a recruiting tool that may have less to do with delivering education and more to do with “the optics around having a large, relatively underpaid frontline workforce,” said Mary Alice McCarthy, director of the Center on Education and Labor at the think tank New America.
It’s a way to show that “you’re doing something for them, other than raising wages,” she said.
Usage rates for these benefits are “extremely low” at companies that rely on low-wage workers who are unlikely to have any postsecondary education, McCarthy said. That lack of engagement raises a foundational question, she said — “Is this really what these employees want?”
The answer many have settled on is no, and yes.
No, because employees struggle to use the benefits as they are most commonly offered. Adult workers often can’t 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. Crucially, many programs require workers to front costs they can’t cover or direct them toward educational tracks that don’t credibly promise a pay bump.
But programs built with adult learners’ 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 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’s and master’s 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 students, like Thomas, who can’t drop everything for class.
Historically, though, larger employers have typically spent only about half of what they’ve set aside for tuition reimbursement, according to researchers Bridgett Strickler and Dan Ash. Strickler and Ash work for The Graduate! Network, which surveys employers and employees about education programs.*
“Those are education dollars in the community that are being left on the table,” said Strickler, a senior vice president with the network.
Only about 35 percent of customer-facing retail workers report being offered educational supports at all, Ash said. Often those come as promises that tuition payments will be reimbursed at the end of a semester or course. For workers who don’t have cash or credit, or who worry about debt, it’s a nonstarter.
“If I don’t have $600, you can offer me $1 million in reimbursement and I still can’t go to school,” said Ash, an experimental psychologist who helped found Kentucky’s Metropolitan College, a workforce development institution partnered with UPS.
Despite the glaring shortcomings, reimbursement programs remain common, said Matthew Daniel of Guild Education, a benefits management firm working with employers to vitalize their educational offerings. Daniel, a human resources researcher with Guild, describes the current programs as having “millions upon millions” 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.
“If you think about how this has historically been used for those who already have education, that is how we change the game,” said Daniel, noting that most of the students Guild works with are women and people of color, and that 74 percent have no prior degree.
Until recently, reimbursement was the system available to most University of Virginia employees. That changed in January, when the university launched an adult education program, UVA Edge, offering a year’s instruction for $300. The yearlong, six-course program nets students about a semester and a half’s worth of transferable undergraduate credits.
The expansion came at a moment when an unprecedented number of Americans were thinking about their futures, said Alex Hernandez, dean of UVA’s School of Continuing and Professional Studies. One in three workers had lost or changed jobs by late October. Many of those were among the 116 million American adults with a high school diploma but no college degree.
“After the initial shock, people really started thinking about their futures and the careers and opportunity,” Hernandez said. “People really thought about, ‘How am I setting myself up to thrive?’ ”
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.
“As a public university, success is not who we keep out of our classrooms,” Hernandez said. “Success is what we do with people once they’re in our classrooms.”
Changes like those recently made by UVA are needed to broaden who gets the chance to use employer-funded benefits, said Haley Glover of the Lumina Foundation, an Indianapolis-based group advocating for greater access to postsecondary education. (The Lumina Foundation is one of the many funders of The Hechinger Report.)
Until recently, educational benefits have largely been reserved for middle and upper management, Glover said. Whether the programs are reaching communities of color or the frontline, low-wage workers at whom they are aimed isn’t at all clear, she said.
“It’s those folks who need to be helped the most, and it’s also where the most opportunity for change lies,” Glover said.
Employers doing education right are paying for tuition up front and offering guidance to would-be student-workers while curating the list of colleges with which they partner, Glover said. They offer paths ending with anything from an associate degree to a master’s, 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 – the parent company of Colorado Technical University, the McDonald’s partner institution Dixon attended and Thomas attends, recently canceled $494 million in student debt in a settlement with regulators – though McCarthy and others examining the criticism often find it rooted in an elitist view of higher education. Traditional bachelor’s degrees — or any degrees — are often overvalued, McCarthy said. Apprenticeship 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, said Anthony P. Carnevale, director of Georgetown University’s Center for Education and the Workforce. Part of the concern, Carnevale said, is a return to educational “tracking” that saw Black, Latino and low-income students shunted into vocational programs that effectively denied them a chance at college. Carnevale agreed that tracking remains a problem, but argued that a few months of training can also be exactly what a jobless worker needs to gain some economic security. As he sees it, the degrees-versus-training divide is also geographic.
“If you go South and West, there is a lot more support for training,” he said. “The closer you get to Harvard, the less support you get for training.”
No bright line has been drawn between college degrees and training in South Louisiana’s Acadiana region, where leaders aim to get 55 percent of adults in the nine-parish region around Lafayette a degree or professional certification by 2025.
The goal is extraordinarily ambitious — Louisiana ranks 48th in the nation when it comes to attainment of an associate degree or higher. In Acadiana, roughly one in four residents holds a degree, according to 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’s oil fields is passing fast.
In Acadiana, a model for renewal through education has been set, perhaps unexpectedly, by McDonald’s. Specifically, MacLaff Inc., the franchisee based in Lafayette, Louisiana, that employs Thomas and Dixon, has gone all in.
While McDonald’s education benefits had long been widely advertised, they weren’t consequential. The $700 in tuition assistance for crew members didn’t go very far.
That changed in 2018, when McDonald’s deepened and broadened the benefit, adding free counseling for employees and their families, high school and English instruction, and boosting benefits to $2,500 a year for crew and $3,000 for managers. Now, the McDonald’s program offers a national model for companies hoping to spend more of the dollars they’ve set aside for employee education benefits.
Chris Krampe, co-owner of MacLaff, said the franchisee’s leaders promote the benefits constantly and celebrate graduates, bringing them onstage at quarterly leadership meetings. The franchisee’s outreach to area community colleges netted workers an additional $500 a semester in financial help.
“It makes a difference,” Krampe said. “It gets down to that level of money that’ll keep somebody from going to college.”
MacLaff provided over $250,000 in 2020 alone and helped put 106 of its 3,300 employees in college.
Having started with McDonald’s as a teenager, Dixon — Thomas’s heckler and educational inspiration — is now a management coach and trainer with MacLaff.
She’s also a booster for the benefits program, which can be a tough sell to workers who have never considered college.
“A lot of times, people don’t have faith,” Dixon said. “But if they start, they gain the faith.”
Most MacLaff workers arrive at orientation with minimal education, Thomas said. She described one crew member, a woman about her age, who had never been taught to read; Thomas guided her to a high school equivalency program, provided for free through the company program. Thomas feels the public education system in the state hasn’t served her colleagues well, and sees it as her task — and her company’s — to compensate for that inadequacy.
“These individuals may have come from dysfunction, may have come from a school with dysfunction, and they may have lost hope,” Thomas said. “We build them up.”
Thomas describes herself as a “walking billboard” for higher education and takes pride in pushing her colleagues to bet on themselves.
“My last line when at orientation, I say: ‘If I can do it at age 58, there’s no reason why anyone in this room can’t do the same or better,’ ” she said.
In order for that to be true for more workers, employers are going to have to accelerate the pace of change, said Shawn Hulsizer, a former executive with the Council for Adult and Experiential Learning, a 47-year-old organization advocating for adult learners. Doing so, she said, builds stronger businesses, healthier communities and a more equitable society.
“Supporting someone’s learning is good for the employer and good for the employee,” Hulsizer said. “Education should never be looked at as one-and-done. … That’s the world I’d like to see, where everyone gets to participate and no one gets left behind.”
But though there’s broad agreement on how employers can help realize this vision, experts say it currently remains unattainable for millions of Americans. Indeed, 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., Georgetown’s Carnevale said.
“In the United States, lifelong learning is a line in a speech, it’s not a line in the budget,” Carnevale said. “Adult education and training is not us.”
Photo: Naomi Vasquez and Morgan James, employees with MacLaff Inc., a company based in Lafayette, La., that owns and operates a group of McDonald’s restaurants, pose with associate degree diplomas awarded to them after completing a company-sponsored college program. MacLaff’s tuition assistance program has been put forward as a model in Lafayette as leaders there attempt to boost college attainment rates in the region. Credit: MacLaff Inc.
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