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Smarter Tuition-Assistance Programs: Advice from Academe

By Jay A. Halfond, Dean of Boston University's Metropolitan College   11/12/2007
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Most employers support the higher education of their employees, and most colleges and universities rely heavily on these tuition dollars. Given this interdependence, it is remarkable how little direct dialogue occurs to ensure that corporate needs are being addressed and that companies are exposed to the full array of what their academic suppliers can provide.

It is also remarkable how little scrutiny employers apply to how their dollars are spent and what return they receive on their investment.

Employers may provide their workers with up to $5,250 a year in tax-free educational benefits, including assistance for graduate studies. Eduventures, an educational consulting firm, surveyed U.S. companies and found that 86 percent offer an employer-provided education benefit up to the tax-exempt limit annually per employee.

Corporate America spends about $10 billion annually for tuition reimbursement. On behalf of Academic America, I offer our thanks. Many academic programs would not exist without this corporate largesse. But some, I suspect, would not stand up well if HR benefits administrators better monitored their money. Some educational institutions are probably quite grateful that companies are so lax in tracking the use of their funds.

In surveys of part-time students at my school, about 85 percent receive support from their employers. I suspect this is common at most schools that serve working adults, and it accounts for dramatic changes that have occurred in the curriculum of higher education over the past few decades. So-called "non-traditional" students are now the majority, and business programs now attract the plurality of enrollments in American higher education. Inadvertently, corporate dollars have changed the academic landscape.

Corporations should spend even more on education, but use their corporate clout more effectively to ensure their funds produce tangible benefits. At the risk of sharing trade secrets, I offer my advice to companies from the academic vantage point.

Pointer #1:
Seek Out a Financial Quid Pro Quo

Few schools are willing to admit they discount tuition. However, through scholarships and other arrangements, many students are spared the sticker price of higher education. HR managers often underestimate the leverage they can derive from the number of employees they send to a particular institution.

But a volume discount is only part of this relationship, and companies should expect to give something in exchange for a price break. To extract a reduction in the tuition, consider giving particular schools access to your employees through e-mail blasts, recruiting sessions in the company cafeteria, on-site presentations and opportunities for schools to align their programs with employee performance goals. Universities can justify a tuition discount based on such opportunities to market their programs directly to company staff.

Pointer #2:
Don't Be Neutral

For some reason, most companies fear favoritism and pursue a nonpartisan, laissez-faire approach to the local menu of educational choices. Purchasing departments spend far more time determining which computers or chairs to buy than their HR managers spend studying how educational support should be allocated. Until the advent of distance learning, employees only had access to the institutions within their geographic area. But now the choices are far greateras is the range of quality.

Not all schools are the same, or equally worthy of corporate dollars. Not all schools provide comparable value to companies and their employees. There is nothing wrong with screening schools that want access to your employees, extracting some concessions and establishing a short list of preferred providers of higher education. These choices should be based on a reputation for quality and relevance as much as on cost and convenience.

Once a set of schools has been selected, you can work with those schools to provide on-site student advising, customized programs tailored to the needs of the company, guest lecturers from faculty on particular topics of concern and consulting help on corporate issues.

Pointer #3:
Considerbut Carefully CraftOn-site Programs

So often, companies invite universities to contemplate a full-blown, on-site degree program, only to realize the cost, commitment and challenge of attracting a full cohort of students. Developing a lockstep program can be far too rigidand difficult to create and sustain. An on-site program forces a cohort into a fixed one-size-fits-all schedule. In-house becomes in-bred. A campus experience allows students to meet others from a variety of industries and professions and learn from a comparative perspective.

While a complete customized degree program might be prohibitive and too insular, there are creative alternatives. Consider starting an on-site certificate program that leads to an on-campus degree program. Insist that in-house programs offer academic credit. That way, the certificate could be convenient for employees, customized for the needs of the employer but not too confining for those who want to pursue various options. At my college, for example, we offer four-course graduate certificate programs at company facilities that segue smoothly into multiple master's degree programs, both on the main campus and through distance learning. This provides the company with a realistic, focused on-site program, and flexible transfer options for employees.

Pointer #4:
Limit Employees' Out-of-Pocket Expenses

Most companies reimburse part or all of their employees' educational expenses three months after employees pay their tuition. This can be painful for those cashing their weekly paychecks. Many colleges are willing to invoice valued corporate customers directly rather than forcing employees into the middle of this financial transaction. This, in itself, can be a surprisingly strong incentive for employees to enroll in degree programs.

Many employers only pay for courses once students have received a particular grade, leading students to lobby for higher, undeserved grades. Grade inflation is another unintended consequence of corporate reimbursement policies.

Pointer #5:
Differentiate Between Individual and Company Needs

Generally, employees taking advantage of tuition-assistance programs are seeking degrees and diplomas, a broad educational experience and a chance to be in a setting outside their company. Those employees who might shun focused training programs flock to academic degree programs. In building a resume, they value the ongoing reputation of an academic program and institution. They want credentials that are enduring and portable, knowledge that will catapult them into future endeavors and achievements that can be recognized in all aspects of their lives.

Their company, on the other hand, might emphasize more finite, practical and parochial training. Acknowledging both sets of goals makes addressing each easier.

Academic credentials are no longer a luxury but a necessityand now more significant in their absence than presence. They provide more than just immediate, job-related skills but serve as a lasting and broadening part of one's identity.

Pointer #6:
Don't Overemphasize Business Management at the Expense of Arts and Sciences

Reward breadth . The love affair with management education needs to be tempered by the realization that liberal learning better provides communication and analytical skills and a historical, economic, political and scientific perspective far beyond the short shelf life of a business degree. Too many employees who realize the value of a graduate degree pursue both their bachelor's and master's degrees in business administration. There simply is not enough academic substance to justify this myopic focus.

The infatuation with business education, fueled by corporate dollars, has grown at the expense of the liberal arts. Ironically, most company executives studied the arts and sciences themselves, yet fail to stress that background to others.

Pointer #7:
Value Higher Learning

Become a learning organization. Academic institutions can provide personal growth for your employees, greater loyalty and retention, opportunities for social interaction and exchange of ideas beyond company walls, a way for bringing new ideas into the organization and, most importantly, a means for infusing energy and agility into the workplace. Tuition support should not be a blank check, but an investment in the professional growth of the workforce.

Corporate America actively supports Academic Americabut employers have surprisingly limited interaction with the educational institutions they help fund. Given the high demand among working adults for continual learning, this is an overlooked opportunity for greater dialogue, based on a more informed corporate community and a more responsive academic community.

Through its support, employers have transformed the academic environment: lifelong learning is now a given for a significant segment of the adult population. These mature learners challenge faculty to be better, more up-to-date teachers, and have redistributed enrollments toward particular subjects and learning formats, styles and schedules. Their presence has made academia better and, frankly, richer financially. Given this dramatic impact, it is surprising that employersand HR's tuition-assistance program managershave not sought more in return. Those of us worthy of your employees would welcome such a dialogue.

Jay A. Halfond is dean of Boston University's Metropolitan College, which develops innovative programs for nontraditional students at corporate and other institutional sites and through distance learning. He has published over 80 articles in a variety of journals and newspapers, and for five years contributed a monthly column, "On Ethics," for the Boston Business Journal.

Related SHRM Articles:

Direct Contracting: A New Approach to Education Benefits, SHRM Online Benefits, December 2014

Rejuvenating Tuition Reimbursement Programs, HR Magazine, June 2014

How's That Tuition Assistance Program Working for You?, SHRM Online Organizational and Employee Development, January 2012

Getting Value from Executive MBA Programs, HR Magazine, July 2007

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