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Training & Development

Weighing the pros and cons of offering tuition assistance for your employees

Today’s working professionals are unlike those of years past. The influx of Millennial and Generation Z employees are driving a variety of new trends that are causing employers to rethink their priorities. There’s been a recent rise in “job-hopping,” for example. As a result, organizations are taking a different approach to topics like job satisfaction and benefits to better retain the professionals they hire.


Employers actually paid around $600 billion in turnover costs in 2018 — and it’s expected to increase to $680 billion in 2020. But organizations have opportunities to find a more sustainable path forward.


In fact, it's estimated 77 percent of turnover could be prevented by employers

One way many companies have responded is by offering tuition benefits programs, which either include tuition assistance or tuition reimbursement. Because one of the top reasons employees report leaving their jobs is a lack of career development opportunities, it’s unsurprising there’s been an uptick in these offerings from companies in a variety of industries. But offering tuition assistance is no easy decision, as employers must consider the cost — and the potential return on investment (ROI) — to determine if it’d be worth it in the end.


We analyzed a bevy of research on the topic and spoke with some seasoned human resources executives to hear their take on the true value of educational funding programs. Keep the following considerations in mind as you weigh the pros and cons of offering tuition assistance to your own employees.

Tuition assistance: Potential hurdles holding organizations back

A recent survey conducted by EdAssist found that nearly 60 percent of respondents say they’d choose a job with strong professional development opportunities over one with regular pay raises. This shift in employee attitude is a contributing factor in why tuition assistance programs have become increasingly common. Some companies even offer programs to pay tuition of their employees’ children and/or spouses.


But implementing a tuition assistance or reimbursement program takes more than ample planning. It’s a strategy that’s also laced with a number of sizable concerns for most companies, especially the high cost and the general worry that participating employees won’t stay with the organization long enough for the company to see any ROI.


Alex Fleetwood, manager of human resources programs and services at CHOC Children’s Hospital, has firsthand experience weighing these risks. She was instrumental in organizing CHOC’s own tuition reimbursement program. They’ve partnered with a number of different colleges, including University of Massachusetts Global.


“It costs a lot of money and requires a lot of faith, because you don’t always know if it will actually attract or retain staff,” Fleetwood explains. “But [that] often comes down to the culture of the organization.” The employer needs to truly value learning and continued education.


Mark Steiman, executive director of human resources for CHOC agrees. “We want our employees to continue to grow as individuals and leaders, no matter where they start,” he explains. “We want to offer the same opportunities to associates who start in our environmental or food services departments as we do for those starting in finance or clinical care.”


It can be difficult for organizations to overcome concerns about offering professional development programs like these. But Steiman maintains that decision-makers should consider the impact such a positive opportunity could have on the employees and the company alike. He explains further,


We trust and believe that if we take the first step to invest in our employees, they will reciprocate and invest in us.”

Tuition assistance: The benefits you can’t ignore

Second to cost is another concern many employers face when puzzling over whether to offer a tuition assistance or tuition reimbursement program: “How do we know it will actually have an impact on employee retention and hiring?” This is where the statistics surrounding those who’ve already tried it can come into play.


Consider, for example, the ROI companies have experienced by implementing educational assistance programs into their employee benefits offerings. When the restaurant chain Chipotle began its tuition assistance program, it very quickly saw the retention rate for participating employees skyrocket. In fact, retention reached 89 percent after just five months — nearly double the retention of employees who didn’t participate.


A separate EdAssist study surveyed more than 22,000 participants in tuition assistance programs, giving us the following findings:


  • 84 percent of respondents say access to a tuition assistance program was important in their decision to join their company.
  • 8 out of 10 respondents say that tuition assistance makes them more likely to stay with their employer, regardless of any policy requiring them to stay.
  • 85 percent of participants report that tuition assistance is an important factor related to job satisfaction.
  • 76 percent of respondents have participated in an educational assistance program for advancement or growth opportunities within their company.
  • 85 percent of participants maintain the program has made them a more effective employee.


The EdAssist report also found that nearly six in 10 employees were offered promotions, new opportunities within their organizations or other professional benefits within two years of completing their educational advancement programs.


When the benefits are tangible, they can have an impact on all parties involved. An analysis of the health insurer Cigna’s tuition reimbursement program, for example, found that for every $1 the company put into the program, $1.29 was saved in talent management costs. And an examination of Discover Financial Services’ program found that tuition assistance can increase a company’s ROI by 144 percent.


The executive team at CHOC is also looking for positive results in some less tangible areas. “We benefit from offering tuition reimbursement because we end up with more engaged individuals on our staff,” Steiman says.

When we create an opportunity for our associates to build an education for themselves, that comes back to us tenfold.

Fleetwood notes that CHOC expects to see more benefits than just increased employee productivity.  The hospital could also achieve a higher level of care.


“As a healthcare organization, it benefits our patients to ensure we have the brightest, most educated talent to achieve positive outcomes,” she explains.

Tuition assistance: Determining the specifics

If your organization decides to pursue a tuition benefits program offering for its employees, there will be a lot of details to iron out. Educational funding programs will vary depending on the company.


First and foremost, it’s helpful to understand the specific differences between tuition reimbursement and tuition assistance. Generally speaking, they both exist to achieve the same goal: to help employees fund the continuation of their education. The difference between the two is simply the method through which an employer offers that funding.


Tuition reimbursement is exactly what it sounds like – the student will pay for their tuition and the employer will offer a certain amount of reimbursement after the student has passed their courses. Tuition assistance generally implies that the employer will pay up-front for a portion of an employee’s education, assuming the employee meets the proper requirements.


For some programs, employees are only eligible after having worked at their organization for a certain number of years. Some companies only offer tuition assistance in certain fields of study or for full-time, salaried employees. It’s also true that some educational funding programs require participating employees to remain with the organization for a specified amount of time after they conclude their educational experience.


In addition to working through details and stipulations like these, employers will also need to decide whether they’ll want to offer general tuition assistance or if they’d prefer to partner with specific colleges when offering a reimbursement program. In CHOC’s case, executives determined the latter would be the most beneficial.

The key to partnering with specific colleges when offering a tuition reimbursement program is that we then have trusted partners like University of Massachusetts Global who we’re very proud to be working with.

Steiman says. “We like to highlight the value these schools can bring to our organization — there’s a certain credibility they can bring to the table.”


Steiman and his team have found that another distinct advantage to partnering with specific schools is that the lines of communication can remain open and fluid. When other opportunities for training or professional development efforts come up, the organization already has trusted partners to consult. If CHOC wanted to host a diversity and inclusion workshop for its employees, for example, the organization would look to its partner universities to see if they could assist.


Steiman also believes partnering with specific schools can benefit employees when it comes to mapping out the best paths to help them achieve their educational and professional goals. “Our associates love to see the one or two dozen universities they know they can trust because CHOC has vetted them and chosen to partner with them,” he explains.

Take the next step in offering tuition assistance to your employees

Weighing the pros and cons of offering an educational assistance program within your organization can be a lengthy process. But hopefully reviewing some of the multitude of promising statistics on the topic and hearing directly from HR executives regarding their own tuition assistance experiences has helped clarify a few things.


As you continue to mull over the details with your HR and executive teams, it will be helpful to arm yourself with as much supporting information as possible. Visit University of Massachusetts Global’s Partner Organizations page to learn more about industry-specific information that could be relevant to your organization.




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