US companies boosting their free college commitments

Free-college programmes run by major companies such as Amazon and Walmart are getting some key quality improvements, albeit with the longer-term trade-offs still unclear, an analysis has found.

The review by the Century Foundation, a progressive thinktank often sceptical of corporate education promises, marks the second independent assessment within five months to offer some positive views of the fast-growing workplace benefit.

The Century Foundation’s appraisal focused largely on Guild Education, a private company that has been chosen by an expanding list of major US corporations to manage their employee education benefit programmes.

A chief benefit of the emergence of Guild and similar intermediary partners, said Stephanie Hall, a senior fellow specialising in higher education policy at the Century Foundation, is that millions of US employees are getting streamlined systems for finding and paying for their college educations.

In many cases, Dr Hall said, the employers have begun paying the promised education benefits upfront, leaving the specialists such as Guild to guide employees through their choices and then handle other enrolment processes.

“Guild and at least one or two other companies that do this kind of work…have made it easier for these employees to access their benefits,” she said. “That’s great; that’s a positive addition to the scene.”

Chief drawbacks to the system, however, include the tendency of Guild to guide students towards online options, rather than a full range of college and university choices, Dr Hall said. Also, she said, much of the third-party system is not transparent to outside examination, raising concerns about possible conflicts of interest among companies such as Guild when it comes to offering the best available options to employee-students.

Corporate-funded higher education benefits have been spreading across the US, in a pandemic-transformed economy where many employers – especially in service industries – are struggling to find workers. The latest to join them just this week is Dollywood, the Tennessee theme park partly owned by entertainer Dolly Parton.

Guild acknowledged the online preference cited by the Century Foundation, agreeing that only 35 per cent of the programmes in its general course catalogue are available fully or partially in-person. But that also reflects employee choice, said Paul Freedman, president of the Learning Marketplace at Guild. He cited a survey of 868 prospective students in which 61 per cent said online learning was an important feature.

That reality, Dr Hall said, points to an even broader concern with employee educational benefits: the actual ability of hourly wage workers to afford traditional higher education options and fit their studies in their daily schedules, she said.

For people who are “spending 40 to 60 hours working and taking care of other people, there’s very little time left, even if it’s just online”, Dr Hall said.

Fitting higher education into a full-time job, Mr Freedman said, is clearly a challenge for many students who do not have the financial privilege of living on a campus for four years. The usual annual company contribution is $5,250 (£3,880) per worker, as that is the point at which education benefits in the US are legally subject to additional federal taxes, he said. Some companies allow a range of eligible fields of study and institutions, although the norm is to limit courses to those with direct applicability to the workplace, he said.

Guild, nevertheless, is determined to make the process as easy as possible for the workers, and growing numbers of companies and workers are joining in, Mr Freedman said. “There’s a war for talent” in many job sectors, and Guild appears to be the biggest such private coordinator of education benefits, having grown within six years to the point of serving nearly 5 million students at a time, he said.

Participating companies “find that people stay longer at their employer, are much more likely to be promoted to management, and much more likely to stay”, Mr Freedman said. “And that’s where employers are seeing their return on investment.”

paul.basken@timeshighereducation.com