Employer-Sponsored Tuition Aid Programs

​Patty Goodwin, Surveys

 

Are employers still offering tuition aid programs since the recession? According to MSEC’s Miscellaneous Benefits and Pay Practices Surveys there has been a 10 percent decrease in the number of employers offering tuition aid programs in 2011 from the 2003 survey.

 

In the chart below, the number of organizations who no longer offer tuition aid programs in 2009 and 2011 also includes those organizations that discontinued their program in the last two years. The percentage of organizations that discontinued their tuition aid program in 2009 was 6 percent and grew to 7 percent in 2011.

 

In recessionary times education benefits are often one of the first fringe benefits cut or reduced by employers. But why should employers offer tuition aid programs for their employees? A tuition aid program can help employers develop employee loyalty and longevity and be used as an employee retention tool. A tuition aid program may also assist with attracting and hiring quality employees.

 

What is included in tuition aid programs? An employer’s tuition aid program typically pays all or part of an employee’s costs for college-degreed courses, vocational classes, and job-related continuing education programs. Most programs cover tuition, books, and fees.

 

In 2011, 43 percent of all survey respondents required employees to have a minimum of one year of service to participate in their tuition aid program. Another 25 percent of respondents indicated employees could participate immediately in their program.

 

What is the annual dollar amount offered by employers in their tuition aid programs? According to results from the 2011 survey, 19 percent of organizations had no limit on the dollar amount given in one year. Another 22 percent of respondents indicated employees could receive up to the 2011 tax-free limit of $5,250. However, the majority of employers at 73 percent had a specific dollar amount/year associated with their tuition aid plans. The average annual dollar amount in 2011 was reported as $2,521.

 

Some additional features of tuition aid programs as reported in the 2011 Miscellaneous Benefits and Pay

 

Practices Survey:

 

• 84% of organizations reimburse the employee for tuition dollars at the completion of the course to the company’s satisfaction.

 

• 53% of organizations do not have a required time period the employee must remain with the company after completing coursework for which they received tuition aid, while another 30% of organizations required employees to stay at least one year.

 

• 47% of organizations reported part-time employees are not eligible for the tuition aid program

 

• 5% is the average percentage of employees who participate in tuition aid programs

 

• 61% of organizations encourage employees to participate in their program

 

MSEC will update the 2013 edition of the Miscellaneous Benefits and Pay Practices Survey in September.

 

We’ll have to wait to see if there is a change in employer-sponsored tuition aid programs when we finalize results in January 2014. Data reported in this article from the 2011 Miscellaneous Benefits and Pay Practices Survey contains all respondents from Arizona, Colorado, and Wyoming.