Are Your Tuition Reimbursement Policies Limiting Education Options?

Tuition Reimbursement Policies

Following the law of unintended consequences, tuition programs - innovative approaches designed to facilitate employees' education - are now themselves becoming barriers to innovative education formats. As a result of program rules, employers are increasingly missing out on great opportunities to use non-degree programs (certifications, MOOCs and boot camps, e.g.) to support their employees' education and development.

As we've discussed in these pages before, non-degree programs are proliferating, driven in part by the view that they can sometimes be quicker, cheaper, and more relevant in terms of career skills than traditional degree-based programs.

Given all of that, you'd think employers would be looking to use non-degree programs more heavily to support employee education. However in many organizations, tuition reimbursement rules specify "for credit" (in other words, degree-based) only, putting a brake on usage of non-degree programs.

Doing the Math on Adult Learner Options

Let's use an example to show how these rules effect employee behavior. Knowing that her company has several open positions in project management, Molly wants to improve her skills in this area. With a degree in business already, her options might include:

  • Project Management Specialization from Coursera. Cost $276. Time to complete: eight weeks
  • Project Management Boot Camp. Cost $2,000-3,000. Duration: five days full-time
  • Graduate Certificate in Project Management. Cost $7,000-$16,000. Time to complete: one to two years
  • Masters in Project Management. Time to complete: two years. Cost $19,000 - $50,000

Sorting Out the Tuition Reimbursement Choices

While there's clear value to a degree, it would benefit both Molly and her employer for her to consider all possible educational options equally. I recognize these programs will not all deliver the same depth of content. I'm simplifying to make a point: that the range of pricing and duration is striking, and that each is worth consideration.

But the fact is, in many organizations, Molly will likely consider one choice only and that would be option D, the one with the highest cost and the longest duration. Why? Because that is the only one that her employer's tuition assistance policy will pay for. She might consider paying for a different program herself, but besides the expense out of her own pocket there's also no guarantee that her employer will recognize its value.

She might also negotiate with her manager to try and secure funding from the line-of-business or training budget for one of the other programs. But that's often a challenge that many employees are unwilling to take on. So given the difficulty of any of those options, most employees default to the safety of the tuition program and the higher-cost degree.

The Impact of Millennials on Tuition Programs

Why does all this matter? If you're managing a large, robust tuition program, the cost and extra time for all those degrees add up. Equally important, the number of "Mollys" is only going to grow with demographic changes in the workplace. Research shows that younger employees are increasingly looking for professional development; they even prioritize it over regular pay raises.

More to the point, given the significant investment employers make in educational assistance, they should make every effort to ensure the dollars are being used as effectively as possible. This just isn't possible if non-degree programs are excluded from the picture.

I'll be looking more at options for managing non-degree programs next week. In the meantime, join the conversation by leaving a comment, reaching out to me directly, or by visiting EdAssist to contact us and learn more.

Written by: Alan Robins

About the Author

Alan Robins at Bright Horizons

As Director of Product Marketing, Alan drives original research and thought leadership for Bright Horizons education benefits programs, drawing on his extensive experience helping companies optimize education programs to support their Talent and HR objectives. Prior to Bright Horizons, Alan was at Gartner, a global leader in providing advisory services to technology and business executives, where he led new product teams in Europe and the US.