5 Interesting Things About Walmart’s New (Nearly) Free College Benefit

Walmart announced this week that it would offer associate and bachelor’s-degree programs in business and supply-chain management at three colleges to 1.4 million of its employees based in the United States. The employees’ cost: $1 a day.

Participants can choose from Bellevue University, in Nebraska; Brandman University, in California; and the University of Florida for their studies. Guild Education, a company that works with employers on tuition benefits and provides each enrolled student with a coach, will help manage the effort.

Here’s what’s significant about the deal.

1. Very low upfront cost for the students. Aside from the $1 a day, which students will probably pay in monthly increments, Walmart will cover expenses for tuition, books, and fees. That eliminates a cost barrier that often keeps lower-paid workers from enrolling in college. Walmart recently raised its minimum wage to $11 an hour.

Most employer-paid tuition programs reimburse students only after they’ve completed a course. Some also reimburse only those students who earn grades above a set minimum. Walmart is imposing neither a minimum grade nor a requirement that students repay the costs even if they leave the company. And they can qualify for the benefit after just 90 days on the job.

2. The effort will be independently evaluated. The Lumina Foundation, which has studied employers’ tuition-benefits programs on a smaller scale, will coordinate research on how the program benefits the company — using metrics like employee retention and performance — and its impact on the students — looking at measures like salary increases and promotions.

Walmart officials predict that about 68,000 students to enroll in the first five years of the program — a modest expectation, based on national estimates of the proportion of workers who typically use such benefits. Its potential size makes it appealing to study, says Jamie Merisotis, Lumina’s president, as does the chance to watch it from the get-go. “We can help them improve the program as it’s being built,” he said in an interview on Thursday.

Haley Glover, an expert on adult-student issues at Lumina, says Walmart’s interest in tracking students’ progress as part of its tuition-reimbursement program is unusual. “A lot of companies will provide the benefit and never keep track of who’s completing,” she says.

Lumina plans to hire analytics experts to conduct the study. Initial findings could come within a year and fuller results after two to three years. While the company will decide what information is released, Lumina officials say they expect the research that is published to be useful to other employers and colleges.

3. The college options are limited, but there could be an upside to that. Walmart considered about 300 colleges and brought in representatives of about a dozen of them for interviews at its headquarters, in Bentonville, Ark. The company said it was looking for institutions that together could provide affordability, two- and four-year degrees, and competency-based programs. It also wanted both open-access and competitive-admissions options.

Many other companies offer tuition benefits without limits on where the money can be used. Sometimes, though, in choosing a college, Glover says, “students can be swayed by an ad on television,” or by the recommendation of friends or family members, rather than give first priority to a college’s suitability for their situation.

Brandman and Bellevue are known for their focus on working, adult students. Brandman offers competency-based degrees. Florida, which recently rebooted the management of its online operations, has begun to emphasize interest in that adult-student population as well.

Bellevue and Brandman have also agreed to grant academic credit for career training that employees have received through the existing Walmart Academies program. That decision goes along with what industries are increasingly asking of universities.

The new deal marks the beginning of the end of Walmart’s 2010 arrangement with the for-profit American Public University system. Erica Jones, Walmart’s senior manager of communications, said that program, in which employees received a 15-percent discount off tuition, would be phased out over the next year.

Walmart did not immediately reply to questions about enrollment numbers and trends under that program, and officials at American Public could not be reached for comment. (Perhaps worth mentioning: in announcing its three new university partners, Walmart did note that they were all nonprofit.)

4. Students won’t have many degree choices. With just two programs on offer, this program far less flexible than some of the other tuition deals that other corporations have signed with colleges, and even more limited than the options that Walmart employees had under the arrangement with American Public University.

A Walmart spokeswoman said on Thursday that the two degrees “are just what we’re launching with.” She said the company would consider additional degrees that would be relevant to employees now and in their future careers.

Lumina’s Glover says that in picking a degree, “choice can also be an enemy” for a student who gets overwhelmed by too many options. “You can do a lot of things with a business degree,” she adds.

5. It’s a vote of confidence for the value of coaching, not to mention a big boost for Guild. Walmart’s decision to involve the three-year-old Guild Education means that each student will be assigned a coach from that company to help in applying for admission and then navigating the experience. Many of the most successful adult-student programs use coaching in some form.

Rachel Carlson, chief executive of Guild, says the company has been increasing its hiring, having recently signed deals with Lowe’s and Lyft, among other clients. She won’t disclose the number of students now using Guild’s services, but clearly, for the three colleges and for Guild, the Walmart deal is likely to shake things up considerably.

Correction (06/01/2018, 11:00 a.m.): The University of Florida is not among the colleges offering academic credit through the Walmart Academies program. The text has been updated accordingly.

Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.