Higher ed is changing. Goldie Blumenstyk, a senior writer and Chronicle veteran, connects you with the people, trends, and ideas that are reshaping it. Delivered on Wednesdays.
From: Goldie Blumenstyk
Subject: Counting on Employer-Paid Tuition Is Hardly a Safe Strategy Anymore. What Now?
I’m Goldie Blumenstyk, a senior writer at The Chronicle of Higher Education, covering innovation in and around academe. Here’s what I’m thinking about this week.
The limits of employer-paid tuition come starkly into relief. What’s next?
The number of people newly unemployed in the United States in the past three weeks is 17 million — and still climbing.
That’s raising important questions about colleges’ and society’s reliance on employer-paid tuition programs as a way of serving working adults now that millions of them are suddenly cut off from their jobs. Losing an income and health-insurance benefits is certainly their more immediate worry, but the loss of a tuition benefit could derail many students’ educational plans.
The staggering levels of unemployment have also heightened the need for additional policies aimed at helping students pay for postsecondary education, especially those who were already in the work force. Some interesting ideas are already emerging on that front, including a proposal from leaders at the Markle Foundation calling for unemployment insurance to include benefits specifically for education and training.
I’m also hearing from college leaders who tell me that they expect far more people to be looking for shorter-term educational options if and when they decide to continue or start.
“People are going to be desperate to go back to work,” noted Paul LeBlanc, president of Southern New Hampshire University. And many of them, he said, “won’t have the luxury” of pursuing a four-year degree.
Southern New Hampshire, through its Workforce Partnerships division, has been a leader in developing shorter-duration programs and micro-credential options, though mostly in conjunction with employers. While the economy is in turmoil, some people might turn to higher education as a “refuge,” as LeBlanc put it, going for an advanced degree or to complete their undergraduate work. That’s usually what happens in a recession, and it could reverse a two-year slide in enrollments. But considering the financial precarity so many people now face, it’s hard to know if precedents will play out this time.
It’s head spinning to realize how quickly this whole conversation has changed.
A year ago, I was fresh off the spring conference circuit, where I heard a lot of happy talk about an emerging “new normal” in which employers would routinely be paying tuition benefits to middle-skills employees in jobs that didn’t require a bachelor’s degree. April 2019 is also when Arizona State University went public with its plans for a new for-profit spinoff called InStride that would help it and other major research universities pursue relationships with companies.
I had my doubts then about the reliability of this strategy (I was thinking risks of an inevitable recession, not a global pandemic), and I was certainly not the only one. Limited reach (think gig workers and many others who don’t have an employer that offers the benefit) is one problem. The fig leaf employer-paid tuition gives to political leaders to avoid supporting access to education by other means, including higher taxes on companies, is another.
But the tide continued to flow, as even gig-economy companies like Uber began offering tuition benefits, and small colleges like Cleary University, in Michigan, announced enrollment-boosting plans based on employer-paid models. A company called Guild Education, which pioneered the model of managing tuition benefits for companies like Walmart and Chipotle and guiding their employees to its educational partners, grew from 26 employees in 2016 to 500-plus today; as many as 400,000 students have enrolled or inquired about a program through Guild.
“I thought we were on the cusp of a movement,” Haley Glover, the strategy director at the Lumina Foundation, told me this week. She had hoped that offering tuition reimbursement as a benefit was becoming “table stakes” for employers, who saw it as a useful tool for improving retention and attracting talent, even as she, too, acknowledged these programs as imperfect solutions. Working students take a long time to get through college, Glover noted, but with the proliferation of tuition benefits, at least, “it was becoming a way for frontline folks to get their toehold in higher ed.”
Now, said Glover, who studies this trend, “I fully expect to see a gutting of these programs.” They’re some of the first to go in a downturn. They’re discretionary, and when companies run low on income, she noted, they cut back on such cash outlays.
I share that pessimism, even though at this point it’s hard to know what’s happening on the ground. This crisis hit midsemester, so the effects might not be seen for a few more months. And many companies have not been that forthcoming yet about the scope of current and planned layoffs. But even with the most optimistic hopes that this will be a short-lived, V-shaped recession, the economic outlook is pretty bleak.
Rachel Romer Carlson, chief executive and co-founder of Guild, told me that some of their corporate partners are trying to preserve the tuition benefit at least for their furloughed workers, even though it’s unclear whether the federal tax exemption on those payments will still apply. She also expects that for employees who are still eligible, shorter-term programs will be more in demand; several of Guild’s partners, including Bellevue and Brandman Universities, offer those options.
Arizona State, which made headlines for its partnerships with the likes of Starbucks and Uber, said Uber employees whose status with the company qualified them for the program will keep that status until the end of July and remain eligible for the tuition benefit through the end of October. Starbucks is still paying employees at stores that have closed, the university said, so they, too, remain eligible for the tuition benefit.
Some of the biggest employers offering tuition benefits are continuing to hire right now, including Amazon and Walmart. Interest in the tuition benefit at Walmart fell off in recent weeks, but Ellie Bertani, senior director of learning for Walmart USA, told me she “absolutely” thinks that’s just temporary, because so many people are working extra shifts and overtime, and because of the general anxiety about, well, everything. About 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit.
Bertani said she realizes some companies may have to cut tuition benefits, but contends that offering them “continues to make a lot of sense even in a distressed labor market” because employers benefit from having skilled employees, not to mention the savings from higher employee retention and reduced absenteeism. “If we can talk about that, and other companies can talk about that,” she said, it might help. Walmart is even planning to announce expansion of its program by early June, she said, with more options aimed at “growing areas of the economy.”
OK, sure. But if other companies have fewer employees than before, and millions more people don’t have any employer at all, what’s the solution for all those people?
The Markle proposal, calling for a government training allowance for people who lose their jobs, could help fill the gap. In fact, the foundation’s director of policy and national initiatives, Paige Shevlin, said the organization and some of the university and state-government groups in its Skillful coalition have asked Congress to consider the idea as part of its next stimulus package. “Just having unemployment insurance is not enough,” Shevlin told me.
I can also foresee a renewed push for expanding the use of Pell Grants, or other government funds, for more shorter-term options and other alternative-education programs not approved by traditional accreditors. So it was interesting to see a recent proposal from Michael Horn and Richard Price, of the Christensen Institute, urging colleges to more readily accept industry certifications for credit. Some institutions already do that (while also offering curricula that lead to such credentials), but this proposal calls for making that more systematic, Horn said, “as opposed to idiosyncratic.”
I get the intention here, but I’ll bet the same obstacles that now make it hard for students to transfer credits from one institution to another — mainly concerns about quality — will come into play when talking about industry credentials. Horn himself admits he’s got no firm plan, as he said, “to crack that nut.”
I hope someone does. Like it or not, the aftereffects of the Covid-19 pandemic will bring more choices and confusion to the postsecondary landscape. Higher ed has always needed more flexible approaches to credit transfer, more help for students to pay tuition, stronger measures of quality, and clearer pathways. This crisis makes those needs all the greater.
Civilian institutions will provide most of the programs for the new U.S. Naval Community College.
Plans for this new community college are progressing. (Yes, some non-Covid-19 news!) Within the next few weeks, the Navy plans to seek proposals from colleges that would offer the first set of online courses to an initial test group of up to 600 service members from the Navy, Marines, and Coast Guard, starting in January 2021.
John Kroger, chief learning officer for the Navy, told me he expects five to a dozen colleges to be selected in the first go-round, offering courses for associate degrees in cybersecurity, data analytics, and engineering. Eventually, he said, the Navy plans to expand the number of majors to about a dozen — all of them related to careers such as information warfare and intelligence — and enroll 30,000 to 40,000 service members a year.
Assuming Congress continues to appropriate the money, service members’ costs for the programs would be covered by the Navy, so the colleges chosen after the pilot will be assured a steady stream of enrollments. Enlisted personnel who don’t want to pursue the available fields could still choose other programs and apply their Tuition Assistance dollars elsewhere. Certain details, like whether the program will be limited to nonprofit colleges, would be made public once the request for proposals comes out, Kroger said, but only those with “proven track records” will be eligible.
The three branches of the military associated with the college need better-educated enlisted men and women, he said, but the Navy didn’t see the need to reinvent the wheel by creating its own educational operation. Civilian institutions will provide about 95 percent of the courses, he said. The Community College of the Air Force also relies on civilian institutions for some of its courses, but not to that extent. Kroger said he plans to apply a similar model for officer-level educational programs he’ll soon unveil as part of the Naval University System.
Kroger, a former president of Reed College and, as he put it, “a Marine long ago,” said he decided on working with civilian institutions after realizing that a lot of what the Navy and Marines needed “are the same things that a major Fortune 500 company would need,” such as employees proficient in communication, analytical skills, and quantitative reasoning. Earlier this month, the Navy named Randi Cosentino as president of the college. She’s been chief academic officer at Guild, which works closely with several Fortune 500 companies.
Some updates and final thoughts.
In last week’s newsletter I noted that college lobbyists were worried that federal relief would be held up because the data needed to distribute the money weren’t available. Well the Education Department figured out a way, using data from different years to patch the gap. My colleague, Dan Bauman, produced this sortable table that shows who’s getting how much.
Also last week, I took part in Bryan Alexander’s Future Trends Forum on how colleges are planning ahead, with Robin DeRosa of Plymouth State University and Neil Mosley of Cardiff University. Judging from Twitter responses, it seems my best advice was about college leaders needing to communicate frequently and honestly to all their constituents (though I used saltier language). You can catch our conversation here.
We’re now several weeks into our self-quarantines, and despite all the rhetoric from the White House, we’re probably not going anywhere quite so soon. So hope you’re all still staying safe, sane, and humane. And remember: #StayAtHome.
Got a tip you’d like to share or a question you’d like me to answer? Let me know, at firstname.lastname@example.org. If you have been forwarded this newsletter and would like to see past issues, or sign up to receive your own copy, you can do so here. If you want to follow me on Twitter, @GoldieStandard is my handle.