Timmons, who has been working at a McDonald’s in the village of Wappingers Falls, New York, since she was 14, is finishing her last year of nursing school at Adelphi University and plans to embark on her new career after graduation. For Timmons, the first in her family to go to college, paying for her education would have been much harder without her employer covering about $10,000 of the bill. By working as a crew trainer part-time at McDonald’s on weekends, she was able to take advantage of the Archways to Opportunity program, a benefit for employees that covers up to $2,500 of tuition assistance each year. “I stayed so I could receive that scholarship,” she said. “It would have definitely been more difficult to pay off my loans without it. … It took a nice chunk out of that total at the end.” Long a benefit enjoyed by full-time workers at large companies, tuition reimbursement is a perk that’s finding its way into more and more part-time and hourly-wage retail and food service jobs, though the level of reimbursement, and how flexible it is, varies among companies. Last month, retail giant Target announced it would offer full tuition reimbursement for its workers to take certain courses at 40 or more partner institutions if they study business management, data analytics, or related topics. Target will also cover up to $5,250 a year for undergraduate studies and up to $10,000 a year for grad students. ($5,250 is a magic number for student aid, since it’s the amount of money that employers can provide a year without it being taxed as income.) In July, Walmart announced it was expanding its own 100% tuition-reimbursement program, removing the $1-a-day fee to participate in its Live Better U program, which covers courses at the University of Arizona, the University of Florida, and other educational institutions. And, since 2014, Starbucks has offered an education program for its employees that allows them to earn online bachelor’s degrees at Arizona State University. The company upgraded the program in 2021 to pay tuition up front instead of reimbursing it. Some programs are bound to be better than others from the student’s point of view, said student financial aid expert Mark Kantrowitz.“These can be great ways of getting an associate degree or even a bachelor’s degree,” Kantrowitz said. However, “you’re not going to get them to pay for an Ivy League education.”
Employers Benefit, Too
Employers are jumping on the trend because it’s an attractive perk that doesn’t cost as much as it might seem at first glance, Kantrowitz said.“They’re usually just a few thousand dollars, and they aren’t really aimed at having massive numbers of employees get degrees,” he said. “It helps them with employee retention, and if the employee does get a degree it makes them a better employee if they stay.” It’s also one more way for companies to attract workers—something that’s been difficult lately. Data from the U.S. Bureau of Labor Statistics released Wednesday shows that in July, employers were looking to fill a record 10.9 million job openings, with retailers and restaurants having an especially hard time of it. Another thing that makes the fringe benefit attractive to employers: relatively few workers participate in them. Of 1.5 million Walmart employees, 26,116 (about 1.7%) were enrolled in Live Better U as of July. Starbucks reported a higher rate: of 228,000 people employed by Starbucks in the U.S.,19,000, or 8.3%, are currently participating in its program, a Starbucks spokesperson said.
Wide Variation Among Programs
Managing the demands of college with even a part-time work schedule can be challenging. While Timmons said the location where she works has been flexible about her work hours, that’s not true for everyone. Conflicts between work and school are one of the top reasons students drop out of four-year colleges, Kantrowitz said. According to his own analysis of government data, only 39% of students who work 40 hours a week or more graduate within six years, compared with 89% of those who work only one to 12 hours. Interestingly, that disparity doesn’t exist for community college students, Kantrowitz said. To be sure, the wide variation among the programs means that they’re not a guaranteed way of escaping student debt. While the McDonald’s program allows students to use their scholarship money at a wide range of institutions, rather than only at partner schools, it doesn’t cover the entire cost of tuition. Timmons, for example, said she would likely have $50,000 to $100,000 in student loans by the time she graduates, and is hoping for potential loan forgiveness from the government to ease at least some of the burden. “I’m trying not to worry about it until I graduate,” Timmons said. “I’ve always wanted to achieve a dream, but it’s kind of a downer when you put a price tag on it.” Still, Timmons said, the aid put her dream much more within reach. “My parents don’t make the best money,” she said. “For me, it was either I find scholarships like the Archways program, or attend, like, a community college.” Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
