For anyone that attended a U.S. university in the past 20 years, it’s likely they earned a hefty chunk of debt along with their degree.
The Federal Reserve estimates that Americans owe $1.73 trillion in
Now, as employers struggle to remain competitive in a tough talent market, more and more are looking to attract workers with benefits that can make higher education more accessible and even eliminate student debt.
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Public benefit company InStride connects businesses with universities across the country to create flexible, debt-free education paths for employees. Inspired by Starbucks College Achievement Plan, which allowed Starbucks employees to get their bachelor’s degree for free at Arizona State University Online, InStride is on a mission to help other companies provide higher education to their workers through partnerships with credibly ranked institutions with a well of online programs. The program serves as an alternative to tuition reimbursements.
“America has been built on relationships between corporations and universities,” says Vivek Sharma, CEO of InStride. “But reimbursement is outsourced to third parties and not impactful. The learner in many cases has to front the cost, and what barista or a frontline worker has $10,000?”
InStride estimates that Corporate America spends $180 billion each year on tuition assistance and corporate-sponsored training programs. But these benefits do not allow the same flexibility, financial freedom and accessibility to employees. When InStride conducted a study with the global management consulting firm, Bain and Company, they found that less than 40% of employees were even aware that their company offered tuition reimbursement, while as little as 1% of employees utilized this benefit.
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Sharma insists the companies they work with guarantee employees will not have to spend any of their own money to receive an education. In turn, he explains that companies have a lot to gain in terms of bettering recruitment and retention rates, brand visibility, DEI initiatives and overall revenue growth. InStride claims that companies can achieve up to a 300% return on their education investments.
“If I invest in an employee’s education, she will believe in my company, she would treat the customers better and she would stay with us longer,” says Sharma. “This is a very real strategic benefit that changes the trajectory of an individual’s life.”
By providing employees with a debt-free college path, companies also position themselves as employers that take actionable steps to make a social impact — something that investors, employees and customers care about.
Technology research and consulting company, Gartner, reported that 85% of investors considered environmental, social and governance criteria when making investments in 2020. Ypulse, a research company focused on Gen Z and Millennial markets, found that 93% of those between 18 and 36 years old believe that if a brand supports a social cause, they must be taking action on behalf of said cause.
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And there are few social causes as universal in America as equitable access to higher education. Candice Smith, a relationship specialist at Desert Financial Credit Union, signed up for this benefit the same day it was made available to her.
“I always wanted to go back to school but didn't think I could,” says Smith. “I did not want to take out loans. I’m a banker so I see it on people's credit reports all the time, even 10 years later. My husband's still paying his community college loan off.”
As a mother and full-time employee at Desert Financial, Smith is only taking one or two classes at a time but is confident that receiving her undergraduate bachelor's degree in organizational leadership will be more than worth it.
“There have been some new positions opening up lately where I work, and I want to apply but a lot of the time there is a bachelor’s degree requirement,” she says. “ It’s frustrating if you haven't completed it yet.”
Sharma notes that companies can also change the lives of an employee’s family by not only giving an employee a better chance at career advancement and higher pay but by extending the benefit to an employee’s partner, child, sibling, or legal guardian.
“We know multiple Uber drivers who have passed along this education opportunity to their near and dear ones,” says Sharma. “It changes the life of the entire family because that's what education does.” The ASU Uber tuition award does cover any remaining tuition that comes with the completion of the Federal Student Aid application. This award can go to the employee or a direct family member.
Sharma predicts that benefits like this will become more commonplace for employers, comparing a free college education program to healthcare, which is now viewed as a standard benefit in many industries.
“Employers are going to get more loyalty from people and better the community,” Smith says. “By the time I'm done, I'm going to be more educated, more experienced and ready to advance into that next role. So I don't understand why companies didn't start offering this sooner.”
