Employers, including Starbucks and Chrysler, are reimbursing tuition and training costs for employees.
Large companies like the oil giant BP, accounting firm Deloitte, tech behemoth Google, and even food-maker Smuckers either provide discounts to select courses at eligible colleges or cover the full cost of tuition. An employer survey from 2013 found that 61 percent of companies make available some type of tuition-assistance program. Parcel firm UPS offers its employees a $15,000 tuition credit and has cut deals with regional colleges in Illinois and Kentucky to provide its workers free courses.
"It's no longer, 'OK, I graduated, I throw my mortarboard in the air and it's done; I'm never going back," Smith said.
Already companies spend more than $164 billion on employee training and education, according to a recent employer survey—only about $15 billion less than what states and the federal government combined spend on higher education.
Strayer recently inked a deal with the United States division of Fiat Chrysler Automobiles to provide 118,000 employees of the car manufacturer's 2,400 dealerships a full ride to attend Strayer's degree programs. All employees who have been on the job for more than 30 days and are seeking an associate's, bachelor's, or master's degree are eligible and receive the money for tuition, books, and fees up front—unlike the Starbucks plan that reimburses workers, meaning virtually all its workers take out loans.
Smaller companies may be unwilling to float the expenses of providing workers funds to attend college. With few exceptions, the federal tax code limits tuition-reimbursement incentives to slightly more than $5,200 a year before workers pay taxes on their benefits. That's a sum that may be enough for tuition at a community-college education, but not typically a four-year institution.