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Tuition reimbursement programs are quickly becoming a sought-after benefit for employees.
Workers in many fields look for continuous education and allowing students to gain new skills can give companies a competitive edge.
These employee benefits can provide positive results for both workers and the companies that employ them.
Below are statistics and research to outline the effectiveness of tuition reimbursement programs
Education Benefits Popularity
- Worries over automation and student debt cause a huge demand for reimbursement programs, outranking paid/sick vacation leave, and retirement benefits. (Bright Horizons, 2019)
- 71% of U.S. organizations offer tuition assistance to their employees. (EdAssist, 2012)
- Company provided student loan repayment benefits have risen from 4% in 2018 to 8% in 2019. (SHRM, 2019)
- 87% of CEOs reported employee skill shortages, and the COVID-19 epidemic exacerbated the situation. Furthermore, small enterprises were more effective in upskilling and reskilling personnel because of their agility and willingness to try new techniques. (Mckinsey.com, 2020)
- 71% of participants evaluated tuition aid as one of the finest perks provided by their companies, after healthcare. (Businesswire.com, 2018)
- 42% of employers believe that education benefits are very or extremely important for their personnel. (SHMR, 2022)
- 48% of organizations offer undergraduate or graduate tuition assistance benefits. (SHMR, 2022)
- Regarding education benefits, employees are most interested in fully paid degrees (40%), tuition reimbursement (40%), and educational opportunities that work around their schedule (39%). (Bright Horizons, 2022)
- 74% of Millennials and 66% of Gen Zs would rather work for a company that offers student loan debt benefits and resources. (Bright Horizons, 2022)
- Half of Gen Zs and 45 % of Millennials see continuing their education as a career priority. (Bright Horizons, 2022)
- 60% of employees want additional guidance on how to continue their education and learning within their careers. (Bright Horizons, 2022)
- 80% of workers would be more loyal to an organization that invests in their education, and 79% would be more willing to stay in their current position for such an investment. (Bright Horizons, 2022)
- 79% would choose a job with an employer that invests in their continuing education. (Bright Horizons, 2022)
- 40% of employees expect their company to offer student loan reimbursement, 39% want to get an opportunity to go back to school for free, and 20% are interested in delayed student loan payment programs. (Bright Horizons, 2022)
- The average organization spends $1,280 per employee on formal learning. (PRWeb, 2023)
The Cost of Tuition Reimbursment
- Employers can offer employees $5,250 of educational assistance tax-free each year. (IRS, 2020)
- Employers spend $177 billion annually on formal education and training. (College Is Just the Beginning, 2015)
- A two-year study showed that education reimbursement programs have a 129% return on investment, which means for every dollar the company invests it generates an additional $1.29. (Lumina Foundation, 2015)
- Annually, the United States spends $1.1 trillion on formal and informal post-secondary workforce education and training. (College Is Just the Beginning, 2015)
- Employers spend 58% of their formal training budget on college-educated workers. (College Is Just the Beginning, 2015)
- Some programs pay employees a portion of their expenditures based on their grades. For example, an “A” may be eligible for 100% reimbursement; a “B” may be eligible for 85%, a “C” may be eligible for 75%, and so on. Alternatively, the employer may only pay 100% for classes with a passing grade. (Fool.com, 2020)
- 9% of the total learning expenditure went to tuition reimbursement. (PRWeb, 2023)
Tuition Reimbursement Programs Advantages
- Most respondents (82%) said the skills or degree earned through their employer’s tuition reimbursement program helped them be more effective employees, and 84% feel it helped them prepare for future work. (Bright Horizons, 2019)
- Tuition-assistance program participants reported 89% increased confidence in the ability to perform on the job, 94% reported that the knowledge was useful to their job. (Ed Assist, 2012)
- 76% of employees said they are more likely to stay with their employer because of its tuition reimbursement benefit. (Brighthorizons, 2019)
- ERP participants are 10% more likely to be promoted, 7.5% more likely to receive an internal transfer, and have an 8% higher retention rate. (Lumina Foundation, 2015)
- ERP participants are 43% more likely to be paid more. (Lumina Foundation, 2015)
- 88% of Gen Z workers say they are more likely to recommend their employer because of its educational benefits. (Brighthorizons, 2019)
- 84% of employees say that tuition support significantly influenced their choice to join their businesses. (Businesswire.com, 2018)
- Some firms are concerned that employees would utilize their tuition reimbursement to prepare for a different career and then depart. Despite this, 93% of employees said that tuition assistance helped them gain the required skills to advance in their present professions. (Businesswire.com, 2018)
Participation in Tuition Reimbursement Programs
- Less than 10% of workers at companies that offer tuition reimbursement use the benefit. (The Wall Street Journal, 2018)
- Large organizations on average provide more training than small and midsize organizations. (ATD, 2014)
- 76% of tuition reimbursement participants participated in a tuition assistance program for assistance or growth opportunities, and two–thirds participated in learning new skills. (EdAssist, 2018)
- In 2014, organizations spent 10% of their external services budget on tuition reimbursement, and 27% on consultants, workshops, and training services. (ATD, 2014)
- More than two–thirds of organizations’ formal learning hours involve an instructor, and 25% of the training hours used were completed through an online course. (ATD, 2014)
- By investing in a valuable tuition reimbursement program, Cigna generated above 100% ROI. Employees benefited from the initiative, as participants experienced a 43% increase in salary. (luminafoundation.org, 2021)
- Only around 25% of interested employees even begin an application to take advantage of a tuition reimbursement program. (InStride, 2021)
- Only 2% of workers with access to a tuition assistance program take part in it. (InStride, 2021)
Continuous learning is a benefit that helps employers retain their employees, and it also improves the work of employees. For a benefit that can help a company as much as it helps workers, employers can investigate which tuition reimbursement companies can help facilitate these programs.
Written by Shortlister editorial team
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