If College Doesn’t Matter, Why Do Businesses Foot The Bill?

Recent news articles in major publications this week reported that a significantly larger number of U.S. companies have begun providing their employees with free tuition so they can obtain a college degree while working.




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In reality this is not new. Companies like Starbucks and Walmart announced such policies within the last few years, and many other companies have had tuition reimbursement practices for decades. But the fact that the number of employers embracing such a practice is increasing significantly is news, given that companies like Disney, Discover, and Taco Bell have now begun this practice. In addition to tuition they also cover students’ fees, books and other college costs, and do so up front.

This puts to the test the notion of some that college no longer matters. The fact, borne out by the practice of many companies, is that college not only matters but connecting college to workplace skills in some cases may matter more.

Many labor economists, like Anthony Carnevale at Georgetown, highlight the fact that America is facing a skills crises. They point to the fact that of roughly 10 million new jobs being created over 95% of them require a post secondary degree. They also site the fact that jobs only requiring a high school diploma are in decline, with roughly 7 million of such low wage jobs having disappeared just in the last three years.

With employers at loggerheads about what to do, paying for college costs is one needed and necessary approach, and while it clearly has a cost,Disney for example is committing $50 million to their effort in 2019 alone, but if invested properly it can result in costs being offset and in some cases recovered by increasing employee productivity.

Education On The Back Burner

While in the midterm election just passed most of the focus in the political discussion was on health care and immigration, relegating education to the back burner, improving education touches every community, urban, rural and suburban. It must be a local, state and national priority. While businesses can and should address this by assuming employees’ tuition costs, what we really need is more forward-looking and collaborative public-private partnerships to address this issue in a more comprehensive and scalable way.

Making more students college and career ready and providing more support so more students get either a two year or four year degree must be a national priority. And there are ways to do this in a cost effective fashion. The PTECH program initiated by IBM which has spread across the nation and involves hundreds of other companies, is one necessary approach. It provides students with a combined grade 9 to 14 program where they obtain a two year degree and are first in line for jobs with participating employers who provide paid internships, mentors and other support.

PTECH’s college completion rates are 500% higher than the national average. While it has spread from one school to over 100 across 8 states, it needs to expand much further. But while necessary it too, is not sufficient.

Another needed approach to make more students college and career ready involves the Federal Work Study program.

Work Study Success

Over a half century ago, President Lyndon Johnson a range of federal education initiatives were enacted. One of them was the College Work Study program. It survives to this very day, though it’s badly in need of reinvention. It was intended to provide a federal subsidy to colleges so low income students could get paid work study assignments with federal grants paying 80% of a students wages while they work on campus, allowing them to earn funds to pay significant amount of their tuition costs.

While the funding has stayed stagnant for years, it still provides approximately a billion dollars and now covers 70% of students’ wages. And yet since the preponderance of these positions are minimum wage jobs on campus in school cafeterias and school libraries, the amount students earn hardly makes a dent in escalating tuition costs. Students earn on average less than $2,000 per year for their work, with much of the work totally disconnected from career preparation.

So here is the idea. First, open up college work study opportunities to a broader range of employers, with work taking place off campus with an incentive for employers to pay students higher wages. Second, drop the percentage of funding that is paid with federal funding from 70% to 50% or less, allowing the funding to reach more students. And third, link the work opportunities more directly to the skills linked to career opportunities. This will support more students, get the total earned by students to be significantly higher, make a bigger dent in the cost of tuition and, perhaps most important, allow work study jobs to be a real pathway to career opportunities.

Skills For Success

Putting in place a redesigned program that makes more sense and is linked to today’s needs, as opposed to yesterday’s, might even result in funding increases. That would serve even more students, and make college more affordable,  while addressing the needs that employers have for better skilled workers and offering students a real pathway to career opportunity.

In 2019 education and the nation’s skills crises must move from the back to the front burner.

Should we stop there? Hardly. Given how important education has always been to America’s future, we must come up with common sense solutions to the challenges facing our students, their teachers and administrators. Is this possible? Of course it is. At the end of the Second World War America began to make high school mandatory, while the passage of the GI Bill opened up college and made it free for veterans. Both actions stimulated economic growth

Employers need a skilled and educated workforce, students need the education and skills to compete for higher wage careers, and perhaps most important we all need a generation with the education to be effective voters and strong and responsible citizens.

  • Litow is a Professor and Innovator in Residence at Duke University. He is also a former deputy schools chancellor for New York City, a trustee of the State University of New York, president emeritus of the IBM Foundation, and the author of “The Challenge for Business and Society: From Risk to Reward.”

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The post If College Doesn’t Matter, Why Do Businesses Foot The Bill? appeared first on Investor’s Business Daily.

Source: Business Insider


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