Many employees desire to further their education but face challenges when it comes to finances. Taking a loan is among the available options, but most employees are afraid of accumulating debt. As such, many employers today provide tuition reimbursement to their workforce as an added perk.
Tuition reimbursement is a contract between a company and the employee in which the employer agrees to help employees further their education. Companies usually offer tuition assistance on top of the regular salary in addition to other benefits such as vacation days, health insurance, subsidized childcare center, or a 401(k) plan.
Why Employee Tuition Reimbursement Remains Critical
Tech Advancements
New technologies are disrupting all industries, and in the next few years, some job positions will become irrelevant. The Brookings Institute reveals that nearly 25% of US workers are likely to lose their jobs due to automation. Therefore, employees increasingly prefer companies with tuition reimbursement programs since that allows them to upskill and reskill.
Besides, employers also realize that offering tuition assistance to help upskill their workforce increases productivity and improves employee engagement.
Talent Acquisition
The hiring landscape is becoming highly competitive, and tuition reimbursement emerges as one of the most enticing benefits to modern-day candidates. Top candidates become pickier as there are more job opportunities for them.
Sometimes, a good salary may not be enough to convince them to join your company. Therefore, many companies use tuition reimbursement to improve their reputation and attract more attention from candidates.
The Future of Employee Tuition Reimbursement
If you want to introduce tuition reimbursement in your company or already have the program, it’s important to keep up with emerging trends in the sector. So, what’s next for tuition reimbursement programs in light of the new proposal by the Biden administration?
Review of the New Proposal
President Joe Biden’s administration is proposing to change the prospects for students through a tuition-free community college. This proposal includes several new financial benefits, including:
2-Years Free Community College
The plan seeks to invest $109 billion in community colleges to offer free tuition for two years. This will be open to any American regardless of their income.
Increase in Pell Grant
The proposal also seeks to help low-income students pay for their higher education by increasing Pell Grant. Therefore, you can expect low-income students to use the grant for child care and living expenses that could be a challenge to afford on top of the tuition fee.
More Funding to Minority-serving Institutions
The proposal seeks to subsidize tuition in minority-serving institutions such as Tribal colleges and Universities whose funding varies from other colleges. Students whose family’s annual earnings are below $125,000 will have a two-year discount at MSIs offering four-year programs at federal funding of $39 billion.
Additionally, the plan seeks to give a $5 billion grant to the institutions to expand educational programs in majors including nursing and computer science, which are in high demand.
Will Student Support Continue to Be Applicable?
Although it is still a proposal, you can expect some changes here and there on how employees fund their college education if this plan is implemented. However, the employer’s student support will still be applicable.
For instance, the proposal only seeks to cover tuition fees. This means that employees might not depend a lot on the employer’s tuition assistance. However, companies can consider reimbursing learning materials such as books to incentivize the desired programs.
Also, the new proposal only covers community colleges, and therefore, a significant portion of the workforce is likely to miss it. Companies will still need to offer student support to attract employees from this section to offset their student loans.
Companies offer tuition reimbursement for two major reasons. First, it ensures that you have a skilled workforce. When you promote talent from within, you’ll avoid time-consuming search and hire missions when new positions emerge. You’ll already have skilled employees to take up those roles.
Secondly, the tuition reimbursement acts as an incentive to motivate your existing employees and attract new talent. This program is a fantastic addition to the standard benefits packages that usually feature health insurance and vacation days.
Enhance Your Professional Presence!
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