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Guest Article

How To Keep Costs For Corporate Education In Line

Corporate America is spending about $11 billion a year on college education to ensure that their employees are acquiring needed skills and college degrees. And many corporations offer a competitive benefits packages that includes a Tuition Assistance Program (TAP), but as costs continue to rise each year, employers are concerned about the funds and how the money is spent.

The typical tuition reimbursement plan includes college courses applied toward an associate, undergraduate, and graduate degree, as well as certificate programs. Usually, companies pay 100% but some will pay 50% to 75%. Other companies designate the policy by the grades earned. The majority of Fortune 500 companies pay 100% for tuition and for books and fees.

One of the main problems with TAP is that employers do not keep track of their programs successes or failures, such as the number of employees utilizing these benefits, how they are using it, and the amount that are actually obtaining degrees. Employers need to know how the dollars are being spent. About 10% of a typical corporation's population are using this benefit. The first step is to get a good feel for what employees are spending on tuition reimbursement each year.


  1. Employees select schools and programs without guidance.

    While this policy allows maximum freedom, few employees have the knowledge or time to sift through the enormous variety of learning options available. Do not assume that all necessary advising will be supplied by the college.

  2. Tuition reimbursement is limited to a few large well-known traditional universities and colleges. The intense development and variety of new options in learning over the past twenty years has happened mainly outside the mainstream institutions, which continue to focus on the younger student.

  3. Reimburse for tuition only, not fees.

    Employees will oftentimes pick the college with a the single rate because, even though it may be higher priced, it is less money out of their pockets to cover the additional fees.

  4. Reimburse for traditional, classroom courses only. There are many legitimate and regionally accredited colleges that are offering courses through the Internet, computer and television and grant credit for tests, corporate training, military training, and other prior learning experiences.

  5. Provide no on-going support for employees' learning efforts. Few companies provide continuing support to those employees seeking higher education, but employee can be highly motivated by company recognition and acknowledgment.

Employers can manage TAP costs by making sure employees are spending the money wisely. Employers need to remember that colleges operate like businesses, and a college recruiter is likely to tell the employee why he or she should sign up for their particular program, even when it may not be the best choice. The employee needs to be given vital information about all educational alternatives. This can be done internally through education resource centers, which contains catalogues from every college in the area. An education specialist with a background in admissions is needed to properly advise employees.

Employees often do more research on buying a car than on "buying" their education. This could be due to having "free" money from the company, so they don't care whether they go to an expensive school or not. But that's not the answer for the employee, and it's not the answer for the corporation.


  1. Internet and Online Courses - Some people prefer to learn and earn credit on their own time and pace, wherever they live or travel. The use of Internet is expanding rapidly, as colleges create curriculums for this new technology, which allows students to take courses at a distance, enrolling by mail, phone or email. But, completing course work by such independent study requires motivation, self-discipline and good study skills, which may not be best for everyone..

  2. Television - Campuses offer complete degree programs or individual courses by using cable or public television stations. Some programs offer college courses viewed by taped classroom learning or interactive "live" classroom experiences. These options are useful for adult learners who travel or cannot attend traditional classroom schedules.

  3. Testing Programs - CLEP, the College Level Examination Program is a national series of examinations designed by the College Board to indicate college level learning in a wide range of subject areas. Almost 2/3 of all colleges and universities grant credit for satisfactory scores by CLEP, and these tests are inexpensive.

  4. Credit for Prior Training Experiences - If your employees make use of these options, the corporation will save the dollars they would have spent on tuition for equivalent course work. Many people may already own college credit and not know it.

  5. Portfolio of Prior Learning - In order for colleges and universities to grant credit for learning which occurred outside the classroom, students must demonstrate the level and extent of the learning. Usually, this is accomplished through the preparation and presentation of a formal portfolio, which can translate to 20+ credits.

Tuition assistance programs can be the black hole of company budgets. It is estimated that companies waste $6,000 per employee when poorly planned education programs are in place. Companies may be paying out millions of dollars and not question where it's going. Informing employees of their alternatives can help them cut off a year or two of school, and the company saves money, on the average, $2,000 per student.

Source: Dr. E. Faith Ivery is the President/Owner of Scottsdale-based Educational Advisory Services, Inc. (, the nation's only educational brokering firm, which consults with companies on ways to control the costs of tuition-reimbursement programs.
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