Participate in our Data and Recharge Card Giveaway

More companies will offer student aid and scholarships in 2022

Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi and Lowe’s have provided free college to more than 3 million US workers.

NEW YORK – When Daniella Malave started working for Chipotle at 17, her main search was for free food. As it turned out, she also received a free college education.

While working full-time for the chain, Malave completed a two-year community college with $5,250 annual scholarships from Chipotle. She then enrolled in the company’s free online college program, earning her a bachelor’s degree in business administration from Wilmington University in 2020.

“I didn’t have to pay anything for my education,” said Malave, 24, who now works as a recruitment consultant for Chipotle in New Jersey. “Every time I say it out loud, I’m like, ‘Is that real?’”

Chipotle is one of more than a dozen companies that have introduced free, or nearly free, college programs for their frontline workers over the past decade. Since 2021 alone, Walmart, Amazon, Target, Macy’s, Citi and Lowe’s have provided free college to more than 3 million US workers.

RELATED: Court temporarily blocks Biden’s student loan forgiveness

Companies see the programs as a way to recruit and retain workers in a tight labor market, or to train them for managerial positions. For hourly workers, the programs remove the financial hurdles of earning a degree.

Thousands of people are now taking advantage of it. Starbucks, which operates an online college program through Arizona State University, says 22,000 workers are currently enrolled in its program. Guild Education, which manages programs for Walmart, Hilton, Disney and others and offers online programs at more than 140 schools, said it worked with 130,000 students last year.

But some critics wonder if the programs mask deeper issues, such as pay so low workers can’t afford college without them or hours so erratic that it’s too difficult to go to school in person.

RELATED: ACT test scores fall to lowest in 30 years in pandemic slide

“I think they offer these programs to get around the problem of just paying people more, making them more secure and improving their quality of life,” said Stephanie Hall, senior fellow at The Century Foundation, a nonpartisan think tank.

Hall said a lack of data also makes it difficult to assess the programs’ effectiveness. Chipotle, Walmart, Amazon, and Starbucks, for example, don’t share graduation rates, in part because they’re difficult to calculate because students often take a semester off or take more than four years to graduate. Rachel Carlson, CEO of Guild Education, which also doesn’t disclose graduation rates, says the more relevant data is whether college classes help employees get promotions or raises.

Others question the quality of online programs and whether students’ degrees are marketable or help them pursue other careers, especially as many companies restrict study opportunities for employees. Discover, for example, only fully funds 18 bachelor’s degrees at eight universities through Guild.

“In my opinion, most of these programs have the hope that employees will stay with the company,” said Katharine Meyer, fellow of the governance studies program at the Brookings Institution’s Brown Center on Education Policy.

For its part, Amazon promotes college programs that offer opportunities outside of the company, such as B. Nursing. But Walmart reduced the number of programs it offered from 100 to 60 because it wanted to focus on skills that would align with careers at the company.

More than 89,000 workers have attended Walmart’s college program and more than 15,000 have graduated, said Lorraine Stomski, Walmart’s senior vice president of associate learning and leadership.

Tanner Humphreys is one of them. He started working at Walmart in 2016, hopping between hourly jobs while trying to fit his personal schedule into Idaho State University. But as part of the company’s online program, which it launched with Guild in 2018, he transferred his credits to Southern New Hampshire University and graduated in February with a bachelor’s degree in computer science. At 27, he now works as a clerk at Walmart’s headquarters for the cybersecurity team.

“I worked paycheck to paycheck and lived with a whole bunch of friends to pay my rent and stuff,” he said. “The move from hourly to salary is truly life-changing.”

Businesses that pay for college or graduate school are not new. For decades, however, the service was mainly offered to salaried professionals. In many cases, workers have had to pay thousands of dollars upfront for college tuition and have been reimbursed by their company.

Starbucks’ program, which started in 2014, was originally a tuition reimbursement program, but in 2021 it began covering tuition up front. Now 85% of the company’s stores have at least one employee in the program, which will be 10,000 in December. Graduates will celebrate.

Carlson said companies see an average return of $2 to $3 for every dollar they put into education because it saves on recruitment and retention costs. According to Walmart, participants are four times less likely to leave the company than non-participants and twice as likely to be promoted.

“If I know it’s going to cost me $7,000 if my cashier doesn’t show up tomorrow, I’d rather spend our average of our current partners — $3,000 to $5,000 — to pay for her college,” Carlson said.

Companies say the programs offer opportunities to minorities, too. Macy’s, which launched its program with Guild earlier this year, said half of the women who sign up are women of color.

Some companies, like Chipotle and JPMorgan Chase, offer online programs through Guild as well as grants that students can use for in-person learning at local institutions. Amazon’s college programs offer a mix of online and in-person learning at local community colleges or universities.

Hall said she would like to see more companies offering this type of flexibility, as online learning isn’t ideal for everyone.

Zachary Hecker, 26, a Starbucks employee in New Braunfels, Texas, began work on his bachelor’s degree in electrical engineering last summer as part of the company’s college program.

Hecker appreciates the free tuition, but often wishes he could attend classes in person or have more choices than the state of Arizona. His classes are challenging, he said, and professors aren’t always able to meet and offer advice.

But Carlson said online courses are ideal for the average guild participant, who is a 33-year-old woman with children. Carlson said students in his programs often don’t have consistent access to a car and need to be able to study at all times, like when the kids are in bed.

The chance to earn a free degree can be life-changing. Angela Batista was 16 and homeless when she started working for a Starbucks in New York.

“College was never in my dream,” said Batista, now 38. “I didn’t even have the audacity to fantasize about it.”

This December, she will graduate from Arizona State University with a degree in organizational leadership, funded by Starbucks. And now her son, who also works at Starbucks, is beginning work on his own degree. More companies will offer student aid and scholarships in 2022

Main Menu