The growing prominence of employer-backed college attendance speaks to a larger trend that sees more adults in the United States attending college later in their lives, said Nicole Smith, an economist with the Georgetown Center on Education and the Workforce. Rather than viewing education as a “pipeline,” Smith said the current education landscape is “more of an ecosystem, … perhaps a revolving door, because we have so many people who at their various points in their lives are required to go back to school.”
Already roughly one in five jobs requires a certificate on top of a bachelor’s degree, forcing current and aspiring workers to pursue additional educational training. But the financial strain workers might feel from keeping up with employer demands can be daunting, even when factoring the wage premium college educations can bring.
Smith said that whereas in the 1980s the ratio for financing a college education was 60 percent federal, 33 percent state, and 7 percent from families, today it’s much different. Families are now on the hook for half of all education expenses, while state spending has dropped to just 16 percent and federal to a third.
This jump in expenses incurred by families comes just as far greater numbers of Americans are heading to college and many of those students will need more than loans to fund their way to a degree. A forthcoming Center on Education and the Workforce report finds that one-third of all undergraduate students younger than 30 are working full-time; the same is true for 75 percent of undergraduate students older than 30.
“It’s no longer, ‘Okay, I graduated, I throw my mortarboard in the air and it’s done; I’m never going back,” Smith said.
Companies may have an incentive to help as well. Numerous employer surveys show bosses are unsatisfied with the skills their employees bring with them; partnering with colleges can be a way for companies to plug the holes in their workers’ professional skills.
Already companies spend more than $164 billion on employee training and education according to a recent employer survey—only about $15 billion less than what states and the federal government combined spend on higher education.
“Why is it that companies have to replicate dollar for dollar the entire U.S. spending on all postsecondary education,” began Karl McDonnell, the CEO of the for-profit Strayer University. “Seems like a huge opportunity cost to me.”
Strayer recently inked a deal with the United States division of Fiat Chrysler Automobiles to provide 118,000 employees of the car manufacturer’s 2,400 dealerships a full ride to attend Strayer’s degree programs. All employees who have been on the job for more than 30 days and are seeking an associate’s, bachelor’s, or master’s degree are eligible and receive the money for tuition, books, and fees upfront—unlike the Starbucks plan that reimburses workers, meaning virtually all its workers take out loans.