The bandwagon of companies offering employees free college just got a bit bigger.
Health insurance company Anthem on Tuesday announced that it will offer its 55,000 full and part-time workers free tuition towards an associate's or bachelor's degree through College for America at Southern New Hampshire University.
College for America is an accredited online degree program that touts its flexibility and affordability. Its degree programs cost $2,500 per year or less. Southern New Hampshire was the first institution to gain approval from the Department of Education for its so-called direct assessment academic programs, which measure student learning based on competency rather than credit hours. In 2013, when President Barack Obama launched his College Affordability Tour, he highlighted College for America's model, which rewards students for how well they master material, not by how much time they spend in class. "If you are learning the material faster, you can finish faster, which means you pay less," the president said.
Anthem's free tuition benefit through College for America, which launches on Tuesday, will be available to employees who work 20 or more hours per week and have been employed at the company for at least six months. Employees will have to front the cost of the courses and will later be reimbursed by the company.
In that regard, Anthem's program is similar to the one that Starbucks expanded in April. Starbucks employees can earn a college degree from Arizona State University at no cost through the company's reimbursement program.
Last month, the United States division of Fiat Chrysler Automobiles announced a free college tuition program for the 118,000 employees working at its Chrysler, Jeep, Dodge, Ram, and Fiat dealerships. Part-time and full-time employees who have worked at a dealership for 30 days are eligible to enroll in an associate's, bachelor’s, or master’s degree program in 40 degree categories at Strayer University, a 123-year-old for-profit college based in Virginia. FCA and its dealerships cover the cost of employees' courses upfront.
As the labor market has tightened in the past 12 months or so, more companies are interested in offering employees tuition assistance, said Mark Ward, vice president and general manager for EdAssist, a company that advises employers on their tuition assistance programs. The increased interest comes after a decline in such programs following the recession. A study of nearly 300 employers commissioned by EdAssist found that 71% of companies offered tuition benefits in 2012, down 16% from 2009.
Employers have begun to realize that the benefit is considered especially valuable by a growing segment of the workforce: millennials. An EdAssist survey of millennials released last month found that if asked to choose between similar jobs, nearly 60% of respondents would pick the job with strong potential for professional development over one with regular pay raises. One in two millennials said they expected an employer’s financial support in paying for further education.