The 5 Keys to an Extremely Effective Employee Tuition Assistance Program (TAP) Part 2
4 - Maximize Every Dollar Spent on Your Tuition Assistance Program by Saving Tuition Dollars through Online Colleges and Universities.
According to the Society for Human Resource Management, in an article posted in HR Magazine, “online education meets employer’s needs in several ways, including increasing workforce knowledge, improving an organization’s hiring and retention efforts, and stretching education dollars through tuition discounts and customized programs that combine training with degree programs.”2
Furthermore, the business advantages of offering online education include:
- A more knowledgeable workforce. Online education appeals to employees who otherwise cannot pursue higher education because of time or geographic constraints.
- Increased hiring and retention. Employees are individuals. As such, they are interested in learning in more than one kind of way. Offering an online option allows those who prefer the self-paced nature of online education to know that everyone’s educational needs are being considered.
- Convenience. Online education offers schedule flexibility for the working adult. Also, in today’s workplace, many employees are mobile and virtual. Distance learning courses allow an employee to remain committed to their education efforts, no matter where they need to be for work.
- Cost Savings. Employers have the opportunity to work with online education providers to offer tuition rates to their employees at price points conducive to the pursuit of a college education and total reimbursement. In the last few years, there has been a revolution in online education, particularly when it comes to price and the unbundling of those basic college courses that act as prerequisites towards a major. For instance, at low cost, high quality online college course provider StraighterLine, students can take college course through their innovative $99/month subscription program.
When it comes to the cost of providing an employee education program through, it’s time to revise the way you think about expenses.
Let’s do the math:
This example assumes that each employee has to take at a very minimum 5 general education courses to advance towards an associates or bachelors degree. When you assume the average number of general education courses taken by an employee is 5 in a given employee benefit year, with an average of 3 credits per course, it follows that, for this example, the employer is providing tuition assistance reimbursement for 15 credits per year per employee.
Let’s make some more assumptions:
|Average Cost Per Credit Hour*|
*These credit hour costs assume a student takes, on average, 30 credit hours per year, or 15 credits per semester. The average cost of college (tuition and fees) per year based on school type was then divided by 30 (credit hours) to obtain the per credit hour cost. The current average cost of college (tuition and fees) was used in this formula: Public 2-Year College (in-state): $2,693, Public 4-Year College (in-state): $8,244, Private 4-year College: $28,500.3
Now what happens to costs per credit if you consider per credit cost at an online college course provider like StraighterLine (without any negotiated corporate-wide discounts)?
|Average Cost Per Credit Hour|
|$99 Subscription Program - StraighterLine||$46**|
|$999 Freshman Year of College - StraighterLine||$33***|
**Assumes 5 courses are completed within 5 months. $99/month subscription plan X 5 months + 5 (courses) X $49 (one-time course fees) = $740 total tuition costs for 5 college courses.
***Assumes $999/year. Complete 10 online college classes for 30 Credits.
2 HR Magazine, Online Degree Programs Offer Flexibility and Cost Advantages That Are becoming Increasingly Popular, 2006, p. 1
3 The College Board, College Costs: FAQs, 2012, p1.