Recession and Employee Benefits and Tuition reimbursement and Workplace Issues

Fewer firms reimbursing workers for tuition

November 21, 2009

The roughly 5,000 employees at the FedEx Express hub at Indianapolis International Airport can further their educations on the company’s dime, even if they’re just part-time.

The generous perk provides each worker $3,000 every calendar year to help pay for tuition. Overall, the local operation run by Memphis-based FedEx has doled out $99 million since 2001, including $10 million last year.

“One of the philosophical things about FedEx is, we understand that we need to invest in the continuous learning of our employees,” said spokeswoman Sally Davenport. “That helps us both in attracting and retaining an attractive work force.”

A caveat of the tuition-reimbursement program is that employees must take classes or pursue degrees that will have a “direct impact on their jobs.”

Still, as corporations continue to dig out from the worst recession in decades, tuition-reimbursement programs are a common casualty. A survey by the Virginia-based Society for Human Resource Management estimates that 63 percent of companies will offer undergraduate educational assistance this year compared to 67 percent in 2005.

In late September, for instance, Seattle-based Boeing Co. announced that it would end a program that lets any employee take any college class, for free.

“Employers are being more particular on what courses they will reimburse and are just funding courses that will help [workers] be more productive at their particular workplace,” said Carol D’Amico, president and CEO of Conexus Indiana, a statewide advanced manufacturing and logistics initiative.

D’Amico is a former executive at Ivy Tech Community College, where fall enrollment at its campuses statewide is at an all-time high of 110,000. That’s nearly 29-percent higher than it was last fall.

With mounting unemployment, the jobless are returning to school in droves. Even without tuition-reimbursement programs as an option, several alternatives exist to help adults fund the high cost of college.

Millions available from state

Perhaps unbeknownst to many, the state doles out hundreds of millions of dollars in grants to help students, including non-traditional types, pay for tuition.

“It’s a very, very robust program, and one of the most robust in the country,” said Claudia Braman, executive director of the State Student Assistance Commission of Indiana. “We’ve been a very, very generous state when it comes to financial aid.”

Formed in 1965, the commission releases state grant money that this school year totaled $250 million for full-time students and $5.2 million for part-time students.

The total represents nearly a 10-percent increase in the current two-year budget cycle, at a time when state revenue is shrinking. The increase underscores how important higher education is to the General Assembly and Gov. Mitch Daniels, Braman said.

This school year, however, individuals applying for the aid received less, because the pool of aid had to be spread across the deluge of students.

In fact, the commission received 300,000 applications from students seeking aid, a 21-percent jump from the previous year and much higher than the typical 4-percent increase.

Applications for student aid are due by March 10 every year, but students have until May to correct any mistakes on their forms, Braman said. The commission then distributes the funds to the schools once colleges and universities in the state set their tuition rates.

More money for the jobless

At Ivy Tech, roughly half the student population in the fall semester was at least 24 years old, an indication of more adults returning to school to further careers or pursue new ones.

The most common is the federal Pell Grant, which doesn’t have to be repaid. An option for a student who might want to earn money from an on-campus, part-time job is the Federal Work-Study program.

Most schools also offer scholarships, some based on financial need. Student loans are another popular option.

But, Becky Nickoli, Ivy Tech’s vice president of work force and economic development, cautioned, students would be wise to consult a counselor to assess their options.

“Students shouldn’t make their own assumptions about what they might be eligible for,” she said.•

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