Walmart, the largest private employer in the U.S., has announced a new benefit for employees that covers most of the costs of attending one of three nonprofit colleges, as long as they major in business or supply-chain management.
Employees pay $1 a day to participate, and the company covers “tuition, books and fees,” according to an explanation of the program on the retail giant’s website.
The move was the latest salvo in what is becoming an arms race by large retail chains to offer education benefits. In the past few years, Starbucks, Chipotle, Pizza Hut, and many other service-industry employers have started or expanded programs to offer free or greatly-discounted tuition to all of their employees, often delivered in an online format.
Sean Gallagher, founder and executive director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy, sees it as part of a “competition for talent” at a time of low unemployment. Employers like Walmart and Starbucks typically have high employee turnover, and they know that training new workers is expensive. So education benefits can provide an incentive for workers to stick around.
Since Walmart is limiting its program to majors that are related to business, it is a bit more “related to Walmart’s interests” than similar efforts by other companies, but Gallagher argues that the trend is largely positive.
The retail chain employs more than 1.4 million people, though only a tiny fraction are expected to participate. Gallagher says that past studies show that about five percent of employees take advantage of tuition benefits by companies. Of course, even that small fraction would mean 70,000 students.
Walmart was one of the first large companies to partner with higher education. Back in 2010, Walmart began a partnership with American Public University, a for-profit college, to give all Walmart employees a 15 percent discount on the college’s courses. The plan announced this week however is more comprehensive and involves different kinds of colleges.
Walmart is touting its new program as a “path to debt-free college,” and it involves an exclusive arrangement with three nonprofit colleges—University of Florida (specifically its UF Online), Brandman University (known for serving Hispanic students) and Bellevue University (which was early in offering online programs).
Walmart officials say they selected the colleges because of their track records serving working adults and their high graduation rates compared to similar programs by other institutions.
Gary Brahm, chancellor of Brandman University, which is based in California, said his institution went through a “very rigorous process” to be selected by the retail giant. “They spent a lot of time with me and my folks, and I went to Bentonville,” the Arkansas town where Walmart is headquartered.
Brandman will tailor some of its courses in logistics and business for the Walmart students. “The degrees will be contextualized,” Brahm says. The plan is for the university’s professors to work with Walmart leaders to help add scenarios and examples to the curriculum related to what Walmart does.
But could pleasing the college’s now biggest customer cause the college to lose its identity? Brahm says he isn’t worried about that: “Being contextualized does not mean it doesn’t meet the strict standards of any of our other programs.”
At University of Florida, though, Evangeline Cummings, the assistant provost and director of UF Online, said that Walmart is not getting any special treatment compared to the many other employers it works with who agree to pay tuition for their workers. And that includes admissions standards, she said. The college currently turns away about 60 percent of the people who apply to UF Online because they don’t meet the academic requirements. “We have no intention of changing our admissions standards, and they don’t want us to,” said Cummings.
“They actually were intentionally selecting multiple universities to give their employees multiple pathways,” the UF Online director said. “We hope to welcome as many students as we can from Walmart.”
Cummings said that its selectivity makes recruitment a challenge. In fact, UF Online went through a rocky start as it ramped up its operations. The institution missed its early admissions targets and ended up cutting ties with Pearson, which had been brought in to handle marketing and recruitment.
“I see the Pearson termination as when we kicked our training wheels off,” said Cummings. “The university had learned a lot and had evolved, and we were able to ramp up all of our services now in house.” The Walmart deal, she added, “enables us to reach a larger population of students who are going to have enormous employer support.”
Walmart is working with Guild Education, which helps employers administer education-benefit programs, to run its effort. Walmart employees who use the service will have access to coaches provided by Guild.
Rachel Carlson, CEO and co-founder of Guild, explained in an interview this week that Walmart employees in the program can use “enrollment coaches” to help them choose the right program, and “success coaches,” to help “manage their work as a working adult going back to school,” by giving advice on things like time management and picking classes. The students can reach the coaches by phone, video-chat sessions, or by text message. “We have a lot of students who text and email us on their bus ride on the way to work,” Carlson says.
Guild runs similar programs for other high-profile employers, including Chipotle. She said that the employers Guild works with are “two times more likely to retain” than other employees. She said the students also tend to have higher completion rates in college programs than those not supported by their employers.
Russ Poulin, director of policy and analysis for WCET, a nonprofit promoting e-learning programs, was eager to read the fine print, but said that in general companies expanding benefits is a “very positive thing.” And for highered leaders, he added, “I imagine a lot of institutions will be knocking on their door to get on their list” if Walmart expands the program in the future.
The future of Walmart’s arrangement with American Public University is unclear. Brian Muys, a spokesperson for the university, said his institution “will continue to be their exclusive university partner in providing credit for Associate training through June 2, 2019.”
