Program Aims to Help Reduce $20B Annual Tuition Assistance Spending

July 31, 2008

A new program designed to maximize the impact of one of the most costly employee benefit programs - the $20 billion a year invested in tuition assistance initiatives - will be launched this fall by the largest higher education educational consulting firm in the country.

"American companies are wasting tens of millions of dollars every year because more than 60 percent of employees fail to complete the programs they begin and take unnecessary courses," said Michael London, president of College Coach.

"Employees just do not receive the guidance and support they need in selecting and finishing the educational programs that best meets their needs, as well as their employers'."

London said the College Coach's new Tuition Advisory Services will provide corporations with educational advising, administrative support and negotiate reduced fees from some educational institutions.

College Coach, a division of Bright Horizons Inc., has been providing college counseling services to employees as a corporate benefit to more than 100 companies throughout the country since 1999.

London said the company will initially offer the tuition assistance program to current clients who are familiar with working with College Coach's team of more than 35 higher education counselors.

He said the program, which has been successfully tested with some current corporate clients, will include three major components:

Educational advising. Higher education counselors and experienced professionals in adult learning will provide individual counseling to employees and assist them in selecting the most appropriate school and program. Counselors will work with employees in considering programs that can be completed in the shortest amount of time and analyze their transcripts and background to determine if they can waive costly courses because of previous work, education or military experience.
Tuition assistance management. Improve efficiency and strategic planning through the administration of a company's tuition assistance program. The service includes reports on how much the company is paying to each educational institution, completion rates, student grades and return on investment data.
Educational discounts. Negotiate corporate rates from select educational institutions.

London said the new Tuition Advisory Services program was developed based on the needs expressed by senior human resource executives and research studies that indicated that many current programs were ineffective, wasteful and frustrating to employees and managers.

"The research shows that most companies neither have the time nor the expertise to support effective tuition assistance programs, despite the fact that employees view such programs as important in terms of recruitment and retention," he said.

London said the major challenges for companies in supporting strong tuition assistance programs include:

Complexity of options as the number of courses and degree granting programs have sharply increased through online courses and expanded offerings by colleges and universities.
A dropout rate of 60 percent, attributed primarily to the fact that employees receive little guidance in selecting the best program and virtually no support while enrolled in educational programs.
Employee frustration with the slow pace and confusion in obtaining program approval and reimbursements.
The time-consuming nature of administering the tuition assistance benefit, including providing advice to employees, analysis of the cost-effectiveness of the program, record keeping and reporting.

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