Turning milkshake servers into college grads: why Top Companies pay billions so employees can earn degrees

When Ashleigh Perea finished high school in 2014, she didn’t think college was in her future. Pressed for cash, she got a job serving burgers and shakes in her home town of Norman, Okla. When an angry customer threw a milkshake at her, it was time to move on.

For many frontline workers in similar situations, the chance to build a better life never arrives. As you can see from the graduation photo above, however, Perea today has a lot more to smile about.

Ten months ago, Perea earned a bachelor’s degree in business management and leadership from Nebraska’s Bellevue University. All costs for tuition and books were covered by her employer, Walmart. She’s working now as a claims analyst at Walmart headquarters in Bentonville, Ark. – and with a college degree in hand, she’s a candidate for several possible promotions. 

Holding down a full-time job while completing her online studies wasn’t easy, Perea says. But her advice to others: “If you want it bad enough, and are capable of putting in the time and effort, anything’s possible.” 

For ambitious workers like Perea, there’s never been a better time to win a helping hand from employers. The just-published 2022 edition of LinkedIn’s Top Companies list for the United States is packed full of companies -– ranging from Walmart (ranked No. 5) to Amazon (No. 1),  Disney (No. 16) and Ford Motor (No. 48) – where massive or total coverage of higher education costs is now a mainstream benefit. 

Early stirrings of tuition-support programs can be traced back many decades. But 1980s-era versions tended to be skimpy (with annual caps as low as $250), while putting a burden on students to pay all initial costs themselves. Reimbursement happened only after employees completed courses and earned solid grades.

It’s a different story today. Current programs typically provide substantial up-front coverage for everything from four-year college degrees to shorter certificate programs. The first $5,250 of support isn’t treated as a taxable benefit – and it’s common now for companies to negotiate bargain pricing with a core group of schools (often online). The result: all costs are covered within that tax-free limit, so employees don’t pay a penny.

At Amazon, extra education in areas such as logistics and information technology are popular, in part because those specialties can lead to fast-track careers. But the big internet retailer and cloud computing company also pays for extra education in fields such as nursing, which – at least right now – isn’t an Amazon line of business 

The idea, says Tammy Thieman, head of Amazon’s career choice program, is to support employees’ career prospects “both inside and outside of Amazon.” All told, the company plans to spend $1.2 billion by 2025, making free college (as well as shorter, credentials-based education) available to its 750,000 frontline U.S. workers. 

What’s in it for companies? At Walmart, Beth Williams-Moore, director of the retailer’s tuition-support program, says participating employees later earn promotions twice as often as those who don’t.

Worries that subsidized graduates might bolt for higher-paying jobs at a competitor turn out to be largely unfounded. According to Williams-Moore, retention rates for people completing Walmart’s Live Better U program are 20% higher than those for a peer group of employees that don’t seek out this benefit.

For employees, the payoff often comes quickly when pursuing fully paid-for training for specialized, in-demand roles. Just ask Jimmy Pino, a former Amazon warehouse worker in Hazelton, Pa. who’s now working toward an associate’s degree in computer networking.

Pino’s pay rate already has climbed to $25 an hour, from an earlier $18, on the strength of some short-course certifications he has earned in information technology. That’s allowed him to move out of his parents’ home and settle into his own one-bedroom chalet – with a loft upstairs where Pino, a one-time rock-band performer, can play his drums without disturbing the neighbors.

For companies with huge frontline workforces, you generally won’t see Ivy League options on their lists of fully subsidized education options. Instead, their lists emphasize business-related subjects, often taught online at schools focused on adult learners. 

Still, the variety of participating schools keeps widening. Disney attracted attention in March by adding North Carolina A&T, a historically Black university with strong tech-sector offerings. 

Meanwhile, a different class of tuition-support programs – tailor-made for highly skilled employees with big career ambitions – is running strong, too. Lydia Makohka, a vice president in Bank of America’s real-estate unit, already has earned an MBA with the bank’s support. Now she’s in the midst of adding a master’s in strategic leadership and executive management from Penn State.

Makokha’s program is mostly virtual. BofA’s maximum tuition subsidy of $7,500 a year covers the costs. That sum isn’t enough to cover every imaginable degree that employees might pursue, acknowledges BofA program manager Brandt Bennett. But BofA, like many employers, has outside education counselors on retainer to help advise employees on where they can find the best match between their career goals and available programs.

Surprisingly few employers publish or even track graduation rates. The rigors of pursuing a college-level degree while working full time mean that a sizable number of students start – but don’t finish – these programs.

Walmart’s Williams-Moore maintains that an unfinished education is still a lot better than nothing. “We try to decouple graduation from growth,” she says. “Even if you take one course, you have skills that you didn’t have before.”

Since 2018, Williams-Moore says, more than 75,000 Walmart associates have enrolled in Walmart’s tuition-support program. To date, more than 11,000 have completed their planned programs.

It can take six to eight years to earn a college degree while working full-time, Williams-Moore says. So she expects the percentage of graduates to rise as these early cohorts’ full cycles play out.

At Walmart, Alkali Sanneh is one employee just starting the college journey in hopes of accelerating his career. Sanneh, who grew up in Gambia, is studying cybersecurity and networking at Southern New Hampshire University, via its popular online programs. 

“I’ve always been fascinated by tech,” Sanneh says. He joined Walmart eight years ago as an electronics associate in a Tysons Corner, Va., store. Now he works as an intrusion analyst on Walmart’s cybersecurity team, and he’s aiming higher.

“A lot of chief technology officers at Walmart started as hourly workers,” Sanneh says. “They’re my role models. When you’re an immigrant, and you don’t come from a prominent family, programs like this give you a fighting chance.”