How Discover Financial Revamped Its Tuition Reimbursement Program
In June 2018, Discover Financial Services announced an exciting new college tuition program that opens the door for any of our eligible employees to earn a fully-paid college degree. Known as The Discover College Commitment, the benefit covers tuition and required fees, books and supplies needed to complete select online degrees at one of three universities – the University of Florida (via UF Online), Wilmington University and Brandman University.
Delivered in partnership with Guild Education, a company specializing in tuition reimbursement programs, the benefit has no tenure requirement so Discover employees can start participating as soon as they want regardless of how long they have been with the company, including new employees on their first day.
This new program represents a significant commitment from Discover’s leadership, as well as a change in our overall thinking about how to provide tuition assistance in the most effective manner possible.
Historically, Discover provided a tuition reimbursement program that covered up to $5,250 for tuition towards an accredited bachelor’s degree program. While the previous Tuition Reimbursement Program provided crucial financial assistance to some of our most talented and ambitious employees, company participation was approximately 2.5%
We recognized, that the program could be more impactful to more of our employees. In particular, one area we wanted to improve was the fact our employees had to pay tuition up-front and then wait to get reimbursed; something many of our employees couldn’t afford to do.
In 2015, we started looking at a model that no longer required our employees to pay out of pocket costs for improving their education. We knew that this would expand the program’s reach, but also increase our costs – perhaps significantly.
To fully understand the financial impact the program, we undertook a comprehensive financial analysis of the costs and benefits of our Tuition Reimbursement program with the Lumina Foundation. Requiring almost nine months to complete, the study quantified a 144% return on investment from our tuition reimbursement program. Some of the key findings included avoiding talent management costs due to higher rates of promotion, internal transfers and retention and lower rates of absenteeism.
The completion of this study was a significant milestone in the evolution of our future program because it allowed us to make the case internally for investing in education assistance programs. It also helped us identify five ways in which we could enhance the value of the program to both participants and the company:
- Provide academic and financial counseling as well as ongoing “success coaching”
- Eliminate our one-year employee tenure requirement
- Move from tuition reimbursement to tuition disbursement
- Provide increased support for strategically relevant degrees from universities with superior student outcomes
- Customize and contextualize the educational content for Discover employees
All these findings led to the development of the The Discover College Commitment.
First announced in May 2018, this program has engendered overwhelming internal enthusiasm among both participants and non-participants alike. In the first two-and-a-half months since launch, nearly 10% of the company has scheduled academic counseling sessions with Guild Education counselors. Moreover, almost 500 employees have submitted college applications to The Discover College Commitment degree programs.
While it will take years to realize the long-term benefits of this program, we’re already seeing early positive returns in employee engagement and enthusiasm for the program. Moreover, the new program received more than 235 million media impressions from 85 news stories. Word of mouth has been overwhelmingly positive.
As someone who has been through this process of transitioning from tuition reimbursement to tuition disbursement, I would recommend, three things:
- If the future of your company depends on having a well-educated and a committed workforce, start now to make it easier for your employees to expand their education through a tuition disbursement program.
- Find the help you need to design a program that works for you. In our case, we chose to partner with Guild Education because we felt they had complimentary skills that could help us optimize our program.
- Be sure you have the structures in place so that your employees who enroll can be successful. For us, we knew we wanted to enhance the program in the five ways mentioned above.
If your college tuition reimbursement program has low participation or interest, perhaps it’s time you look at modernizing it by taking the first step in evolving from a tuition reimbursement to tuition disbursement program.