Tuition-assistance programs shrink amid downturn

As the recession drags on, a growing number of companies are cutting back on tuition reimbursement for employees who take job-related classes.
The most high-profile cutbacks have been at Lifespan, the nonprofit hospital group that is the largest private employer in Rhode Island. As part of a broad cost-cutting initiative announced last month, the company will no longer provide tuition assistance for employees who take classes outside of “mission-critical clinical areas,” which include nursing and pharmacy.
In addition, Lifespan said it would reduce reimbursement rates to 75 percent of the cost of courses; cap the benefit at $1,250 per year for full-time employees and $625 for part-timers; and require workers to pay 25 percent of the cost of its Educational Partnership Programs. The changes took effect on April 1.
“This was a very difficult decision, because we are committed to being a learning institution,” Lifespan spokeswoman Linda Shelton said in an e-mail. But she said the reductions allowed the company to leave intact other benefits like health insurance. She noted that the hospital group would continue to offer computer training and other classes through an internal program, the Lifespan Learning Institute.
Lifespan is not alone. At the Community College of Rhode Island’s Center for Workforce & Community Education, which develops credit and noncredit programs for workers, the number of company-specific classes has dropped by about 75 percent over the last year, from 20 per semester to five, according to Suzanne D’Onofrio, the school’s director of work force training and corporate education.
“With this economy, the first thing everybody cuts back is training,” she said. “Businesses aren’t really going out and upgrading their work force. They’re just keeping everything stagnant.” However, D’Onofrio said she has not seen a decline in the number of workers taking the school’s for-credit courses, although she noted they may be shouldering more of the cost now, and grant-funded programs also continue to be popular.
D’Onofrio said she is working to keep CCRI’s programs relevant, and recently switched her focus to vocational training and green jobs. “That’s the name of the game,” she said.
The state’s double-digit unemployment rate has also led to an influx of new students at Bryant University’s Executive Development Center, said Annette Cerilli, the center’s director, with many of them taking advantage of state training grants. Workers say they are “willing to put $4,000 in myself before I put it in my 401(k),” Cerilli said.
That has saved Bryant from a major decline in revenue as companies pare spending on education. “Where we see a reduction in one area, we see an increase in the other area,” Cerilli said. “We’re pretty fortunate.”
Even before the downturn, most businesses in Rhode Island did not offer tuition assistance. In 2007, a state survey of 950 companies found that only 21 percent offered tuition reimbursement to full-time employees, and just 7 percent offered it to part-timers. By comparison, about 80 percent of the companies offered health insurance and paid time-off to their full-time workers.
But not all companies are cutting back. Cox Communications, which has 1,200 employees in New England, continues to offer up to $5,000 each year for full-time workers’ educational expenses. The money can be put toward tuition, fees, textbooks or supplies, as long as the course is job-related or otherwise useful to Cox. Kathy Gillis, Cox’s vice president of human resources in New England, said in a statement the company thinks educational assistance will help Cox to remain “a leader in the hyper-competitive and evolving broadband communications industry.”
“Tuition reimbursement is one component of development and training efforts that ultimately help to engage and empower our employees as our most competitive advantage,” Gillis said.
Middletown-based Bank Newport offers full-time employees $5,000 per year in tuition assistance for graduate coursework and $3,000 for undergraduate classes, with half those amounts available to part-timers. Like Cox, the bank allows employees to use the benefit after six months of work.
In fact, it is now easier for the 280 employees of Bank Newport and its insurance subsidiary to get reimbursed. The bank used to pay larger amounts to workers who earned higher grades, but recently switched to offering the full amount to all employees who get a “B” in graduate courses or a “C” in undergraduate work.
“A lot of people are working full time and probably putting in a lot of effort, and what difference does it make if they got an ‘A’ or a ‘B’?” explained Wendy Kagan, the bank’s vice president of human resources, noting that many employees are also caring for children.
Although the bank reminds employees about the tuition program periodically, most do not use it, Kagan said. Most of those who do are workers with associate’s degrees who want to get their bachelor’s, she said. &#8226