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Target is rolling out a new employee benefit that it hopes will help you stand out in today’s competitive hiring market: debt-free college education.
The retailer announced Wednesday that it will pay college tuition, including textbooks and course fees, for all full- and part-time employees in the U.S. Target joins a growing list of companies that have implemented programs designed to help employees pay for their college degrees. Last week, Walmart announced that it would expand its current program to cover 100% of employee tuition.
Target says more than 340,000 employees will be able to enroll for free in courses for high school completion, college preparation, English language learning, associate and undergraduate degrees and certifications. Target will also pay up to $10,000 annually for master’s degree programs within its approved network of schools.
The company has called the new program “the most comprehensive debt-free educational assistance program available in the retail industry.”
“We don’t want cost to be a barrier for anyone, and that’s where Target can step in to make education accessible to everyone,” Melissa Kremer, Target’s director of human resources, said in an announcement.
Corporate tuition benefits are not new. But historically, those benefits have exceeded $5,250 a year, under a tax rule that allows that amount of educational assistance to be tax-free for employers and employees.
However, in the last seven years, companies ranging from Starbucks to T Mobile have introduced new versions of this age-old benefit where they partner directly with universities, often through a third party, to cover all or most of their needs. the tuition costs of their employees.
The programs have a dual appeal: For employers, they can help attract and retain workers. (A 2016 study found that for every dollar health insurer Cigna spent on tuition benefits, it saved an additional $2 in reducing employee turnover.) And for employees, they offer a path to a more affordable college education.
But there is limited public data on what percentage of employees successfully graduate through these types of programs. Companies tend to limit where students can attend and often restrict options to online programs. They also often describe which academic programs will pay.
Target’s new program is more flexible than many in that regard. Employees can choose from 250 business-related programs at more than 40 schools, including the University of Arizona, Oregon State University, and historically black colleges and universities like Morehouse College and Paul Quinn College. There are also some options for in-person courses, though Target’s announcement didn’t provide details on that.
Target says it plans to spend $200 million on the program over the next four years.
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