Learn how Level Helped Reimagine the Tuition Reimbursement Experience
It sounded like a great idea
Tuition reimbursement sounds like a great idea: as part of an employee benefits package, a company offers significant and tangible help to those employees who wish to continue to learn and grow, by reimbursing college coursework, continuing credits, or other professional enrichment courses. Programs often cover eligible tuition expenses, typically with a benefit level from $1,000 annually up to the maximum deductible amount under the tax code, which is currently $5,250.
For employees, this can be an invaluable part of the total rewards package that offers essential relief in lessening or even eliminating the financial burden of higher or further education. For employers, this can provide a practical means to upskill and develop its people, create an enhanced workforce, and help attract and retain talent.
What’s not to love?
By its utilization, something was clearly wrong with Tuition Reimbursement
However, when you take a closer look at the way this benefit is utilized, something starts to look very wrong. In short, there’s a misalignment between the concept of tuition reimbursement as a valuable offering and its real-world usability and user experience.
On one hand, employees agree that tuition reimbursement is an attractive and desirable benefit:
- 84% of employees say that access to a tuition assistance program was an important factor in their decision to join the company (EdAssist)
- 71% rated tuition assistance as the best or among the best benefits offered by their employer (excluding health-care benefits) (EdAssist)
But on the other hand, it is actually something that employees very rarely use:
- Less than 10% (and in some cases as little as 1%) of employees make use of their tuition reimbursement benefit (CSMonitor)
- Nearly half of the funds set aside for tuition reimbursement remains unspent (CSMonitor)
Culprit: the employee experience – Tuition Reimbursement often required a significant upfront financial outlay
Let’s think about the actual user experience for a minute and see if we can get to the crux of the problem with tuition reimbursement. If you’re not already wearing them, try to put yourself into the shoes of your average American employee:
You’re living on a tight budget where every dollar counts;
You would like to take a four-month higher education course to help get ahead. The course is $2,500, and you know that your tuition reimbursement benefit covers $5,250 a year. So far so good;
You take a closer look at the details of your tuition reimbursement benefit and realize, after filling out a ton of paperwork, that you first have to pay for the course out of your own pocket, then you need to wait until you meet all of the eligibility requirements for reimbursement (e.g., passing the class) before your employer will actually reimburse you.
In other words, you personally need to have $2,500 on hand; you pay for your course upfront, out of your own pocket; and then you’re expected to wait for four months, during which time you study and work hard with fingers crossed that you pass, so you can get your $2,500 back.
So, while in some cases, tuition reimbursement is a seemingly generous benefit, in the real world, it’s a benefit many employees simply cannot afford to use. Added to that, it’s a benefit that can only be accessed by jumping through numerous administratively difficult and complex hoops. Suddenly, it no longer feels quite so generous. Or such a great idea.
We need to address this. We need to do better.
And that’s exactly what Level did when we re-imagined the tuition reimbursement experience to make it more accessible for all employees.
...you personally need to have $2,500 on hand; you pay for your course upfront, out of your own pocket; and then you’re expected to wait for four months, during which time you study and work hard with fingers crossed that you pass, so you can get your $2,500 back.
Level solved the employee experience problem by making tuition available before taking the course
Recently, one of Level’s valued clients was struggling with the abovementioned misalignment surrounding tuition reimbursement. Same story: its employees said they valued the benefit, but they weren’t using it. This gap became a strategic concern for the company as it was in the midst of an ambitious upskilling initiative, with people goals directly linked to the company’s financial growth. Having previously worked together on other employee benefits, the company approached Level with this challenge.
At Level, when we’re faced with a challenge, we solve the problem by looking at it through the lens of the employee experience. We’re committed to making the experience of benefits more simple, more meaningful, and more personal. And often, that means reimagining the entire experience from the ground up to make it more accessible.
What we saw with tuition reimbursement was not only an overly complex process, but also a significant challenge in terms of access and equity. Where others saw a somewhat standard (albeit under-utilized) program, we saw a benefit that could cost an employee $2,500 just to use. The way the experience was set up presented a glaring gap in terms of accessibility for those employees living on a tight budget, who might not have these funds readily available. Because of how this benefit has historically been designed (in one form or another, this type of offering has existed for over a century), many employees could not afford to use it. Plus, of course, “reimbursement” is by definition after-the-fact, and first requires you to pay for the course/class/program yourself.
Clearly, this benefit was ripe for modernization. Although fundamentally generous and seemingly positive, we know today that an offering like this is only as good as its usability: benefits need to be regarded less as transactional (what the employer offers), and more as experiential (how the employee actually uses it).
So we asked ourselves: can we transform the experience of the benefit from tuition reimbursement to a benefit that was available when people actually needed it. How would the employee’s journey with the benefit need to change? What tools could we design and introduce to help?
Level’s reimagined experience: The Level Education benefit
Here is how we re-imagined the experience.
For any employee wishing to further their education or skills by taking a vocational class or enrolling in a higher education course, the old tuition reimbursement journey went like this:
- The employee submits considerable paperwork to HR in order to get approval for the class or course they want to take;
- HR gives the company’s approval, contingent on a number of factors (e.g., that the employee passes the course);
- The employee is required to pay for the course upfront, using their own money;
- The employee completes the course and meets the conditions;
- The employee submits all necessary paperwork attesting to the fact that they have met the conditions for reimbursement;
- The company reviews and processes this paperwork, then reimburses the employee.
The journey we introduced streamlines this process, first and foremost to eliminate the need for the employee to use their own money to pay for the course:
- The employee submits basic information and requests Level to pre-authorize their Level Card for spending on education expenses.
- If approved, Level authorizes the card for the course expenses and the employee’s purchases are paid with the company-funded card.
- Once the employee completes their course, the proof of grade or certification is submitted to Level, and they are eligible to take future courses as they desire.
Reimagining the experience to be more accessible to all employees corrected the utilization problem
This sleeker, re-imagined process gives employees the peace of mind to no longer worry about pulling together their own money, in the hope of getting it back months later. Instead, they are given the time and space to focus on their coursework and studies, and can now truly make full use of this valuable and potentially transformational benefit their employer has provided.
Where there formerly was a process-heavy experience with a significant upfront financial outlay required, there is now a highly usable benefit that comes with a fair and positive experience. Where there was a disconnect between desirability and use, there is now alignment.
And most importantly, the numbers speak for themselves: a significant uptick in program usage has already been observed, with 10% of the employee population using the benefit within the first 5 months of this year.
For the employee, the toughest decision now is not whether or not they can afford to take the leap into further education, but which course will bring out their fullest potential. That’s the power of the Level Card.
Want to learn more about how the Level Education benefit can empower all of your employees to maximize their potential and skill set? Reach out to us to learn more.