It’s an anxiety-ridden decision for millions of students each year: how to compare the quality of the colleges they’re considering so they can ensure a pay off from what will likely turn out to be the largest investment of their lifetime.
While a plethora of college rankings serve as a crude proxy for quality among thousands of colleges in the U.S., most students don’t attend the brand-name institutions that tend to top the rankings. In reality, students are often limited by finances, academics, or family and job obligations and have just a few choices about where to go. According to a recent study by the American Council on Education, the average freshman at a public university attends a campus that is within 100 miles of home.
Quality control of higher education is governed by a national network of regional accreditors approved by the U.S. Department of Education. Without accreditation, a college can’t access federal financial aid for its students. But accreditors are run and financed by the colleges themselves. It’s kind of like the fox guarding the hen house. Colleges determine quality measures they need to ultimately meet.
In recent years, such self-regulation has come under increased scrutiny as questions have been raised about colleges that continue to operate with low graduation rates or that produce graduates deep in debt and without any job prospects. Last month, an advisory board within the Education Department voted to strip one of the largest accreditors in the country of federal recognition because of its lax oversight.
While there is widespread agreement among college officials and policymakers that the current accreditation system is broken, this is less consensus on what should replace it. While that debate rages on, a group that is the largest consumer of college graduates is increasingly taking on a greater role in quality control: employers.
Employers are beginning to define quality in higher education through their tuition-assistance programs. Some 71 percent of employers offer tuition benefits to their workers, according to Deloitte, and spend nearly $22 billion on the benefit annually. Most employers offer a flat-rate benefit each year and have long controlled how that money is used — for classes related to a person’s job or other positions in the organization. Now, employers want more oversight in where their dollars are used.
“Busy workers don’t have time to distinguish between colleges and universities,” Bonny Simi, president at JetBlue Technology Ventures, said during a panel discussion I moderated at a U.S. Education Department summit last week. “They probably haven’t heard about the problems at some institutions and don’t pay attention to graduation rates or accreditation. We’re doing that work for them and eliminating some of the complexity.”
Simi leads JetBlue Scholars, a new program started by the airline that takes the place of the traditional tuition benefit (JetBlue never offered tuition assistance before starting the program earlier this year). About 6,000 of JetBlue’s 18,000 employees have a bachelor’s degree, Simi said. Many more have some college credit but no degree.
JetBlue Scholars is designed to get employees with at least 15 credits to complete their degree. The airline works with just seven pre-approved providers, including Straighterline and Saylor.org. They evaluate credits that can be awarded for workers’ previous work experience or military service and offer one course at a time to employees.
All the costs are covered by JetBlue. The course work is completed virtually at Thomas Edison State University in New Jersey, which awards the degrees. Some 400 employees are enrolled in the program. Their average age is 42.
JetBlue is far from alone. Other large employers are taking similar approaches in picking one or just a small group of colleges where employees can use their educational benefit.
Starbucks, for example, has partnered with Arizona State University to allow all benefits-eligible employees in the U.S. to complete their degree with full tuition reimbursement (like JetBlue, just a quarter of Starbucks employees had a bachelor’s degree). And Anthem Inc., one of the nation’s largest health benefits companies, has joined up with Southern New Hampshire University to offer free self-paced associate and bachelor’s degree programs for their employees.
In making these exclusive deals, the companies are often not only negotiating lower tuition prices than they would pay if the employees enrolled on their own, but they are also making judgments about quality. Like students worried about wasting their money at a sub-par college, employers are also trying to reduce their risks.
Given how much money employers spend on tuition benefits, where companies decide to spend their dollars has ripple effects. Already, for-profit colleges have seen their enrollments plummet, in part because fewer adults are using tuition benefits at their institutions.
Employers have long played a part in determining quality in higher education by simply deciding where to recruit traditional undergraduates into full-time jobs. Now as colleges and policymakers debate how to measure outcomes and regulate institutions that receive $150 billion in federal aid each year, employers are making their own assessments that just might put some colleges with poor outcomes out of business.
Correction: An earlier version of this column referred to outdated qualifications for employee tuition reimbursement at Starbucks. The story has been updated.