Target is rolling out a new employee benefit it hopes will help it stand out today's competitive hiring market: debt-free college education.
The retailer announced Wednesday it will pay for college tuition, including textbooks and course fees, for all part-time and full-time employees in the U.S. Target joins a growing list of companies that have rolled out programs aimed at helping employees pay for undergraduate degrees. Just last week, Walmart announced it would expand its existing program to cover 100% of tuition for employees.
Target says more than 340,000 employees will be able to enroll for free in courses for high school completion, college prep, English language learning, certifications, and associate and undergraduate degrees. Target will also pay up to $10,000 annually for master's programs within its approved network of schools.
The company has dubbed the new program "the most comprehensive debt-free education assistance program available in the retail industry."
"We don’t want the cost to be a barrier for anyone, and that’s where Target can step in to make education accessible for everyone,” Melissa Kremer, Target's chief human resources officer, said in an announcement.
Corporate tuition benefits are hardly new. But historically, those benefits have topped out around $5,250 a year, based on a tax rule that allows that amount of education assistance to be tax-free for employers and employees.
In the past seven years, though, companies ranging from Starbucks to T Mobile have introduced new versions of this older benefit in which they partner directly with colleges, often through a third party, to cover all or most of the tuition costs for their employees.
The programs have dual appeal: For employers, the can help attract and retain workers. (One 2016 study found that for every dollar health insurer Cigna spent on tuition benefits, it saved an additional $2 in reduced employee turnover.) And for employees, they offer a path to a more affordable college education.
But there are limited public data around what share of employees successfully graduate through these types of programs. The companies tend to limit where students can attend and often restrict the options to online programs. They also usually outline what academic programs they'll pay for.
Target's new program is more flexible than many in that regard. Employees can chose 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 offer details on that.
Target says it plans to spend $200 million on the program over the next four years.