Fiat Chrysler to offer free college for dealership workers and their families

The company's program provides free tuition for employees' families to Strayer University, an online, for-profit college.

In May, Fiat Chrysler Automobiles (FCA) announced a partnership with Strayer University that allows all employees working at Chrysler, Dodge, Fiat, Jeep, and Ram dealerships to earn a no-cost, no-debt college degree at the for-profit college.

Now, FCA has extended their education benefit Monday to include employees’ spouses and children. Now FCA’s 180,000 employees and their 700,000 family members can earn a college degree for free.

“Dealers tell us that education is a benefit frequently requested by their employees,” Al Gardner, Vice President of Dealer Network Development, FCA North America, said in a May press release. “With the increasing cost of a college education, offering free college degrees without the burden of debt presents a significant value that we are pleased to provide and that differentiates us from our competitors.” 

But Chrysler is not the only company to recognize employees' demand for tuition assistance programs. McDonald’s and Chipotle both offer tuition reimbursement programs for their employees, up to $1,050 and $5,250 respectively. Starbucks announced a partnership with Arizona State University in April, offering 100 percent tuition reimbursement for all eligible US employees. And earlier this month, Starbucks announced they would begin providing current or former members of the US Armed Forces with an additional tuition-free education at ASU for a spouse or child.

But Chrysler’s far-reaching program seems to stand out in that it offers fully paid college tuition to all employees and their families, regardless of veteran status.

And, unlike many other tuition-benefit programs, FCA covers all tuition, fees, and books for employees and their families without any reimbursement process. 

“There’s zero out of pocket expense,” Strayer CEO Karl McDonnell said. “All you have to do is sign up with your dealer and then you attend.”

A 2014 poll by Gallup and the Lumina Foundation found that almost 96 percent of Americans say a degree beyond high school is important, but 79 percent of adults say education in the US is not affordable for everyone in this country who needs it. One-quarter of employees without a college degree say they have asked their employer about potential tuition support or reimbursement opportunities.

But employers don’t have to stomach education benefits for the good of the public. A lot of times, it makes financial sense. 

While Chrysler’s new program may be the gold standard of employee education programs, tax breaks make education benefits feasible for even the smallest companies. Employers' annual reimbursements for education programs up to $5,250 are tax-deductible – meaning the employer pays very little out of pocket for smaller programs. 

And instead of wage increases, businesses are offering employees more benefits as a way to cut costs.

“There’s been this seismic shift,” Gary Burnison, chief executive of the talent management firm Korn Ferry, told the Washington Post. “And I think one of those is that the raise has gone the way of the gold watch.” 

Company spending on benefits rose 16 percent from 2004, compared to a mere 2 percent increase in wages. Benefits make up 31.6 percent of workers’ total compensation, and the percentage continues to rise.   

Not only do more benefits make economic sense compared to wage raises, employers are also encouraged by benefits’ ability to recruit and retain employees. In a 2012 report by the consulting firm McKinsey & Company, a majority of respondents report “tailored flexible compensation options have a positive impact on retention.” Fifty-seven percent of respondents had a positive impact from greater flexible compensation options, and only 6 percent said they had a negative experience from non-traditional benefits. 

“Families are often faced with tough choices about how to pay for college,” Mr. Gardner said in a statement. “Expanding this benefit to employees’ immediate family members positions our dealer network as the ‘employers of choice.’”