Affordable Degrees on Aisle Six

Wal-Mart is offering workers chances to earn cheap college credit. More firms could follow suit.

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Hundreds of Wal-Mart employees have already enrolled in online classes at American Public University via the retail giant's recently announced partnership with the online university. According to online education experts, the partnership could signal the onset of a trend. The deal, which allows Wal-Mart employees to earn degrees at a discounted rate, is the largest of its kind and has piqued the interest of other organizations looking to provide a customized education to their employees. The Los Angeles Police Department recently entered into a similar partnership with APU's sibling institution—American Military University—and even more partnerships may be on the horizon for APU and other online universities. "We are having similar types of discussions," says APU spokesman Brian Muys. "I think that that's certainly pointing to a trend across the industry."

Trace Urdan, a for-profit education analyst and managing director at investment bank Signal Hill Capital, notes that at a 2008 commission on higher education held by then-Secretary of Education Margaret Spellings, several corporations made clear that they were not content with the competence of the incoming workforce. In an effort to alleviate the ongoing problem, Urdan says that other firms may follow Wal-Mart's lead and turn to online universities. "Presuming [the Wal-Mart/APU partnership] goes to plan, I would not be surprised to see other companies stepping in with similar programs because they get to influence the training for their existing labor force," says Urdan. "Traditional education isn't really set up for that today."

[Read about how American Public University and other colleges are playing "The Name Game."] 

Wal-Mart examined 81 schools when searching for a partner to help educate its employees. It considered community colleges and traditional universities as well, but settled on an online program because 72 percent of workers polled said they'd prefer to engage in their college education online due to the convenience. "For a lot of employees there's an appetite for [getting a degree] online because of work/life balance and time commitments," says Lenny Sanicola, benefits practice leader at WorldatWork, a human resources association. 

Ultimately, the Bentonville, Ark.-based retailer landed on APU because the school has kept tuition relatively low—$250 per credit hour compared to more than $500 per hour for other major online universities—in recent years, and is knocking an additional 15 percent off tuition costs for Wal-Mart employees. Sanicola thinks such programs could be appealing to firms that have a workforce with a socioeconomic makeup comparable to Wal-Mart's. "Will we see more partnerships?" says Sanicola. "If I have a workforce that has limited access [to education], this could help provide an avenue, especially at a discount."

[Learn more about online education.]

Wal-Mart maintains it will not play a part in shaping the curriculum. But APU has agreed to award Wal-Mart employees college credit for some of the on-the-job training employees have already received (pending APU's evaluations of Wal-Mart's in-house training). Employees can enroll in both undergraduate and graduate programs that are designed to compliment their professional roles. (Someone working in transportation logistics might pursue a logistics degree, for instance.) In addition to the 15 percent tuition discount, Wal-Mart is offering employees $50 million worth of aid over the next three years. "[The employees] have an interest in advancing their education and Wal-Mart has an interest in helping them advance their education," Urdan says. "There's a lot of stuff that [Wal-Mart] would like them to learn. They're going to pay more attention if they're actually getting a degree out of it rather than sending them to a training class somewhere." 

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