Chipotle to offer free tuition benefits to employees

Chipotle is serving up a powerful new perk for its employees: free college tuition.

The restaurant chain said Tuesday that it will cover 100% of tuition costs upfront for 75 business and technology degrees through Guild Education, a Denver-based company that administers tuition benefits for employers. The move expands the restaurant’s existing education benefits, which have provided employees with more than $20 million in tuition assistance over the past two years.

“Chipotle recognizes that financial barriers can be one of the biggest obstacles that impede our employees from achieving their fullest potential,” says Marissa Andrada, chief people officer at Chipotle. “We are proud to launch this opportunity for debt-free degrees by providing free tuition to help our employees excel in all areas in their lives, both in and out of Chipotle.”

After 120 days of employment, Chipotle workers become eligible to pursue degrees from five universities: the University of Arizona, Bellevue University, Brandman University, Southern New Hampshire University and Wilmington University. Chipotle employs 80,000 workers.

The program will kick off Nov. 15.

Chipotle says an employee survey revealed that education benefits were important for workers and many showed interest in business and technology programs, which is why the company decided to fund those through its new program.

The new benefit shows the “company’s commitment to upskilling its workforce and helping employees achieve their professional goals,” says Rachel Carlson, Guild Education’s CEO and co-founder.

While education benefits have been around for a while, free tuition benefits are relatively new and rare. Employers are turning to free tuition benefits as the war for talent heats up and employers see the effects student debt is wreaking on the workforce.

Discover, Disney, Bright Horizons and trucking company U.S. Xpress Enterprises are among other companies that offer workers free tuition in a bid to attract and retain talent in a highly competitive labor market. Walmart, the nation’s largest employer, allows eligible employees to pay just $1 a day to earn a degree through Guild Education. All Walmart and Sam’s Club workers in the U.S. who have been with the company for 90 days are eligible. It applies to all part-time, full-time and salaried employees.

Free tuition benefits also are a way to take aim at student debt, a growing pain point for HR leaders. There are now 44 million Americans who owe a total of $1.5 trillion in student loan debt, exceeding both credit card debt and auto loan debt, according to the Federal Reserve. That debt, experts contend, is taking an enormous emotional toll on employees, while wreaking havoc on productivity and presenteeism in the workplace. While a growing number of employers are rolling out student loan repayment benefits to help, offering free or nearly free tuition may help some people from incurring the debt to begin with.

See also: How one employer is getting creative to reduce student debt

Chipotle has already heavily invested in tuition benefits for employees. Through its existing tuition reimbursement program, called Chipotle’s Cultivate Education program, eligible employees can be reimbursed for tuition up to $5,250 a year at the school of their choice. The free degree program will be part of Cultivate Education.

Those investments have paid off: According to Guild Education research, 63% of students enrolled in the program are first-generation college students, and 86% have reported feeling that they need additional education to achieve their professional goals. Employees enrolled in the Cultivate Education benefits program are twice as likely to be promoted within the company compared to their peers.

“We’ve seen the positive impacts of their Cultivate Education benefits program firsthand—not only in the lives of their employees, but also in the strength of their workforce,” Carlson says. “[That includes] boosting the company’s recruitment efforts, improving employee retention, and increasing upward mobility through upskilling.”

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