Chipotle Joins Corporations Offering Debt-Free Degrees

With U.S. unemployment rates at a historically low level, down to 3.5 percent as of September 2019, it behooves companies to find compelling ways to both attract and retain workers. On that note, the popular fast-casual restaurant chain Chipotle Mexican Grill is offering debt-free degrees to employees in an effort to attract and retain top talent. 

As mentioned in several news sources, Chipotle says it will pay for business and technology degrees at five universities—including the University of Arizona, Bellevue University and Wilmington University—for employees who have been at the company for at least 120 days and work a minimum of 15 hours per week. Employees can choose from 75 different degree programs within business and technology. The debt-free degrees round out Chipotle’s Cultivate Education program, which already included a tuition reimbursement program valued at up to $5,250 a year per employee.

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

The new offering is promising since total student loan debt in the U.S. topped $1 trillion in 2018, while over half of the young adults in the U.S. attending college took on debt last year.

Tuition assistance builds employee retention and loyalty  

The expanded tuition assistance program moves Chipotle closer to its goal of reducing employee turnover by adopting several tactics. By 2020, for example, the company seeks to reduce retail store management turnover to less than 25 percent year over year, according to its 2018 sustainability report. 

Other retail and food companies have found success with launching more generous higher education tuition assistance programs.

Starbucks’ tuition assistance program, which started in 2014, is a great example of how Chipotle’s new offerings can attract and retain employees: Starbucks retail employees who use the program stay with the company 50 percent longer and are promoted at three times the rate of those who do not participate. 

But educational support is not just about keeping employees—companies can also benefit from having an improved brand reputation within the marketplace.

“Providing educational benefits to employees is a great retention and development tool, but it is also a brand story,” Jason Smith, compensation manager at Denny’s and president of the Chain Restaurant Total Rewards Association, told Nation’s Restaurant News. “When companies help employees accomplish their education goals, they are telling their customer they care, and they believe in second chances.”

Comparing Chipotle’s degree programs to those at other corporations  

While Chipotle’s new offering is promising, it is not unique. Other corporations across many industries have also developed benefits to prepare their employees for the workplace of tomorrow.

And such programs can make a difference in a rapidly changing workplace. It is estimated that 64 million frontline and low-income workers need to evolve their skills to keep up with the automation arriving in the service industries, as reported by Alexandra Wilson of Forbes.

“It’s become pretty trendy for these big corporations to offer higher education benefits, tuition benefits, degree programs, things along those lines to help students,” Kevin Kinser, a professor at Penn State University and head of the school’s Department of Education Policy Studies, recently told Marketwatch. “It clearly represents the anxiety around attending college, particularly for lower-income individuals that many of these companies seem to be targeting for employment.”

Guild Education, the platform that services Chipotle's debt-free tuition program, also maintains Taco Bell’s Start With Us and Stay with Us program, Walmart’s Live Better U program, and Disney's DisneyAspire, but each program widely differs.

Taco Bell’s benefits include $5,250 per year toward an employee’s education and a scholarship that for "innovators" looking to earn a bachelor-level degree.

Walmart’s most recent addition to its program offers high-school students free ACT and SAT prep as well as college credit through an online program for the cost of $1 a day, which is usually reimbursed once the student graduates.

DisneyAspire, Disney’s $50 million education program, not only includes 100 percent free tuition, but also reimburses employees for required books and fees—an offering not provided at many employers, including Chipotle.

“There are so many new jobs that are either coming or that are here already. So, it is shifting from an employer standpoint: How [can you] differentiate yourself?” Chris Trout, VP of learning and development at the Walt Disney Co., said at a recent event, as reported by Yahoo Finance. “From an employee standpoint . . . it’s not just about ‘I need a job and where can I find the highest paying job,’ it’s ‘Where can I find a job in a place that I feel like I can thrive?’”

Image credit: Chipotle