Amazon Set to Cover Its Employees’ Tuition

• Amazon recently announced that they would invest $1.2 billion to pay for their employees' college tuition through their Career Choice program. 
• Full-time Amazon employees are eligible to receive up to $5,250 per year for their tuition costs.
• Amazon’s college program will be implemented in January 2022.

On September 9, Amazon announced they would be covering their employees’ college tuition fees. The CEO of Worldwide Consumer at Amazon, Dave Clark, said the company will invest a total of $1.2 billion by 2025 to expand its educational and training benefits for more than 750,000 front-line workers. 

Amazon implemented its Career Choice program more than ten years ago to remove the barriers for their employees regarding education and job skills training. Regarding education, the program offers to pay for Amazon's employee's college tuition and high school diplomas, GEDs, and proficiency certifications, including English as a Second Language (ESL) certifications. 

The program will be available for Amazon workers who have been employed at the company for at least three months. Amazon's move to support its employees has enabled more people to want to work for the world's largest online retail store. 

When will the Amazon’s Career Choice Program go into effect?

The program will commence in January 2022 for all United States Amazon employees. Previously, Amazon covered up to 95% of their employees' tuition fees. However, they increased the amount of money put aside for financial aid to compete with competitor Walmart, which offers similar perks to their employees. Amazon wanted to keep a competitive advantage when it came to applicants deciding where to apply for jobs.

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Starting in January 2022, Amazon will cover a portion of the college tuition for full-time and part-time workers.

Unfortunately, specific laws prohibit Amazon from fully funding its employees' tuition fees. Thus, the maximum they can offer without going over the threshold is $5,250 per year. As a result, they have decided to allocate the max of $5,250 towards tuition for their full-time employees. On the other hand, they will pay 50%, or $2,625, towards tuition for part-time employees who wish to pursue a degree. 

Student loan debt is a crippling factor for many college graduates. Debt, student loans and otherwise, often causes a financial restriction in other areas of people’s life like buying a home and paying for necessary items like groceries and gas. According to Nerd Wallet, the total student loan debt in the United States has hit a record high of $1.59 trillion. By Amazon paying employees college tuition, it will help decrease the need for its employees to take out student loans.

Why has Amazon decided to cover higher tuition fees?

Among various reasons, Amazon increased its budget for tuition fees to offer competitive benefits with the rise in people searching for jobs. In addition, the pandemic allowed the e-commerce giant to thrive as many parts of the nation began lockdown procedures. The lockdown meant more people were ordering from home, leading to an increase in demand and workforce. 

Now that the economy is slowly returning to normal, many people are looking for jobs. Earlier this year, Amazon’s domestic competitor, Walmart, announced they would also be covering 100% of their employees’ cost of attending a post-secondary institution. The incentive added by their competitor allowed Walmart to have a higher chance of receiving more suitable applicants. 

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Amazon fulfillment centers are an average of 800,000 square feet in size and can employ more than 1,500 full-time associates.

It is critical to remain competitive in the job market to ensure the corporation has the best employees to carry out its operations. Therefore, increasing the amount of money Amazon set aside for each employee increases their chances of potential applicants choosing Amazon over their competitors.  

Some corporations partner with post-secondary institutions to provide an additional incentive to their employees. When these corporations partner up, such as Starbucks and Arizona State University, employees can pursue a higher level of education for free. Amazon stated they had reached out and attempted to partner with schools but did not disclose further information.   

Requirements to be eligible for Amazon’s Career Choice Program

One key benefit of this program is that Amazon employees will receive the funds for their education before beginning the academic year. Amazon's rationale behind this decision is that some of its employees need immediate access to the funds for their education. Thus, instead of reimbursement at the end of the year, Amazon has decided prepaid money is a more convenient and suitable approach for both parties involved.

In conclusion, the decision to increase the amount of tuition paid is beneficial to both Amazon and its employees. With the employees able to receive a grant, the net price of tuition they need to pay out of pocket lowers, meaning they will have lower levels of financial anxiety. As for Amazon, the plan to pay for education gives them a higher chance of appealing to better applicants.

To be eligible for this financial aid program, you must be an Amazon employee who has been employed for a minimum of 90 days. If you wish to apply for financial aid, click here and sign in using your Amazon login.

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