Why education benefits sometimes underperform

With in-demand skills frequently evolving, education benefits can be an effective way to keep your workforce current, deepen loyalty and help build the capabilities your organization needs to stay competitive. Yet simply offering tuition assistance isn’t always going to be enough. Ensuring that these benefits are properly used requires understanding why employees hesitate to use them and redesigning benefits to remove financial, structural and psychological barriers that may stand in their way.

Education benefits programs are frequently structured as reimbursement policies rather than workforce capability strategies. When this happens, organizations might focus on availability rather than usability, which can limit participation even when employee interest is present. Addressing that gap often involves rethinking how education benefits are structured, funded and supported in practice.

While education benefits may be available to employees, some companies may find that participation in these programs is low. For HR leaders, the gap between a well-intended policy and actual employee participation comes down to a mix of financial, structural and psychological barriers that standard tuition assistance programs fail to address.

Despite high interest in pursuing further education, cost can be a significant barrier keeping adults from enrolling in or completing college. In 2024, the National Association of Student Financial Aid Administrators reported survey findings from Gallup and Lumina Foundation, which stated 85% of U.S. adults who either stopped out or never enrolled did so because the cost of a college degree or other professional credential was too high. (Stopping out refers to stepping away from an educational program with the intention to return. Dropping out refers to quitting altogether.)

Also, the Council for Adult and Experiential Learning (CAEL) reported in 2023 that affordability “is central to adult learners’ success.” Yet, for those seeking education benefits at work, the structure of a benefits program may present significant financial barriers, such as employers that refuse to pay for educational costs until they receive an employee’s grades. In such situations, the employee has to pay tuition upfront and wait months for reimbursement — a reality that isn’t always feasible for adults working to support themselves while going to school.

For employers, reimbursement-based models can unintentionally limit access for some workers these benefits are meant to support, which may reduce participation and overall return on investment.

Some employees who work for companies that offer education assistance don’t even know the benefits are available. Or, if they do, they are unclear about how they work or what’s covered. Some may be aware of the benefits only tangentially. They may learn about college tuition reimbursement from co-workers but not in a way that provides information they can leverage to their own benefit.

For employers, low awareness is often treated as a communication problem. In practice, it can reflect a benefits experience that is too complex, conditional or fragmented to explain clearly. When employees cannot easily understand how a program works — or whether it applies to them — participation may remain low even with repeated promotion.

Many workers face uneven access to employer-funded education, and those who could benefit most are often least likely to use it. Lower-income and first-generation students, as well as some women, are less likely to tap these benefits; they may not even realize they are eligible for them.

Additionally, annual funding limits and strict employer or institutional rules can leave gaps that don’t fully cover tuition. This forces employees who wish to seek education to juggle other forms of aid or simply cover out-of-pocket costs.

Highly restrictive eligibility rules may reduce short-term cost exposure, but they can also limit long-term participation and equitable access.

Poor administration of education benefits programs has historically led to less engagement. This can look several ways. For example, employees may be able to choose from a limited list of eligible institutions where they can pursue their education, but knowing what to look for in a school isn’t always a given. Sometimes, organizations don’t regularly vet or maintain their lists of available schools, and an employee might choose an unsuitable option.

Other organizations might retain the services of a third-party company to act as an intermediary between employees and institutions. This can also lead to conflicts of interest.

Additionally, employees typically can only choose an educational program that is relevant to their job or work responsibilities. When an employee isn’t happy with their current role, or plans on leaving or changing positions, enrolling in an educational program can offer a conundrum. Do they study what they want to study or do they study what will help them in a role they plan on leaving? Sometimes, the requirements of the benefits program make that decision for them.

When program design emphasizes administrative control over employee experience, participation may stall, even when funding is available.

Another set of reasons employees may struggle to use education benefits is emotional or psychological. Consider the following challenges:

• Hassles that make starting and continuing feel overwhelming: This includes lengthy intake processes, multiple confusing assessments, unclear next steps and frustrating technological issues.
• Scarcity of time and money: Workers juggling caregiving, multiple jobs or unstable schedules may get discouraged by immediate bills and crises. This can make it hard to justify investing energy in a program whose rewards feel distant.
• Identity and mindset barriers: Employees who have been out of school for years, had negative past schooling experiences or see themselves as “not a school person” or “too old for digital skills” often doubt their ability to succeed.

For employers, such psychological barriers can be misinterpreted as a lack of motivation or interest. In practice, they reflect the level of effort and uncertainty a benefits program places on the employee. When the process feels complex, uncertain or emotionally demanding, participation may decline — even among workers who value education and intend to enroll.

Time is often an issue for busy adult learners juggling a job, family and other obligations. The U.S. Chamber of Commerce reports in “The Strategic Value of Tuition Assistance” that 44% of employees surveyed by Harvard Business Review in 2024 lacked employer support and resources outside of tuition benefits. They had financial help to pay for school, in other words, but they didn’t have the time-management resources to figure out how they’d make it work in their schedules.

From an employer perspective, this highlights a common gap: Tuition assistance alone may not account for the time and cognitive load required to succeed. Programs that focus solely on funding, without complementary guidance or flexibility, may struggle to translate investment into meaningful participation and completion.

Have you noticed your participation rate plateau? Or perhaps it never quite took off? Here are a few strategies for remediating low involvement in your organization’s education assistance program.

Organizations seeking to improve participation often focus on three levers: reducing upfront cost, simplifying access and aligning education with real career outcomes.

Some institutions offer deferment, which allows students to pay their tuition costs when the semester comes to an end. While this can be helpful, if a student doesn’t meet grade expectations set by their employer, they may have to seek other financial aid options.

One potential way to offset the cost is to work with external educational institutions and other partners that can offer tuition discounts and flexible payment structures.

Additionally, tuition disbursement can help make it easier for lower-wage and hourly workers to enroll because they’re no longer required to pay for their education upfront. This involves prepaying the school or paying when a course or term is completed.

To increase awareness of education benefits in the workplace, give your employees access to advisory services that help them understand their options.

Employers can also address psychological barriers by streamlining the application process for education benefits with a simple, mobile‑friendly form that collects only the essential details. Consider postponing sensitive questions about education history or age until trust is established. Alternatively, seek that information from other sources instead.

Additionally, HR professionals can help address psychological challenges by encouraging employees to reflect on past learning experiences (learning what was successful and what wasn’t) and to connect course content to their own goals.

Employers can help workers overcome time constraints by offering flexible learning options. Online formats can be convenient and practical for working adults. Additionally, coaching and mentoring services that explain how workers might fit education into their lives can also be a valuable resource for aspiring learners.

Workers are more likely to pursue education when the process is streamlined, HR is supportive and expectations are clearly established.

• Career-aligned options: Workers tend to have a more positive view about workplace education benefits when there is better insight into skills development and business goals. HR can directly convey which educational paths lead to in-demand credentials.
• Transparent time expectations: When meeting with employees to discuss educational options, be transparent about the time it could take to complete a certificate or degree. For many adult students who work full time, the timeline for completing a degree is typically longer than that of a traditional college student.
• Guidance and encouragement: Workers who are interested in pursuing education may be unsure which opportunities would benefit them the most. Employers and HR departments can offer clarity by learning about employees’ skills and interests, then aligning them with career objectives.
• Simplified and low-friction access to funding: One way to offset the cost of an educational program is to offer direct bill (also called tuition advancement). Employers pay a worker’s tuition costs upfront and get reimbursed later. 

Organizations looking to improve participation in education benefits are increasingly rethinking traditional tuition reimbursement models. Approaches that reduce upfront cost, simplify access and better support working adult learners tend to see stronger engagement and follow-through. Learn how University of Phoenix’s Deferred Direct Bill option helps employers remove financial friction and make education benefits easier to use in practice.