Study Reveals Tuition Reimbursement Benefit Is Paying off for Cigna and Its Employees

Posted By Donna Fuscaldo on May 12, 2016 at 2:55 pm
Study Reveals Tuition Reimbursement Benefit Is Paying off for Cigna and Its Employees

College tuition reimbursement has long been a benefit offered by many companies but its actual impact was, until recently, never properly measured. Though usage rates for this benefit are low among employees, hovering around one to five percent, a new study conducted by Accenture for the Lumina Foundation found that both employees and employers stand to benefit from this underused company benefit.

In the first of a series of case studies commissioned by Lumina, a non-profit working to increase the number of people with degrees and certificates, Accenture analyzed the education reimbursement program at the health services company Cigna. Over three years, from 2012 through 2014, Cigna earned a 129 percent return on its investment in college reimbursement for its employees. That means for every dollar Cigna invested it got $1.29 back.

What’s more, employees who took advantage of the benefit were 10 percent more likely to get promoted and 7.5 percent more likely to be transferred to different roles. That’s a win-win for both sides, where Cigna lowers its turnover and recruitment costs and employees get a break on college expenses and take advantage of different opportunities within the organization.

“We knew it was a competitive benefit but we had no way of quantifying the extent,” says Karen Kocher, Cigna’s chief learning officer. “We now have evidence that education reimbursement is a very valuable offering for employees and the company.”

Companies playing a role in combating student loan debt

Lumina’s efforts to analyze the ROI of tuition reimbursement comes at a time when companies of all sizes are looking at ways to help tackle the student loan debt crisis and improve the graduation rate among college students. With the nation collectively owing more than $1.3 trillion dollars in student debt, many recent graduates are coming to work saddled with a lot of debt. That not only impacts the productivity of a company but it’s also easier to lure workers away for more money, thereby increasing recruitment and retention costs.

There are also plenty of workers, who haven’t earned a degree or certificate, that could benefit from having one at a time when more employers are preferring to hire job candidates and promote employees with more education. By offering employees assistance with tuition, the general idea is they will advance themselves, better perform their jobs and stay at the company longer.

Still, with low utilization rates, tuition reimbursement benefits have become viewed as added costs at many companies, rather than as an investment and strategic advantage. “Historically most organizations used tuition reimbursement as a check box everyone says they have,” says Kocher. “Now we are able to explain to people the value first of all and differentiate our story.”

Tuition reimbursement is heralded as a way to increase the number of graduates, fighting the student debt problem by aiding in producing more graduates who are employable and can earn a good wage. Increasing the number of graduates is particularly important because the need for degree holders is only going to increase in the years to come. According to Georgetown University Center on Education and the Workforce by 2020, 65 percent of all jobs will require a degree, certificate or education beyond high school.

Cigna boosts its tuition reimbursement program

In the fight against crippling student loan debt, tuition reimbursement may play a big role, but its prominence could be hindered by an alternative weapon: paying down employee’s student loan debt. A handful of companies have started offering it as a benefit, agreeing to pay a portion of a worker’s student loan debt for a set number of years. Employees welcome the help and employers get employees who stay longer.

While it’s not clear if companies will choose that option over reimbursing higher education or do both, one thing is for sure, Cigna is so sold on education reimbursement that after seeing the research results, the company enhanced its tuition reimbursement offering. Cigna increased the maximum it will pay workers in high demand areas up to $10,000 for undergraduate and $12,000 for graduate studies. That’s up from $5,250 and $8,000, respectively.

Recognizing that countless people, who do graduate, come out with worthless degrees, Cigna added an advisory service to the offering to help employees navigate their higher education and career options, steering them toward those degrees and careers that are viable and thriving. Mentoring is included to help students complete the degree or certificate program. Cigna also got some colleges and universities to agree to accept payment after the end of the semester so the employee doesn’t have to come up with the money upfront and wait for reimbursement. The company anticipates an even larger ROI thanks to these new initiatives.

Haley Glover, a strategy director at Lumina Foundation, says the lack of studies on the ROI of tuition reimbursement and the fact that 60 percent of companies offer it, calls for a deeper look. “Employers spend billions of dollars every year on education and training,” says Glover.  “Our first objective is to start digging in on the value proposition of that kind of investment.”

Cigna’s ROI from education reimbursement is impressive, but it’s still unclear if other companies being studied by Lumina will yield the same response. There are currently four more companies being analyzed with plans to release the findings throughout the year.

Donna Fuscaldo
Donna Fuscaldo is a freelance journalist hailing out of Long Island, New York. She has also written for,,,, Business Insider, Dow Jones Newswires and the Wall Street Journal.

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