Walmart is now offering college tuition to employees for $1 a day

  • Walmart announced on Wednesday that it will offer low-cost college education to part-time, full-time, and salaried employees at three universities, all of which have online programs for working adults.

  • Employees will pay just $1 a day, which works out to about $75 per semester.

  • The catch is that employees must study business or supply-chain management.

  • The new initiative will likely benefit Walmart more than it will cost the company.

On Wednesday, Walmartannounced that it will offer low-cost college education to its 1.4 million part-time, full-time, and salaried workers at Walmart and Sam's Club.

Employees will pay just a dollar a day, which works out to about $75 per semester. The retail giant is partnering with the University of Florida in Gainesville; Brandman University in Irvine, California; and Bellevue University in Bellevue, Nebraska. All three are nonprofit universities that have online programs for working adults.

This content is not available due to your privacy preferences.
Update your settings here to see it.

While the initiative may sound too good to be true, there is a catch: The employees must study business or supply-chain management, and have worked at Walmart for at least 90 days.

According to a statement from Walmart, offering college classes to employees is part of its attempt to improve retention rates and engagement at work. If an employee leaves the company before they earn their degree, they can continue their studies on their own without the financial assistance from Walmart.

Other companies have made similar investments in higher education for employees. Starbucks provides workers a full ride to Arizona State University for undergraduate degrees in over 60 subjects, and Chipotle Mexican Grill gives its employees up to $5,250 in annual tuition assistance.

This is not the first time Walmart has partially picked up the tab for its employees' college classes. In 2010, it partnered with American Public University to offer online courses that counted toward a bachelor's or master's degree, but the company agreed to only cover up to 15% of tuition.

A Walmart spokesperson told The Washington Post that the company doesn't know how much it will end up spending on the new program, but it expects that as many as 68,000 employees will sign up in the first five years.

Annual tuition and fees at the three schools range from $7,365 at Bellevue University to $28,658 for out-of-state students at the University of Florida, according to US News & World Report. That means that if 68,000 employees enroll by the end of 2023, Walmart may shell out anywhere from $500.8 million to $1.9 billion annually (not counting the $1 a day employees would pay back) by that time.

The program will likely benefit Walmart much more than it will cost the company. Since 2015, Walmart has already invested $2.7 billion in training, education, and higher wages. Investing in employee education could allow managers to fill the gaps in their workers' professional skills, so the company may need to spend less on these things in the future.

This rationale is true for other large companies, which also already pour a lot of money (more than $164 billion annually, according to a recent employer survey) into employee training. As The Atlantic notes, that's about $15 billion less than what the federal government and states spend on higher education combined.

"We know there [are] a lot of benefits from a business perspective," Drew Holler, vice president of people innovation for Walmart US, said on a call with reporters. "We know we're going to see an influx of applications."

NOW WATCH: Trying the McDonald's Waygu Beef Burger only found in Australia

See Also:

SEE ALSO: A booming California coffee chain says it knows the key to one of Starbucks’ biggest customer problems