Amazon offers to pay college fees for 750,000 US staff

It comes as the online shopping giant struggles to attract and retain staff amid an industry wide labour shortage.

The firm said it would invest $1.2bn in the scheme, with workers able to access the annual funding for as long as they remain at Amazon.

It is the latest big firm to offer to fund workers' education after similar moves by Walmart and Target.

In a blog post, Amazon said its college tuition offer would apply at "hundreds of education partners across the country" without stating which ones.

The shopping giant said it would also cover other types of education including high school diplomas and English language courses, as well as extending on-the-job career training to 300,000.

"Amazon is now the largest job creator in the US, and we know that investing in free skills training for our teams can have a huge impact for hundreds of thousands of families across the country," said Dave Clark, head of worldwide consumer at Amazon.

US firms are offering a range of benefits and incentives to lure employees back to the workforce as restrictions ease.

According to the US Labor Department, job openings hit a fresh record high of 10.9 million in July, surpassing the number of unemployed people by more than two million.

Experts say a mixture of people leaving the workforce during the pandemic, lingering concerns about Covid and a lack of childcare have prolonged the shortage.

Last month Walmart said it would pay the costs of tuition and books for its hourly staffers, with about 1.5 million people eligible.

And Target said it would offer free undergraduate degrees to more than 340,000 employees at its US stores.

Firms have also raised starting wages or offered bonuses to win workers, with some even urging 14 and 15 year-olds to apply to tackle the shortage.

College costs are rising and many families have no idea just how expensive higher education is

Paying for college is daunting even in good economic times.

When Covid brought the country to a standstill, one-quarter of last year’s high school graduates delayed their college plans, according to a survey from Junior Achievement and Citizens, largely because their parents or guardians were less able to provide financial support.

Even now, cost remains a top concern. Six in 10 college-bound high school students said the pandemic has changed their view of higher education, according to a report by Fidelity Investments.

More are wary of the price tag — 4 out of 10 students go so far as to rank cost as the “most important” factor in choosing a school, Fidelity found. Fidelity polled more than 4,000 current students or recent graduates and parents.  

“It’s something my parents have always been worried about,” said Alhassan Bangura, 18, about paying for college.

“They were never able to set up college savings,” he said of his mom and dad, who immigrated to the U.S. from Sierra Leone in 2002. “I had to be resourceful.”

The recent high school graduate from Windsor Mill, Maryland, will be a freshman at Cornell University this fall thanks to a combination of scholarships. “I was able to attend college without any debt,” he said.

Alhassan Bangura, 18, is a recent high school graduate from Windsor Mill, Maryland

Source: Alhassan Bangura

Average tuition, fees, and room and board for the 2020-21 academic year increased by 1% to $22,180 for in-state students at four-year public colleges, according to the College Board, which tracks trends in college pricing and student aid. The same expenses at four-year private institutions rose by nearly 2% to $50,770.

Though college has been getting more expensive, few students and their parents pay the full amount.

These days, most families rely on a combination of resources, according to education lender Sallie Mae, including income and savings, money from scholarships and grants, and, of course, student loans.

Since so many students now borrow to cover at least a portion of the cost, total student loan debt in the U.S. has hit $1.7 trillion.

“As young people see other generations struggle with the burden of student debt, they have clearly grown increasingly aware of how it can impact financial security,” said Rita Assaf, vice president of retirement and college leadership at Fidelity Investments.

And yet, students and their parents still underestimate the true cost. High school parents expect the annual cost of college to be $22,257, on average, Fidelity found, including room and board, books, and fees.

Roughly a quarter of parents of high school students — and 38% of students themselves — believe the sticker price for one year of college will be $5,000 or less, far below the College Board’s estimate.

“That’s the staggering piece,” Assaf said. “It’s important to understand how much debt you might be taking and how it fits in the family budget.”

To address some of challenges families are facing, the Senate Democrats’ $3.5 trillion budget resolution included a plan to make community college tuition-free for two years.

If that happens, enrollment at four-year private colleges would fall by about 12%, while enrollment at four-year public universities and community colleges would rise by roughly 18%, according to a study on the economic impact of making some college tuition-free by the Campaign for Free College Tuition and the student-led advocacy group Rise.

“You’ve got a net effect of almost 2 million more students enrolled in college,” according to Robert Shapiro, lead author of the study and a former economic advisor to President Bill Clinton.

The U.S. Attracts Fewer International Students, Loses Billions In Revenue. Here's Why

The Biden administration is hoping to attract tens of thousands of international students who stayed away from U.S. campuses during the pandemic. Foreign enrollment plummeted by 20% last year costing nearly $10 billion dollars in lost revenue. Though some students are starting to return, recovery might not be so easy. Even before the pandemic, international students were already turning away from the U.S.

In the 2018-2019 school year, foreign enrollment peaked at 1.1 million students and it's been declining ever since as countries like Australia, Canada and the U.K gain more foreign students.

That's a challenge for American colleges. But it also could be a blow to U.S. competitiveness. ​​​​Foreign students often go on to build their lives in the United States, filling our faculty offices, our laboratories, our boardrooms. One in five entrepreneurs who founded start-ups in the United States is an immigrant — and three-quarters of them first came to America as students.

International students are more likely than Americans to pay full freight. At public universities, the out-of-state tuition they pay has helped make up for a drop in state funding, especially after the Great Recession.

"They [colleges] need the tuition. They need full four-year out of state tuition payers," says Robert Daly who directs the Kissinger Institute on China and the United States at the Wilson Center. Daly argues that colleges have become too reliant on students from one country: China. "They've become addicted to this money."

Higher education is one the America's largest service exports

When the pandemic sliced away a huge chunk of foreign students, the new administration took note. Higher education is one the nation's largest service exports — bigger than agriculture exports like corn and soybeans.

Unlike the Trump administration's hostility to foreigners, the Biden administration recently called it a "foreign policy imperative" that the U.S. remain the top study destination for international students. It's putting students first in line for interviews and visa processing at U.S. consulates around the world.

But for many foreign students, the U.S. just isn't as dominant. Emily Dobson calls it the "geoswerve." Dobson, a college counselor in Brazil, has seen more diversity in where her students apply to colleges over the past few years. She says they're finding options not just in traditional destinations like Australia and the U.K. but in Qatar, Japan, and the Czech Republic. "We're not seeing the future we used to see here," she says of the United States. "Still love you. A few of you are on our list. But you know, we're going to go to other schools."

"The American Dream idea," she says, "is being questioned more."

Dobson's students are looking for more affordable options than the U.S. and for places where they can earn a degree in just three years. Safety is also a big concern — America's gun violence scares many families.

New hesitancy by foreign student spells big trouble for U.S. colleges and economy

And 70% of international students on American campuses are from Asia. The recent rise in anti-Asian hate crimes have made some of them reconsider their futures in the U.S. Early in the pandemic, Lily Cao, a Chinese student at Mount Holyoke College, was confronted in a grocery store by a woman accusing her of spreading the coronavirus. "COVID has really been the trigger point where I felt like, Oh, I might get discriminated against," Cao says. She plans to return to China to build her career in public health.

This new hesitancy spells big trouble for colleges — and for the larger U.S. economy, which is propelled by immigrant entrepreneurs, many of whom came here as college students. Competitor countries, such as Australia and Canada, make it easy for international graduates to stay and work and give them priority above other applicants for permanent residency. Britain last year introduced a global talent visa that fast-tracks people in in-demand fields for immigration. Universities in those countries frequently promote the ability to work after graduation when they recruit international students.

U.S. colleges are trying to regain their competitive edge and the pandemic may offer something of a blueprint. After more than a year of remote learning, both professors and students are more comfortable with online education. More hybrid and online programs could shorten the amount of time students would need to be in the U.S. And colleges hope a new commitment by the Biden administration to welcome international students can reignite the American Dream for students from abroad.