Dr. David Ferreira, Provost of Charter Oak State College: Turning Employee Tuition Benefit On Its Head

Van Ton-Quinlivan: Welcome to WorkforceRx with Futuro Health, where future-focused leaders in education, workforce development and healthcare explore new innovations and approaches. I’m your host, Van Ton-Quinlivan, CEO of Futuro Health.

According to a study by Deloitte, 71% of U.S. employers offer some form of tuition assistance, but it’s estimated that less than 5% of employees take advantage of it. There are several reasons for this, including low awareness of the benefit and a lack of time to take classes, but paying the upfront cost of tuition is also a factor. Well, today on WorkforceRx, we’re going to learn about a program at Charter Oak State College that seeks to lower the cost burden on employees by turning the common model of tuition reimbursement on its head.

Joining me is Dr. David Ferreira, the provost of Charter Oak, which is Connecticut’s public online college offering master’s, bachelor’s, associate’s degree and certificate programs in a number of high-demand fields, including healthcare, cybersecurity and early childhood education.

In addition to exploring Charter Oak’s new tuition disbursement model, we’ll also be learning more about the education programs it offers and its approach to stackable credentials. Thanks for joining us today, Dave.

Dr. David Ferreira: Van, great to be with you today. Thank you for having me. It’s so great to reconnect.

Van: Well, let’s set the table by getting an overview of Charter Oak State College in Connecticut and the students that you serve.

Dr. Ferreira: Yeah, Charter Oak State College has been around since 1973, so we’re actually celebrating our 50th anniversary this year, and you say, okay, well, we’re an online state college for fifty years…were we around before Al Gore invented the internet? You know, we actually started as a credit aggregator, giving credit to people for work experience and life experience.

We have kept that as part of our DNA, and then we’ve actually evolved into an online college. So, we are here for working professionals. The average age of our students is about thirty-six years old. We are a 100% online asynchronous format. We serve a very diverse student population, not only in terms of age. We had graduates last year from range from sixteen years old to seventy-six years, but also diverse in every other manner: socioeconomic status, race, ethnicity, gender.

Also, our students are very career-oriented, so we try to build our programs to say, what are the materials that they need to be connected to the career that they’re looking to go into?

Van: Dave, given the DNA and sort of the roots of your institution, what is it that you can do for working adults that perhaps may be more of a struggle for regular, more traditional institutions?

Dr. Ferreira: So, we want to actually recognize experience of a student inside and outside the classroom. As we say, what call credit for prior learning, prior learning assessment…we kind of say PLA is in our DNA. We want to meet the student where they have been, where they are and where they are going.

We actually started fifty years ago as a mechanism for primarily moms who were out of the workforce because they were raising kids. Keep in mind, this was the 1970s, and when they came back to the workforce, or were looking to, they needed to have their degree and nobody would recognize any of their life experience or where they had been. So, we actually aggregated their credits and a combination of their life experience, what they took before and then learned experiences from other areas. We actually packaged it together to award their degree.

So, that’s been part of where we were and still, we have about 30% of our students come to us with significant credit for prior learning. Actually, where we’re going is we’re starting to evolve the term credit for prior learning because what I think we should say is credit for learning. For example, if you go into an apprenticeship, how can we give you credit for the apprenticeship and work experience that you’re receiving right now, not just what you received in the past?

Van: So, this concept, while it seems so obvious to the listeners, is actually very, very hard for institutions to do because they grew up in different ways. It’s wonderful that you have the flexibility and frankly, the foundation to be able to recognize people’s prior learning. Super exciting. So, let’s turn to what you are calling your career invest tuition disbursement program. First, help us understand the rationale for taking this different approach, and then we’ll get into the details of how it works.

Dr. Ferreira: Well, I would say where this kind of formulated was I was actually going to a conference over in New York City and while I was on the Amtrak, of course I was reading this book called Workforce Rx. And as I was going through the book, in chapter four, it talked about the need to move from a tuition reimbursement model to a tuition disbursement model.

Obviously, in the book, it went into the reasons why you should do that and how it can really benefit people and you included some great case studies that you had from around the country. A light bulb went off and I said, “We need to be doing this over here and we need to make it a deal that is so good that it is a ‘win, win, win.’ We have to produce a win for the students; we have to produce a win for the employers; and obviously produce a win for the college as well.

So, as you mentioned, only five percent of employees take advantage of employer tuition benefits when you do the reimbursement model. Why is that? Well, fifty-seven percent of Americans today have less than $1,000 in their savings account. They cannot commit to a $2,000 upfront cost because it’s literally not in their bank account especially if you’re a working professional and you’re living paycheck to paycheck and obviously the cost of groceries, the cost of fuel, you know, it is very expensive right now.

Also, if you have kids going to college — we actually find this from a lot of employees — they’re like, “My kids are going to college. I’m going to prioritize my own children before I prioritize myself.”  Half of our students here at Charter Oak are parents as well. So, 61% of students who stopped out of post-secondary program want to re-enroll. But 36% say the number one barrier behind that is about cost. They don’t have the money up front.

So, we said, OK, let’s go ahead and do this program. “Career Invest” is what we’re calling it.  We looked at the rate at which the IRS gives a tax deduction, because when we hear about tuition reimbursement, they say it’s around $5,000. Why is that? Well, $5,250 is actually in the federal tax code for what the employer gets as a reimbursement for tuition and fees for when they offer that to the employee. So we said, OK, let’s do it so the price point’s clear, $5,250, because we want to actually have something that’s going to cost the employer nothing because they’ll get that tax credit on the back end.

So what Career Invest is, is an initiative where if you do an employee disbursement model, we are going to meet you at that $5,250 price tag so that an employee will charge the employer two payments of $2,625. One will cover the fall, the second one will cover spring and summer. It’s going to be an all you can consume model for the employee, so whether they take two classes, three classes — and this is at the associate, baccalaureate or master’s degree level. This is unheard of. They’re like, “What? I could take as many classes as I want?” Because when we’re talking with employers and they’re working with industry partners or collegiate partners, there’s a lot of work to be done. There’s a 10-15% discount. We’re like, it’s way too complicated. Let’s simplify this. Let’s make it that $5,250 and the employee can go ahead and consume whatever they would like of our educational offerings that can be eligible for that employer to get that tax credit.

So, no money out of pocket for the for the student, for the employee. That’s their win. No cost on the employer side because they’ll actually be the one being reimbursed as opposed to the employee having to reimburse. And then Charter Oak is going to win. Why? Well, as you show in your Workforce Rx book, it’s about twenty times more likely that a student is going to go ahead and enroll when there’s a tuition disbursement model, so we’re going to get more students.

It’s good business. It’s good for the student. It’s also ethically proper. I believe that any time you do anything ethically right, it’s also good business. So, that’s why we set it up that way and we’re really excited to be launching this.

Van: What’s your timeline for rolling this out, and do you have a sense of the level of interest out there?

Dr. Ferreira: We are actually starting to roll it out in the in the coming months. We’re currently talking with employers about this model and I’ve got to say, sometimes it can be a little bit difficult and here’s the reason why:  it’s different. It’s very different. It’s not what they’re used to. In a way, it’s also a culture change for the employer because they’re like, “Well, wait, what happens if the employee fails the class? What happens if they stop out?”  They think of the what ifs and they think about the reasons not to. And we’re like, “OK, let’s go on the one where if they fail. Think about it as a scholarship. Students who get scholarships to go to college actually do quite well. Why? Because they know if they fall below a certain GPA, they’re going to lose their scholarship.”

So, we’re trying to get employers to think about it like a scholarship you’re offering and you’re going to get the money anyways on the reimbursement side. But it is a very different dynamic and a very different culture. For some, it’s too weird of a concept and it’s not for them. But we are speaking to some where they’re like, “OK, this makes a lot of sense. We have to change the way we do things a little bit. But I get it.” And so they’re going to hopefully start to sign on very soon with this. One of the unanticipated consequences is that it’s taken a little bit of time just because you have to start to deal with the culture side of the way that employers have always done it for thirty or forty years and to change that mindset.

We’re also looking at targeted employers who maybe have that innovative mindset and are open and sayin g, “Yeah, this is the way we need to go.”  When we go to them and ask how much are you are you paying in order to recruit an employee, they’re like, it cost me about four or five thousand dollars to recruit an employee. Well, then why are you worried about a reimbursement model?  At worst, the risk to you is $2,625 because if they fail that semester, you just don’t offer it to them the following semester. If they’re failing now, think about it as a scholarship. So, it’s making that connection and trying to put it in a way in which they start to think about it.

Van: Well, it’s such a great innovation and a tool that can help an employer become much more competitive in the in the fight for talent. So many employers are now beginning to think about using the tuition supports as a recruiting tool, from Amazon to Starbucks. I mean, when you’re competing for talent, it’s got to be a way to help you stand out, and this seems like a very affordable way for the employers to do so.

Dr. Ferreira: Yeah. And the other thing we talk about with the employers is we look at it from a diversity, equity and inclusion perspective. Who is this going to benefit? This is going to disproportionately benefit the employees who cannot afford the two thousand or three thousand dollars up front to go ahead and get  arted. The way I kind of say is, let’s say you’re a hospital. All right. You have your food service workers, you have your janitorial staff, you know, who probably do not have the two thousand dollars up front to do this. These tend to be much more diverse populations.

If you identify a food service worker who has a good work ethic, why not approach them? You’re going to lose them anyways, right? They’re not going to be in food service for twenty years. I’m sorry, that’s not going to happen. You identify those employees who have that good work ethic and say, “I believe in you. I see strengths in you and we are going to invest in you.” Actually, studies have shown that when you do that, and you do that early in an employee’s career, they’re much more likely to stick around because we’re hearing from employers that they can’t retain employees.

I’ll say, “Let’s go back to the way that you onboard your employees. The traditional way to onboard an employee is to say, “Hi Van, welcome to blank, blank corporation. Just want to let you know the coffee is down the hall on the right-hand side. And by the way, you’re on probation so we can get rid of you at any period of time in the next three months.” You’re like, whoa, this is my first impression of the employer. In fact, they say that over half of the employees make the decision whether they’re going to stick with you or not within their first month on the job. Now, they may not leave for twelve months or eighteen months, but they made that decision in the first month.

So, with Career Invest, you can say,  “We’re really excited to have you here at blank, blank corporation. In fact, we’re so impressed with you. Where do you want to go with us? Where can we help you build within our company? And guess what? We have this great program called Career Invest. We’re actually going to put the money down to get you started so that you can stay here and actually build your way up while you’re here.” You’re much more likely to retain the employee when you go ahead and show that you care about them and you’re willing to invest in them from day one.

Van: So, the pricing model is very innovative, but let me also point out another area of innovation, which is unusual for a public institution, and it’s the ‘all you can eat’ consumption of courses.  I mean, that is not easy to pull off, Dave. Tell us more.

Dr. Ferreira: Well, I’ve got to give a credit to our very, very innovative chief financial officer, Mike Moriarty. We came to him and said, ”How do we price this? Do we do we limit it to five courses at the undergraduate level and four courses at the graduate level? What’s the easiest way from a human resources perspective to actually implement on our side?” He said the easiest way to do this is just have them consume it.  We’ll put the price down, we’ll zero their balance out and they sign up for what they want.

Now, we do tell employers to recommend to the employee that they take five courses per year: two in the fall, two in the spring, one in the summer. But obviously, for some employees, they can do more than that. And if so, let’s go ahead and have them do that. But we also recognize you’re working full time. It may be difficult to school go full-time, but for some they could and why restrict them on that? From a business perspective on our side, it’s actually the least human resource intensive to actually implement, so we actually found that that to be a win for us as well.

Van: How fascinating. Now, you have a bachelor’s degree in social work, which is a level of education that’s super important in the mental health and behavioral health field to produce the needed workers. What’s an experience of somebody who’s going through that program? Do they typically take three courses, five courses? Do they stop out at certain times?  Have you begun to see patterns in terms of their consumption of unlimited courses?

Dr. Ferreira: Yes. Social work was a program we just implemented in fall of 2022. We just have our second cohort getting started. We already have eighty-five students in the program. It’s doing really well. For students, it depends on their life experience, where they are in their life. All of our classes are in eight-week formats, so that’s one way in which we help accelerate. The one exception is when they are doing their practicum. We put that over fifteen weeks because for a working adult, it makes it easier over fifteen weeks to only have to dedicate seven or eight hours a week towards that practicum, whereas if we made it under eight weeks in a practicum, they’d be doing fifteen or sixteen hours which may not be suitable to the working professional population.

Again, for some students, what they might do is take one in the first half of the fall, one in the second half of the fall and then maybe mix in a practicum as well. So, they’re taking three courses in a semester. Or, let’s say if they are really looking to accelerate — they may not have a lot of life commitments outside of class — they may take two in the first half, two in the second half in that practicum and take a full five course load. That’s the beauty of it, which is wherever you are in life, that’s what you can do.

What we are noticing is that students, because you offer that acceleration model, more of them are starting to take advantage of more classes. I would say five years ago, only about twenty percent of our students were going full time. Now we’re actually close to thirty percent. We’ll probably be about one-third of our students going full time within the next couple of years. We are noticing that in a lot of ways — especially for students who are Gen Z population  — time is literally money so acceleration almost means more than the price.

Van: Let’s talk a little bit about stackable credentials. According to the Strata Education Consumer Insights Center, adults are not in the mood to pursue degrees, but they’re very interested in upskilling by taking short term courses. They’re interested in short term credentials. But there’s a tension for most higher education leaders about whether the short-term credential should be more common and how do they juxtapose with the degree offerings, which is part of the norm of traditional higher education? So, talk to us about Charter Oaks’ approach to this.

Dr. Ferreira: In higher education, we’ve always been so reliant on the baccalaureate degree. Lumina just came out with a study with Gallup that said the bachelor’s degree is still the tried-and-true method towards a family sustainable degree that also provides career flexibility, which is particularly of importance with the Gen Z population and millennial population. But with that being said, we have had an over reliance on the baccalaureate degree for a number of careers. I may be yelled at by some of my colleagues, but that is true. But I still do believe that the ultimate goal of a bachelor’s degree is a good one and one that people should pursue for many, many careers…not all of them, but a number of careers.

So, what we said is, look, especially with our career-focused student population, students want to have the ability to go into their area of study quickly, and by that I mean, within six months to a year. So, our approach to stackable credentials is this: how do we actually stack them within our baccalaureate degree?  I’ll give an example. We’re building a software development baccalaureate degree that’s going to go live in fall of 2024. The first four courses within that major is the Google IT User Support Professional Certificate, which prepares a student for the CompTIA A+ certification and that allows them to be an entry-level helpdesk worker in IT.

That means within the first one to two semesters – depends how fast you go – a student can actually go through that experience and get an industry-recognized credential and then stick around into the bachelor’s degree and still continue to get upskilled. But they at least get to be an IT help desk worker while they’re studying for their bachelor’s degree. And then, by the way, hopefully that employer is involved in Career Invest, and they don’t have to spend any money on that bachelor’s degree. It gets them into their area of study quickly, so that they’re identifying in that career field.

I’ll give an example of traditional education. I’m a product of traditional education. I was a political science major. I did nothing in that area until after four years of education. I was a bouncer and a bartender, right? Now, while being a bouncer and a bartender helps me as a provost, it did not help me as a political scientist, right? So, we really want to make sure that in as many of our programs of study as possible, that we build a pathway towards a quick credential so we build an on-ramp and an off-ramp.

Now, if a student goes ahead and becomes a help desk worker and they’re good for right now, then they’ll come back a year or later or they continue on straight through like we hope they do, that’s wonderful. But also if life gets in the way and they stop out there, they at least have an industry-recognized credential where they can at least have a better job than if they worked as maybe a bouncer or a bartender, right? Which is still a noble field… so that’s the area that we’re kind of approaching it with.

For example, in our cybersecurity program, we just recently got a grant from Tech Talent Accelerator where we’re going to have, again, the first four courses aligned to the CompTIA Security Plus certification, which is your industry-recognized credential to get entry level jobs in cybersecurity. In our marketing degree program, how do we build a Meta social media marketing micro-credential, or a Google digital marketing e-commerce certificate micro-credential. So, a student can either take that a la carte, or they can build it within their bachelor’s degree knowing that as you continue to earn these credentials, you’re going to continue to progress in your wages so that you can earn while you learn and also create a pathway to 100K. You know?

So, that’s the really big difference is how can we visually show them that it’s the start of your journey, but if you stop out, it’s okay, you’re going to continue to get better along the way.

Van: Dave, for those who have taken the Google IT and earned the CompTIA certificate, what’s the out-of-pocket for the student to get to the bachelor’s?

Dr. Ferreira: So, in essence, if they’re part of Career Invest, again, there’ll be nothing out-of-pocket for them if their employer joins on. What we’re also hoping, too, is that as we get these students here and they’re like, “Hey, I work over at blank corporation,” we can gather that data and actually approach the company and say, “Do you know that we have thirty of your employees over here at our company?” But if they’re not part of that, we also understand that.

We have a national price point for online education. Southern New Hampshire, Western Governors, National University, University of Maryland Global Campus, you know, we all have to be around that same price point. We’re $329 per credit, which is $1 less than Southern New Hampshire University — our president is big on that one — and then our fees are similar to the other national online universities.

And then one of the things we’ll be implementing in fall of ‘24  — because price is really at the critical juncture — is about the cost of textbooks and materials. We’re calling it inclusive access. That means we’re actually working right now and finalizing the deal with the vendor, where we’re going to include the cost of textbooks and software within our tuition and fees. Therefore, if you’re under financial aid, that will be covered by financial aid as well.

So we’re looking at every possible way in which we can have the least amount out-of-pocket for the employee, because as we know, the amount of student loans out there in the country is about $1.7 trillion. It exceeds credit card debt. The average student loan payment is over $400 a month for twenty years for a person who has a bachelor’s degree. A person has a mini mortgage before they can ever buy their first home. What we’re trying to say is how can we separate it where a student has little or no debt whatsoever, because if they have little or no debt whatsoever, that’s $400 more in their pocket so that they can have a nicer car, a better house, and they can afford to put food on the table and provide for their families and maybe even take a vacation.

Van: Well, the systems approach in which you’re thinking about the learner and their experience and the cost that they encounter is very impressive. So, thank you so much for your leadership on that. I hope many of our listeners are heeding the good advice that you’re imparting right now.

We previously talked about the mental and behavioral health crisis and frankly, there’s a huge demand for therapists who are trained at the master’s level and then, of course, their bachelor level occupation and then their certificates. So, the combination is really a perfect situation to create a stackable critical. And then, of course, there’s the financials so that we can better fill out this this workforce.

Dr. Ferreira: Yeah.

Van: So, I want I want to just give you an opportunity to tell us more about what you’re doing.

Dr. Ferreira:  So, as we know, I would argue mental health is at crisis level, and we’re seeing a huge need for folks in the social work and human services area at all levels. You know that. We see it. We need it in our criminal justice system. We need it over in our nursing homes. We need it with the adult and also adolescent population.

At Charter Oak, one of the things that we do is have a very open amount for elective categories. One thing I want to mention with social work is that we just achieved pre candidacy status from the Council on Social Work Education. That’s the industry accreditor for social work so they’re very strict on what can go inside the major. And so we try to say, well, how can we work around that?

So, we actually built our bachelor’s of social work where there’s enough room in the electives where if a person actually achieves a human services or an addictions certificate — where let’s say they could be a caseworker while they’re building into their baccalaureate degree — we’re able to fit that within our bachelor’s degree. Our idea is to is to identify those that maybe are looking for an entry level, human services provider type of credential and then have that build where you can still go into your bachelor’s of social work and lose no excess credits.

Van: And would you know if the accrediting body allows you to offer your program across state borders or is specific to the state of Connecticut?

Dr. Ferreira: It’s across the country. We do licensure information by state. So, for example, there are a few states where, in certain areas with the bachelor’s degree, you need to have full CSW accreditation. With the exception of those states for right now, you’re able to go ahead with our bachelor’s of social work program and actually work over in their state, for example, at Department of Children and Families or a lot of areas there.

We want to make sure that we’re doing this ethically so that within well over forty states, there are no issues whatsoever in being able to get employment with your bachelor’s of social work.

Van: Dave, some people may be wondering — but I hope that they’re wondering less since we had such a great adoption of online learning during the pandemic — how do you build in quality while honoring the need to be flexible and virtual for working adults?

Dr. Ferreira: That’s a great question. We just got done doing our updated strategic plan that actually started to implement this fall and academic quality was pillar number one. Our approach is quality by design. The way that we develop courses here at Charter Oak is actually a very intensive process. It takes like four or five months to produce a course properly. What we do is hire our subject matter experts — folks that are in the industry, have all the great credentials, very knowledgeable in the area of what’s needed of our graduates — who actually build the content of our courses. That’s what they’re good at.

Then we also have our instructional designers — these are folks whose number one thing is about online pedagogy, andragogy, universal design of learning, inclusive design principles, making sure everything is ADA compliant so that is inclusive of everybody — that is their job. They make sure that everything is aligned from a design standpoint. So, we have the subject matter who’s the expert in content, we have a designer who’s an expert in how to build it, and then also we also give another review of the content so that we have multiple perspectives, diverse perspectives on the content. After all of those things are done, then you can actually build and run that course. It takes a lot of investment to do that and I think it’s worthy that we go ahead and do it.

I would say anybody who is actually studying or who is interested in going to an online college — whether it be Charter Oak or anywhere else — ask them what is your quality assurance process? What are you actually doing? What do you actually do to ensure that you have the best quality material? We’re also not ashamed to say, where are the experts over in industry, whether it’s folks from Google or IBM or Meta or anywhere else? If they’re willing to partner with us and help us with some of that content, we are very willing to go ahead and do this.

There’s no ego involved because at the end of the day, it’s about do we teach what we need to teach so that from a technical and human skill perspective, the student is ready to go ahead and enter the workforce?  Our students are our business card so we’ve got to make sure that we produce the best quality possible because otherwise we lose the faith of the employers.

Van: Absolutely. Absolutely. Well, your institution is doing so much great work on the frontier of learning. Why don’t we close out by asking you what you’re most excited about in the future of learning?

Dr. Ferreira: What I think we’re most excited about in the future of learning is that I’m seeing more than ever employers are wanting to partner with higher education organizations. And if the higher education organization is humble enough to say, we want to work with you, there’s more employers than ever that are interested. Obviously, I know they’re desperate for workforce and I’m really excited about that.

I’m also really excited about the future of higher education and where we see it going because traditionally in higher education, we say we have workforce programs and we have liberal arts programs.  My prediction is that that those lines are quickly going to go away. I think that in the future, these are going to be like two parents and these two parents are going to go ahead and have a baby and that baby is going to have the DNA of both of those parents. I say that because what I’m hearing, for example, on cyber security is that they want students to study more psychology because a lot of cyber security hacks are social engineering, so they want students to understand psychology and human behavior in order to help prevent social engineering hacks.

Likewise on the liberal arts programs…again, I’m a political scientist and actually I was talking to our lead political science professor the other day and I said you know as a political scientist now I would actually get a technical credential in data analytics within my major. Why? Because as a political scientist I’m doing voter registration, I’m doing data mining of the voter rolls and things of that nature. If I had a good understanding of data analytics that would make me a better political scientist.

This is where I see in the future…that the technical and the liberal arts are going to come together. They’re going to be interwoven because they’re going to produce not only those great technical skills but those great human skills that are going to be aligned to produce the best possible worker.

By the way, they’re going to have the AI literacy skills so that they can effectively work in the generative AI world and that’s actually another thing that we’re quickly working on as well to make sure that every student has those. We actually just added digital literacy as one of our gen eds that includes our AI literacy skills to make sure that they go ahead and they have that. Also, our students are innovative thinkers so we’re going to have that in our gen eds as well.

Then we also have a diversity, equity, inclusion course in our gen ed requirement because employers are saying their employee base is the most diverse it’s ever been so I need employees that understand diversity not only from a cultural/race/ethnicity perspective but diversity of thought as well so that can actually communicate with those who don’t think like them or act like them. Diversity covers so many things including diversity of thought and we want to make sure that all of our graduates have those skills because that’s what our employers need and also that’s what society needs

Van: Well, I’m sure my audience is not surprised that when I first met you and heard about the work that you’ve been doing at Charter Oak State College it’s so easy to be impressed/ I’m so excited and I look forward to having Futuro Health work with you in the future and really humbled that my book had some role in inspiring some of the innovations that you’re pursuing today, Dave

Dr. Ferreira: Well actually a huge role. Actually, my entire strategic planning team actually has a copy of your book and we use that as one of our baselines. And thank you for the work that you’re doing because you are making a huge difference.

Van:  Well, likewise. Thank you very much, David, for being with us today. I’m Van Ton-Quinlivan with Futuro Health. Thanks for checking out this episode of WorkforceRx. I hope you will join us again as we continue to explore how to create a future-focused workforce in America.