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Lifelong Learning Accounts Target Incumbent Worker Training

Tuition reimbursement programs enable companies to target an area that Washington often overlooks—training for people who already have jobs.

December 6, 2007
Related Topics: Career Development, Employee Career Development, Workforce Planning
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Tuition reimbursement programs enable companies to target an area that Washington often overlooks—training for people who already have jobs.

    Legislation that addresses the unemployed or future workers—like education policy—tends to spur congressional action.

    The tide may be turning slightly with the introduction of measures in the Senate and House that would fund training in a way similar to how 401(k) accounts finance retirement. The bills would set up "lifelong learning account" demonstration projects for up to 200,000 workers in up to 10 states.

    Participants can earn a refundable tax credit for annual contributions up to $500 into the plan. Employers receive favorable tax treatment for matching up to $500. A third party, like a foundation, also can contribute.

    The lifelong learning account funds can be used to pay for tuition, fees, books and supplies. Career counseling is available. The funds also are portable from job to job.

    Amy Sherman, associate vice president of the Council for Adult and Experiential Learning, says that working adults find little support for going back to school, unlike the efforts made on behalf of the unemployed.

    "We don’t see the same kind of investment in incumbent workers," she says.

    In writing the House version of the bill, Rep. Tom Allen, D-Maine, is responding to people in his district who have a job but are afraid of losing it because of global economic competition.

    "This is a world that causes a lot of anxiety for my constituents," he says. "The way to compensate for that risk is to increase the security in their own skills."

    A workforce official in Allen’s state says the learning funds can be used to leverage development efforts at federal one-stop employment centers. That system lacks the money to adequately fund its infrastructure, let alone job training.

    "This is about financing the future," says John Dorrer, division director in the Maine Department of Labor. "We have a moral, ethical and economic obligation to make this happen."

    In some areas of the country, the accounts already are a reality. In advance of national legislation, demonstration projects were established in different economic sectors—manufacturing in northeast Indiana, restaurants in Chicago and health care in San Francisco.

    At the University of California San Francisco Medical Center, 35 employees set up lifelong learning accounts. Each worked at least 20 hours weekly and made less than $60,000.

    They used the educational assistance to gain credentials to move up to jobs like medical technician, lab assistant and registered nurse.

    One of the reasons the accounts work is because employees have to invest in themselves, says Jennifer Hermann, director of workforce planning at the facility.

    "When employees contribute a little bit of their own money, they tend to follow through [and] finish the program," she says.

    Participants also appreciate that they’re getting help from their employer to develop their skills.

    "The employees came to me and said, ‘Thank you. It shows you care about us,’ " Hermann says. "That’s going to give us employee engagement in the future."

Recent Articles by Mark Schoeff Jr.

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