Lifelong Learning Accounts (LiLAs)
Lifelong Learning Accounts (LiLAs) are an employee-owned educational savings account that helps pay for education and training expenses. It’s a new employee benefits program where regular contributions by employees are matched by the employer.
Washington was one of the first states in the country to initiate a LiLA pilot program in 2009, preceded by Maine in 2005. In both states, the accounts were able to be used not just for paying tuition, but for a range of related expenses including, but not limited to, child care, books, and admission test fees. The Council for Adult and Experiential Learning (CAEL), with funding and support from the Lumina Foundation, had also developed and championed LiLA demonstration programs in a handful of states and cities, including Maine, along with Washington, Chicago, Kansas City, San Francisco, and New York City.
In the Washington LiLA pilot, and those in a number of other states, the vast majority of workers chose to take courses that would help them advance their career with their current employer. Even so, the accounts have no restrictions on what can be studied or employee selection of career goals. This flexibility means employees can train for areas that interest them. Employers reported greater morale and lower turnover rates after they implemented LiLAs.
The successful pilot program in Washington, with support from both participating businesses and workers, led to the codification of LiLA in state statute in 2012, designed to be implemented by a network of private entities with guidance from the state. But budget shortfalls hindered an appropriation to develop the guidance resources, marketing materials, and rulemaking to implement the program statewide.
Washington’s LiLA law requires that education and career counseling be provided to each worker account holder. This is a cost that LiLA program operators may not be able to cover within the account management fee structure. Washington’s public resources, such as WorkSource Centers, community and technical colleges, community action agencies, and public libraries, should be considered to augment the availability of counseling services for their statewide reach and accessibility.
LiLA Models in the US and Overseas
Similar ideas have been proposed at the federal level, including the Lifelong Learning Accounts Act in 2008, Skills Investment Act of 2013, and the Lifelong Learning and Training Account Act of 2018. These tax-advantaged lifelong learning account proposals received bipartisan Congressional support in Washington D.C., but have yet to progress to enactment.
The Brookings Institute has also developed a LiLA model at the national level. Their economic modeling projects that 23 million workers would contribute to the accounts over a 10-year period (along with contributions from business and the federal government). Efforts would be specifically targeted towards those most in need of assistance. The proposed program is expected to produce benefits including: a better-trained workforce, retraining mid-career workers, improving unemployed workers’ ability to find new jobs, more flexibility to shift jobs or careers, and less reliance on the public safety net.
Similar programs have been enacted successfully around the world. Singapore, for example, introduced individual learning accounts for every citizen over the age of 25 for education and training programs. In 2018, approximately 431,000 Singaporeans benefited from the program, up from 285,000 the previous year. In 2015, France also instituted individual training accounts, allowing workers to pay for 24 hours of training annually over eight years, funded by a 1 percent payroll tax.
LiLA – Program Overview
LiLA – Employee Perspective
Background on LiLA Becoming a Law
Washington was the first state in the nation to formally recognize a voluntary employee benefit program that encourages workers to continue their education with assistance from their employer.
In 2012, then Governor Chris Gregoire signed into law Senate Bill 6141 creating the Lifelong Learning Program. The bill legally defines Lifelong Learning Accounts (LiLAs) which are savings accounts funded through matching employer-employee contributions and dedicated to covering the education costs of the participating employee. While Illinois legislated a pilot LiLA program and Senator Maria Cantwell has introduced LiLA legislation in Congress, the state of Washington is the first to adopt legislation recognizing LiLAs as an optional employee benefit.
The law builds on a pilot program that has operated since 2009 with employers in Thurston, Lewis, Pacific and Grays Harbor counties. The pilot was launched through the support of a grant from a national funder and private partners such as the Association of Washington Business. The bill does not provide any state funding but will make it easier for the program to secure additional private support and expand to more employers statewide.
“For Washington to remain competitive, we need creative ways to make education more affordable to working adults so they can grow their skills and knowledge. LiLAs allow employees and their employer to co-invest in their future success,” said then Gov. Chris Gregoire.
Unlike tuition reimbursement programs which are usually dedicated to improving current job-related skills, LiLAs cover the costs of education outlined in a plan developed by the employee. In addition, LiLAs provide career planning assistance to participants.
In the case of Erin Batchelor, an employee with Hanner Enterprises which operates McDonalds restaurants in Grays Harbor and Pacific counties, her Lifelong Learning Account is helping her complete an associate’s degree at Grays Harbor College with the ultimate goal of earning a business degree.
“Employees who want to succeed and move ahead in life should be supported,” said Julianne Hanner, owner of Hanner Enterprises and an early adopter of LiLA. “If that means they eventually move on to something better, that’s great. I’m honored to have played a part in their success.”
“LiLAs support the American Dream of workers being able to improve themselves and move up the career ladder, earning better wages and a better life for their families,” said Senator Derek Kilmer, prime sponsor of the bill. Representative Phyllis Kenney was sponsor of the House companion bill.
By being put into statute, LiLAs will gain greater acceptance with employers, financial institutions and private funders, making it possible to grow the program so that it is more universal and portable. More important, the law recognizes Washington’s intent to support lifelong learning strategies.
“Ideally, LiLAs would become a standard offering in employee compensation packages, making them truly portable, similar to other benefits,” explained Pamela Tate, President and CEO of the Council for Adult and Experiential Learning. “This bill in Washington can spark support at the federal, state and local levels, bringing LiLAs to scale nationally.”
The pilot LiLA program began with funding from the Council for Adult and Experiential Learning and the Lumina Foundation for Education. Additional support has come from the following program partners: Washington’s Workforce Training and Education Coordinating Board, the Association of Washington Business, the State Labor Council, the Higher Education Coordinating Board, the State Board for Community and Technical Colleges, the Department of Commerce, the Department of Financial Institutions, and the Pacific Mountain Workforce Development Council.