The Basics of Employer Tuition Reimbursement
Employer tuition assistance programs can help jumpstart careers by reducing education costs and creating new opportunities. Many companies now offer these benefits to attract and retain talent, making them a key part of competitive job offers. Curious about what these programs include? Here’s a quick overview.
How Can Tuition Assistance and Tuition Reimbursement Programs Differ?
Different employers have varying rules, requirements, and corporate cultures, which also reflect in their approaches to developing their workforce. Some employers may offer tuition assistance after a specific duration of employment, typically 12 months or more, and may only cover courses directly relevant to your job responsibilities. Conversely, other companies might cover any course you choose, irrespective of its relation to your current position, or provide support for certification programs offered by professional institutes rather than colleges.
Other Common Parameters Include:
Staying with the company after completion: They helped pay for your education in hopes to decrease turnover and develop their workforce. Some companies require you to stay for a predetermined period of time after you’ve finished your courses or they’ll ask you to pay them back.
Receiving a certain grade: Some companies don’t pay up front, but reimburse you once you’ve completed the course. This form is commonly referred to as tuition reimbursement. Some may even tie the rate of reimbursement to the grade you earned (i.e., 100% reimbursement for an A; 80% reimbursement for a B, etc.).
Requiring preapproval: Many employers will require you to get approval for the tuition assistance they offer before you register for the class. Whether they are paying for the course upfront or offering tuition reimbursement, it’s good to know the policy before you commit to the courses.
Student loan repayment reimbursement: Some employers may offer assistance in repaying your outstanding student loan debt. With this benefit, your employer will reimburse you for payments made toward your student loans. If your employer offers this benefit, ask for details on their specific policy so you know what documentation you’ll need to provide.
You may be required to pay out-of-pocket: Many employers will only reimburse you for the amount you paid out-of-pocket, not the amount you paid with your financial aid funds. Make sure you understand your tuition reimbursement benefit guidelines and have a discussion with Human Resources.
Will Tuition Assistance or Tuition Reimbursement Affect My Financial Aid?
If your employer offers tuition assistance, it could impact your eligibility for need-based financial aid, as it may be viewed as gift-aid. For clear guidance on combining financial aid with employer-provided tuition support, it's recommended to consult your school's financial aid office.
Will Tuition Assistance or Tuition Reimbursement from Count as Income on My Taxes?
There is a limit on how much employer-paid tuition assistance you’re allowed each calendar year before it affects your taxable gross income (regardless of whether or not you changed employers during the year). This amount is regulated by the IRS and subject to change. Contact your financial aid office, tax preparer, or the IRS website for the most up-to-date information.
