💡 The Frank Takeaways:
- What is tuition reimbursement?
- How does tuition reimbursement work?
- Can you get tuition reimbursement and financial aid?
Tuition reimbursement is a common employee benefit that helps employers invest in their workforce. Let’s take a look at what it is and how it works.
What is Tuition Reimbursement?
Tuition reimbursement is a contractual agreement between an employer and employee in which a company agrees to help pay for an employee to further their education. Companies offer these programs to encourage employee loyalty and to invest in their future at the company.
Why Do Companies Offer Tuition Reimbursement?
There are two primary reasons why companies will offer tuition reimbursement.
Firstly, tuition reimbursement helps companies hire and retain employees, which reduces their overall retention costs. More importantly, it allows them to develop the talent they already have on their team.
According to Ed Assist, tuition assistance helped 90% of participants develop skills they needed to grow in their current company. It’s essentially a tax-friendly way for employers to invest in their employees and the future workforce.
How Does Tuition Reimbursement Work?
While each company will have its own tuition reimbursement system, there are some common features.
Most smaller companies offer to pay for classes that are related to an employee’s current occupation. For example, a finance company may pay for an employee to earn their CFA certification but not to get a Masters’s in Art History.
The common exception to this standard is when big, national chains offer tuition reimbursement. They’ll frequently use tuition reimbursement as an incentive to help hard-working employees advance to better positions.
When will I get my tuition money?
For the most part, companies will only reimburse your tuition upon completion of the course. You will either need to pay your tuition out of pocket or take out a loan — and then the company will reimburse them based on the repayment structure.
Some companies require that you achieve a certain grade in the course before reimbursing you for your tuition costs. In rarer cases, companies will pay your tuition bill on your behalf, with the agreement that you are to reimburse them if you fail to pass your course.
How much can I receive?
There is no fixed limit on how much you can receive from your employer, although some will cap tuition reimbursement at $5,250. You will have to pay taxes on anything you receive beyond that amount.
Can You Get Tuition Reimbursement and Financial Aid?
Receiving tuition reimbursement from your employer does not prohibit you from filing your FAFSA® for additional federal aid. You may still qualify for federal loans, grants, and other scholarships to help you pay for your education.
You will have to indicate the amount you are receiving in tuition reimbursement on your application and may receive a lesser financial aid offer as a result.
How Do I Apply For Tuition Reimbursement?
Each company has a different process. You’ll want to reach out to your Human Resources department to understand how tuition reimbursement works and what is required to get started.
What Companies Offer Tuition Reimbursement?
Many major companies offer tuition reimbursement programs, including:
The best way to find out if your company offers tuition reimbursement is to contact your manager or human resources. Even if your company doesn’t have a program in place, they may be willing to assist you if it’s a mutually beneficial arrangement.