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Working while attending school can be a juggling act, but it can also mean that you could save money on tuition. Many employers offer tuition reimbursement up to a certain dollar amount, meaning they will reimburse costs after an employee has completed a course. Not all companies offer this perk, and those that do may have specific requirements to qualify. But for students, exploring this potential benefit is well worthwhile.
Tuition reimbursement programs are a win-win for employers and employees. Employers can invest in developing their workforce and improving retention while also enjoying a tax benefit (up to $5,250 per employee is tax deductible). Employees can further their education and build credentials, upping their earning potential. Doing so at a reduced cost– or no cost at all– is an obvious bonus.
How does tuition reimbursement work?
In most cases, tuition reimbursement works as it sounds: A company reimburses a worker for classes after the employee has paid for the course. As the student, you’ll need to pay for your tuition and fees upfront. Once the semester or your course is complete, you’ll send a receipt to your employer, and your employer will send a full or partial payment to you. However, the logistics of this process depend on the company, so speak to your HR department before registering for classes to ensure that you know what to expect in advance.
Some employers may build a relationship with partner universities where billing is handled upfront. This is often referred to as a “tuition assistance” benefit. Student loan assistance is another education-related benefit that employers offer; both tuition assistance and student loan assistance function differently from tuition reimbursement, but these programs can be equally helpful.
What are the requirements for tuition reimbursement?
Each company has its own rules for tuition reimbursement. For instance, some programs will reimburse you only if you attend certain colleges or universities, while others will send a payment for specific courses related to your job function. Others might cover your full course load, and some might even cover books and supplies.
Additionally, there may be stipulations around your employment at the company. For one, you may need to have some tenure with your employer to qualify at all. Some employers only offer tuition reimbursement to full-time employees. And if you leave the company shortly after receiving the tuition reimbursement, you may be required to pay back a portion of that reimbursement.
Does tuition reimbursement affect financial aid?
Even though your employer is covering some tuition costs, you might still want to complete the Free Application for Federal Student Aid (FAFSA). Most employer tuition reimbursement programs don’t cover the full cost of attendance, so you may need to rely on financial aid through scholarships, grants and, in some cases, student loans.
Even though a portion of tuition reimbursement is not considered taxable income, it could count as gift aid on your FAFSA; this could lessen how much you receive in need-based aid. If you’re planning to use a combination of financial aid and tuition reimbursement from your employer, talk to your school about how to qualify for and receive both.
How do I request employee tuition reimbursement?
If you’re interested in going back to school, the first thing to do is ask your HR department if a tuition reimbursement program exists. If one doesn’t, you might be the one to help develop and facilitate a program.
If your job already has tuition reimbursement, talk to HR about enrolling in the program. Some companies might request that employees work at the company for a set amount of months or years before taking advantage of this benefit, so you’ll need to make sure that you qualify.
Read your policy thoroughly to ensure that you understand everything the plan entails before enrolling. For instance, if you’re taking a course that your employer doesn’t cover, you’ll need to prepare to pay for that course out of pocket. You should also find out when you can expect reimbursement for your classes and how that reimbursement will be paid — whether in a one-time payment or in installments.
What happens to your tuition reimbursement if you leave the company?
If you plan to leave the company for another job shortly after completing your courses, you might have to pay back what the company paid you for tuition. You’ll need to review your tuition reimbursement terms and the contract you signed with your employer to see the fine details. Some might require you to stay with the company for a set amount of months or years upon course completion.
The exception here is if you are laid off from the company. In this case, you likely won’t have to repay your tuition benefit.
Tuition reimbursement is a fantastic benefit to explore if your employer offers it. Though pursuing tuition reimbursement will likely cost you on the front end, you can benefit from continuing education at (what will ultimately be) your employer’s expense. To get started, check with your employer’s human resources department to inquire about education-related benefits. Ask about whether tuition reimbursement is available, and if so, whether any limitations apply.