Tuition reimbursement: What it is and who offers it
Tuition reimbursement is an employee benefit that subsidizes the education of its beneficiary. Tuition reimbursement programs create incentives for employees to obtain credentials to perform their job better. A 2019 study found that 59% of all employers offer tuition reimbursement programs. But despite their wide availability, these programs often go unnoticed. In fact, only 2-5% of eligible employees take advantage of these benefits.
The first step to taking advantage of tuition reimbursement opportunities is to learn how they work. Read on to learn all about reimbursement programs. We’ll discuss the requirements to qualify for tuition reimbursement and how much of your tuition they may cover. We’ll also give you a rundown of major companies that offer tuition reimbursement. Finally, we’ll give you some next steps to pursue tuition reimbursement if you qualify.
Tuition reimbursement at a glance
Tuition reimbursement is an employee benefit in which an employer contributes a set amount towards the education of an employee. The tuition reimbursement amount can vary widely based on your employer and the cost of your program. Tuition reimbursement programs are becoming increasingly popular among employers.
Requirements for tuition reimbursement
Tuition reimbursement is considered an employee benefit. As a result, an employee must be eligible for benefits in order to claim tuition reimbursement. This requirement can vary by company. Some companies only offer benefits to full-time employees while others extend them to part-time employees as well.
Some companies have stricter requirements for tuition reimbursement than they do for other benefits. For example, at Chipotle, workers become eligible for benefits 30 days after they begin their employment. However, they are not eligible for tuition reimbursement until they work at least 15 hours per week for at least four months.
Field of study
Some companies offer tuition reimbursement for programs in any field of study. But others will only fund educational programs that are directly related to an employee’s career path at the company. Let’s get into how a company decides what programs to approve, and how it affects you.
Employers offer tuition reimbursement for two main reasons. First, tuition reimbursement programs create attractive benefits plans which attract a strong workforce. Secondly, tuition reimbursement plans incentivize employees to obtain qualifications which make them better at their jobs.
Companies primarily concerned with the technical training of their workforce are typically less flexible in programs they will approve. For example, they would probably not provide reimbursement for an engineer to earn a degree in literature. However, if the company offers tuition reimbursement primarily as a benefits perk, they are likely to be more flexible. They are more likely to approve tuition reimbursement that prepares an employee to take a job in another field.
Commitment to work
Some employers will require that you stay on for a set period of time after you obtain your degree. Tuition reimbursement is an investment that companies make in developing their workforce. In order to see a return on their investment, they need a guarantee that you will continue to work there. These agreements can range between months and years. If you do not fulfill your work requirement, you would be required to repay your tuition reimbursement.
How much money can I receive from tuition reimbursement programs?
There are no fixed limits on tuition reimbursement. Employers can contribute however much they want. Many employers set their limit at $5,250 per year– the maximum amount they can deduct from their taxes. However, employers who are especially motivated to train their workforce may be willing to contribute more.
Employees who receive over $5,250 per year in tuition reimbursement will have to pay taxes on the excess funds. If you receive a large reimbursement, you should prepare for a large tax bill at the end of the year.
How many companies offer tuition reimbursement
Over half of companies in America offer some form of tuition reimbursement. It’s an employee benefit that is becoming increasingly popular. So, we can only expect to see that number increase in upcoming years. Here’s a list of some major companies that offer tuition reimbursement:
- Home Depot
- Proctor & Gamble
- Wells Fargo
Tuition reimbursement will look different at each of these companies. For example, tuition reimbursement at Apple would most likely be for a degree to further a tech career. But tuition reimbursement for a cashier at Home Depot may be for a career unrelated to retail.
Also read: How to find online jobs for college students
Next steps for students
If your current employer offers tuition reimbursement, reach out to your HR department today to find out more. It’s a good idea to be proactive with tuition reimbursement. Learn what programs are supported by your employer and how much they can contribute.
If you are currently unemployed or your employer doesn’t offer tuition reimbursement, you have options. Many companies do offer reimbursement benefits. Try looking for positions at any of the companies listed above, or do your own research. Larger companies are more likely to offer tuition reimbursement, but you can try local businesses too.
Good luck securing a tuition reimbursement! Reimbursement programs are an invaluable resource in the task of paying for college. And don’t forget to look for other forms of financial assistance as well. Scholarships, federal aid, work study, and loans can all help you to pay for your education.
Does tuition reimbursement disqualify me from financial aid?
Tuition reimbursement does not disqualify you from other forms of financial aid. You are still eligible for federal, state, and institutional aid. You can also apply for private scholarships or any other form of aid.
Can I fill out the FAFSA if I get tuition reimbursement?
Yes – students who receive tuition reimbursement should also fill out the FAFSA. The FAFSA can qualify you for federal and institutional aid.
How do I apply for tuition reimbursement?
You should check your employee handbook and benefits package to learn about the application process. Typically, you can apply through your HR department.
Can I get tuition reimbursement for any field of study?
Some employers offer tuition reimbursement for any field of study. But others limit eligibility to fields of study related to the employee’s position.
Can I deduct tuition reimbursement from my taxes?
You can deduct up to $5,250 of tuition reimbursement from your taxable income per year. You’ll have to pay taxes on any reimbursement over $5,250