Tuition Reimbursement Programs

When pursuing higher education, the number one question tends to be: How will I pay for it? There's no doubt that the cost of colleges and universities has increased over the years. In fact, the National Center for Educational Statistics shows that the average cost of a public 4-year institution rose from $11,993 in 2015 to $19,488 in 2020.

While there are some resources available to students such as grants and student loans, not all students qualify and sometimes even these options are not enough to cover tuition, textbooks and other related costs.

Some employers offer their employees education benefits to help pay for accredited certificate and degree-granting programs. The two most common ones are called:

• Employer tuition assistance
• Employer tuition reimbursement

Employer tuition assistance and employee tuition reimbursement programs offer a unique way of working toward your desired certificate or degree while not having to worry as much about how you'll pay for it. Education reimbursement programs fall under employee benefits for companies that offer these types of programs. You might be surprised by the companies that offer employee tuition reimbursement programs, in fact, you might already be working for one!

What Is Tuition Reimbursement?

Part of the reason so many employers offer educational benefits to their employees is because under the Tax Revenue Code, employers are able to provide each employee with up to $5,250 per calendar year in tax-free employee benefits. These employer tuition reimbursement programs can vary in terms of range and impact from company to company; however, the bottom line is that tuition reimbursement programs can help pay for accredited college and university programs. Offering these types of benefits may also help with employee morale, retention and overall company relations as it shows that the employer supports the growth and wellbeing of its employees.

How Does Tuition Reimbursement Work?

Most commonly you'll find that employers offer some kind of tuition assistance or tuition reimbursement program. Most employer tuition assistance is paid up front while the employer tuition reimbursement is processed after the course, or courses have been completed. The most common conditions of employee tuition reimbursement or tuition assistance programs include:

• Being employed by a company that offers such programs while staying in good standing as an employee
• Working a minimum of 15 - 20 hours per week in order to qualify as a part-time employee; most full-time and management employees qualify immediately
• Maintaining good-standing in your chosen degree or certificate granting program
• Remaining employed at the company throughout the duration of the time you spend applying your tuition benefits to your qualifying courses and expenses

The conditions and criteria vary from company to company and it's always best to check in with your employer for specific questions.

Why Should You Consider a Tuition Reimbursement Program?

Education benefits can be a huge help in a journey toward higher education. Tuition reimbursement programs can allow you to keep working your current job without having to change your day-to-day schedule. Some employers have specific relationships with online universities that allow you to craft your school schedule around your work schedule. This can also give you the added freedom of bringing the classroom with you wherever you have internet access. Tuition reimbursement and tuition assistance programs are also tax free which may be an added benefit to both employees and employers.

Online Colleges Are Great Options for Tuition Reimbursement Programs

If your employer offers tuition reimbursement or tuition assistance as a benefit, online colleges might be an especially great option to since your "campus" and classes can be wherever you have internet access. You may not need to dash to a physical campus to hear a lecture or connect with classmates about an assignment. This can be an especially helpful option for managers and supervisors who may want to pursue a degree but are currently working full-time. Some employers, such as Starbucks, work directly with online universities to create unique partnerships that benefit their employees with degree-granting programs that work for everyone involved.

Companies That Are Providing Tuition Assistance or Reimbursement Programs

You might be surprised to learn that so many companies offer employer tuition reimbursement programs. Here's a list of 10 nationwide employers that offer this benefit.

Federal Employee Education and Assistance Fund (FEEA)

The Federal Employee Education and Assistance Fund, or FEEA, is an independent nonprofit organization founded in 1986, geared toward providing financial support and scholarships to federal employees. This federal employee tuition assistance program is also the only organization of its kind, seeking to provide government workers with emergency funds and scholarships to support their path toward higher education. The Federal Employee Education and Assistance Fund provides a number of programs that help eligible federal employees with scholarships ranging from $1,000 to $5,000.

Some of these scholarships are even offered to the children and/or grandchildren of eligible federal employees. Be sure to visit their website for more information on these resources.

What to Do If Your Employer Does Not Offer a Tuition Reimbursement Program

If you find yourself working for an employer who does not currently provide some kind of tuition reimbursement, or tuition assistance program, consider talking to them about it. Employers can actually benefit from these types of programs since according to section 127 of the US Internal Revenue code, employers are allowed to deduct up to $5,250 per year, in tuition reimbursement for college courses for each employee. Businesses of any size can utilize section 127 to provide tax-deductible tuition benefits to their employees. You might consider working with your employer to create a pilot program that could be performance based, kind of like a bonus. Programs like these can ultimately be mutually beneficial and could even lead to increased employee retention and better workplace performance.