Whether you’re already working full-time or are seeking summer or part-time employment, there’s a chance your employer may offer a perk that can help you pay for college. Tuition reimbursement, or tuition assistance, is a contractual arrangement between employer and employee that outlines terms under which the employer may pay for a portion of an employee’s continuing education.
How does tuition reimbursement work?
To help retain and develop top talent, some companies – especially larger ones – offer employees tuition reimbursement on top of their regular wages. The IRS allows your employer to deduct the expense (up to $5,250 per year), and the amount is not considered taxable income. Typically, tuition reimbursement programs that qualify for tax-exempt status cover undergraduate education.
If your employer offers this benefit, it may be contingent on requirements including:
- Maintenance of a minimum GPA
- Enrollment in courses relevant to your work
- A guarantee of continued employment for a predetermined period
Will tuition assistance pay for courses up front?
The details about what is covered and when payment is made vary by employer. But typically, tuition assistance programs require you to pay for your classes up front and when you show proof you have completed the courses and met requirements, like achieving a specific GPA, you are reimbursed.
What courses do employers consider work-related?
Some companies will pay only for classes that fit an employee’s current job description. Others are more concerned with professional development – helping an employee build skills that will prepare him or her for a future role, such as a managerial position. To learn what your employer covers, talk with your human resources representative.
What companies offer tuition reimbursement?
Larger, more established businesses are most likely to offer employees this benefit, so don’t be surprised if a start-up or small company can’t provide it or can offer only minimal assistance. Some employers will be willing to pay for lower-cost online programs while others will encourage and help pay for a program through which you can take on-campus classes at night. Apple, Disney, Google and Chase all offer very generous tuition reimbursement. But a 2014 survey conducted by The Society for Human Resource Management showed that 54 percent of companies offered tuition assistance programs in some form. Some businesses even offer tuition assistance for employees’ children.
Don’t be afraid to ask!
The worst thing a current or potential employer can say is “no” when it comes to tuition reimbursement, so take the opportunity to ask. If your employer offers something – whether it’s a little or a lot – it may be buried in your contract rather than something the company openly advertises. Or your employer may be willing to work with you, offering assistance if you take a minimal course load – one or two classes at a time.
Working for a company willing to help you pay for college can set you up to face the future with significantly less debt. For the portion you have to pay, learn more about your loan options.