What You Need to Know About Tuition Reimbursement
If you’ve always wanted to go back to college, but aren’t sure how you’d pay for it or are afraid of accumulating student loan debt, your employer may be able to help. It’s called tuition reimbursement – and many companies offer it to employees as an added perk of the job.
Basically, tuition reimbursement, or tuition assistance, means that your employer will help foot the bill to for your continuing education courses or degree, given that you meet their predetermined guidelines.
Tuition reimbursement is usually offered on top of your regular salary and is a great employee benefit, offered in addition to things like health insurance, a 401(k) plan, vacation days, or a subsidized childcare center.
But before you enroll in the competitive master’s degree program of your dreams, be sure to learn all the requirements and qualifications of your employer’s tuition reimbursement program. After all, you don’t want to be left footing the bill – and busting your budget in the process.
How Does It Work?
Tuition reimbursement can help you pay for your continuing education courses or degree. Keep in mind that you'll have to pay for your classes up front. Then, once you’ve completed them, met the requirements, and submitted all the information to your employer, they’ll reimburse the funds.
It's worth noting that some companies will only pay for courses or degrees in a certain field, while others are more flexible and will pay for continuing education that supports an employee’s professional growth.
You may wonder why your employer offers a perk like tuition assistance. After all, it can be a costly expense. But as it turns out, it’s one your employer can deduct with the IRS – up to $5,250 annually, which they can deduct, and isn't treated as taxable income for you. In short, this is one perk that doesn’t cost your company much.
What Are the Requirements?
Requirements for tuition assistance vary by company. Generally speaking, you’ll have to maintain a certain GPA, though some companies reimburse on a sliding scale based on the grade you receive. For example, an ‘A’ might get 100 percent reimbursement, while a ‘B’ might be 80 percent.
You may also be required to take courses or obtain a degree that relates to your field, thus benefitting your company. Many companies also have a cap on the amount of tuition reimbursement they can dole out, so cost will likely be a factor.
You also may be required to stay at your company for a set number of years after tuition assistance is provided. This is an important fact to keep in mind. If you leave your company before the set period of time, you may be required to repay the funds, which could cost you big. Talk to your HR representative about your company’s reimbursement program before you enroll to be sure you know all the relevant details.
If your employer doesn’t offer tuition reimbursement but you’d like to try to convince them to change their mind, you may be required to submit a proposal outlining why continuing education will benefit both you – and your company.
Budgeting for Classes on Your Own
It’s important to keep in mind that tuition reimbursement will likely only cover part of the cost of returning to school. That’s why it’s important to budget for tuition and other related expenses on your own, as well.
Save up funds by setting up a monthly budget and sticking to it. Or cut unnecessary costs, like cable television or happy hours with friends. You may also consider setting up a temporary side gig to help raise the funds or even moving your money to a savings account with a higher interest rate.
You could also rent out a room in your home using a rental site like Airbnb, or consider a cheaper rental if you currently rent an apartment. Cooking instead of eating out is another huge money saver.
A Worthy Investment
Still on the fence about pursuing your employer’s tuition reimbursement program? Consider the facts: the employment rate for 25 to 34 year-olds with a bachelor’s degree or higher was 86 percent in 2017, while those with only a high school education had an employment rate of 72 percent, according to information from the National Center for Education Statistics.
Especially when you consider the rising costs of a college education, it’s a wise financial move to take advantage of your company’s tuition reimbursement program. After all, continuing your education is one investment that’s well worth it.