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What is a tuition reimbursement program? Many companies offer this benefit to employees who take college courses or earn certificates. For example, your job might pay for a few college credits per quarter or reimburse up to $3,000 a year. Understanding this often-overlooked benefit can help you invest in your professional development without paying for everything out of pocket.
What Is Tuition Reimbursement?
A tuition reimbursement program is a benefit that repays employees for educational expenses. It’s typically managed through your company’s human resources or benefits department.
Four out of ten employers offer education benefits as part of their compensation packages. If you’re planning on returning to school as an adult, these perks can be as valuable as health insurance or an extra week of vacation.
Businesses often invest in these programs to remove financial barriers and help employees improve their career prospects within the company. For example, a customer service rep who studies data science could move into a data analytics role. Or a young manager with a knack for negotiation could earn a Master of Business Administration and climb to an executive position.
How Does Tuition Reimbursement Work in Practice?
Getting repaid for your tuition costs isn’t as simple as showing your employer your report card and saying, “Check, please.” Most companies have a few boxes to check before you get reimbursed.
Before you start researching degree programs, check if you’re eligible for tuition reimbursement. Some businesses require you to work full-time or be on staff for a set time, like six months or a year, before you can claim it.
Once you qualify, you’ll probably need to apply for this benefit. This could be a simple form for HR, or you might need to explain how your education will help your company.
Then comes the fun part: taking classes. Most employee benefits cover online and traditional in-person courses, but double-check with HR to make sure your chosen format is covered.
When exactly you get repaid depends on the type of program. Tuition assistance means you (or the college) gets paid before you step into the classroom, while reimbursement happens at the end of the semester. Either way, you’ll need to submit proof that you completed the courses, such as a report card or a letter from the registrar.
Common Eligibility Requirements You’ll Encounter
Tuition reimbursement usually comes with a few strings attached, but it’s not as complicated as health insurance. Many companies have rules, such as:
- Covering tuition for full-time workers only
- Limiting reimbursement to courses related to your job
- Requiring pre-approval before you apply to the college
- Only reimbursing courses if you earn a minimum grade, such as a 3.0 GPA or a B or higher
- Paying tuition directly to the school at the beginning of the semester, or cutting you a check at the end
- Only paying for community college costs, not four-year schools
- Requiring employees to remain with the company for a certain period (often a year or so) after getting reimbursed
- Mandating that programs meet certain accreditation and university compliance standards
For instance, Walmart only pays for a handful of degrees directly related to the company. So employees can earn a bachelor’s in computer science or supply chain management, but not art history. Other businesses may only cover certain colleges and universities.
Read the fine print to make sure you understand your company’s limitations. That will prevent expensive misunderstandings, such as accidentally paying for classes that you can’t get reimbursed for due to a technicality.
The Step-by-Step Process for Getting Approved
Some companies boast about their tuition programs, while others bury them at the back of their employee handbook. Here’s what you need to do to get your expenses covered:
- Research your company’s reimbursement policies: Do more than ask HR what is the tuition reimbursement plan. Take the time to read the handbook or company website carefully. Pay close attention to eligibility requirements and any rules about staying with the company after you get reimbursed.
- Talk to HR: Reach out to a benefits specialist to confirm you qualify and ask questions. You could also ask them to connect you with colleagues who have used the benefit so you can ask about their experience.
- Fill out paperwork and get approved: Apply for the employee education program a few months before the semester starts. That way, you won’t have to worry about missing enrollment deadlines while your application is buried on a manager’s desk.
- Enroll in your degree program: Fill out the college’s application and speak with an academic advisor to see if you can earn continuing education credits. For example, a salesperson who pitches clients daily might qualify for a public speaking credit.
- Submit proof of enrollment or completion: Turn in paperwork at the beginning or end of the semester for reimbursement.
Companies Known for Strong Tuition Reimbursement Programs
Plenty of companies cover tuition costs, but some go the extra mile to support their employees’ higher education dreams.
For example, Amazon offers prepaid tuition and reimbursement for books and fees. Full-time and part-time employees can enroll in almost any degree programs from CityU of Seattle, with up to 40 credits per year covered by Amazon.
Deloitte is another company with excellent higher education benefits. It offers tuition benefits for college courses and even pays employees half their salary if they take time off to study.
FIND THE RIGHT PROGRAM FOR YOU
What If Your Employer Doesn’t Have a Program?
Don’t give up if your company doesn’t offer tuition reimbursement now. Some employers, especially small businesses, may be willing to build a program if you ask. Or they might pay for part of your tuition, even if they can’t afford the entire cost.
Boost your chances of success by explaining how your studies will help the entire organization. If you’re a medical professional, for instance, learning Spanish can help you communicate with more patients. Or a business analyst might study data science to make smarter decisions.
And don’t forget about other sources of financial aid. You might qualify for scholarships or student loans, which can help bridge the gap between your expenses and any money your employer kicks in.
Costs, Caps, and Tax Implications To Know
While many employers are quite generous, it’s not a free-for-all. Expect a yearly limit, such as $4,000 a year or one class per semester. Your reimbursement may also be conditional on your grades.
Taxes are another huge factor. The Internal Revenue Service (IRS) only lets employers pay for direct educational expenses, such as equipment and tuition. That means your daycare bill and parking fees don’t count. The IRS also limits educational assistance programs to $5,250 per employee, tax-free. If your company reimburses more than that, it will get taxed as wages.
How CityU Supports Students Using Tuition Reimbursement
CityU works directly with employers’ HR departments to coordinate tuition reimbursement at a job. We’ll help you make sure that you meet your company’s requirements and provide enrollment verification.
Plus, CityU’s flexible programs are designed with working professionals in mind. Online and hybrid options let you learn on your schedule, so you can fit your coursework around your job — and make sure your employer keeps approving your reimbursement.
CityU also offers student support services, including enrollment advising and tutoring, to set you up for success. And if you decide to take your new skills onto the job market, the career services team can assist with everything from networking to formatting your resume.
Learn more about CityU’s accessible financial aid options today.
FAQs About Tuition Reimbursement
How does tuition reimbursement usually work?
Most employers ask you to apply for tuition reimbursement before enrolling in a program. If you meet their eligibility requirements, they’ll cover your tuition costs before or after the semester. For example, a student who takes two courses in the fall quarter might get reimbursed for $2,500 by their company.
Does tuition reimbursement cover online degrees?
Yes, many education assistance programs cover online and hybrid courses. This varies by employer, though, so study your company’s policies carefully.
How much tuition reimbursement can you get?
It depends on your company. Some companies cap their payments at only a few thousand dollars a year or a couple of courses. But top employers are more generous — like Adobe, which offers up to $10,000 a year in education benefits.
Is tuition reimbursement taxable?
The IRS lets you receive up to $5,250 a year in education benefits tax-free. After that, you’ll get taxed on your reimbursement as part of your wages. But don’t let that deter you. Free money is still a win, especially if it helps you avoid taking out student loans.
