What is Tuition Reimbursement and How do you Get It?
With the costs of going to college continuing to rise, and the total amount of tuition and fees becoming a greater burden for prospective and current students, the idea of any type of tuition reimbursement plan seems to be too good to pass up. So lets’ get talking about not only what it is, but how do you get your hands on the money.
First, it is important to know there is no such thing as a free lunch, so tuition reimbursement is not free money. It is a benefit many employers offer to their employees, so you need to be employed by a company that offers it. There are a number of requirements set forth, which differ from company to company, so you need to go to your HR department to find out exactly what is expected of you.
In most companies, you will be expected to declare a specific course of study you will be pursuing that is related to your current or future job responsibilities. Taking classes in Skywriting as a customer service rep is not likely something the company will reimburse you for (unless it is one of those electives you can choose to get your degree). Businesses almost always approve the pursuit of a Business degree since that seems very natural.
The type of degree or course of completion you pursue is generally not a critical factor. Many people think of tuition reimbursement as a college thing, but you can also get it for supplemental training or education classes that, once again, are directly related to your specific present or future job responsibilities. Seeking a 2 year Associate’s degree is just as likely to be paid for as a 4 year degree or even a Master’s degree. Be sure to check though because anything beyond a 4 year degree may not qualify for reimbursement.
Often there is a grade requirement, meaning you can’t just take classes and not get serious about graduating – sooner than later. The requirement varies, but you should expect to maintain a minimum of a 2.0 GPA on a scale of 4 to get reimbursed. If you are going for a certificate or non-degree course of study, simply completing the requirements will qualify you for the cash.
If you forgot the word “reimbursement” in all this excitement, it’s time to bring you back to earth. You generally will have to pay the school, complete the semester or training period, and then submit your request for reimbursement to the company. You didn’t think you would get away without any paperwork, did you? Some schools may work with the company and allow you to complete a semester without paying up front, but that is why the grade requirements were mentioned prior to this whole reimbursement deal.
The company is not necessarily being nice to you with this while tuition reimbursement thing. There is something in it for them too. The Tax Man allows companies to deduct $5250 annually per employee for the purpose of education and training. That means if you manage to get into Harvard part time, your entire cost of tuition won’t be reimbursed. The basic math is, if you take a full time schedule at 36 credit hours per year, the cost per course will be $146. Part time students who take half that course load will be looking at $292 average. If your company goes above that $5250 maximum, they will be taxed on it. So if you see a bigger maximum from HR, it probably means they really are being nice to you.
Beyond simply the bottom line, companies are always looking for ways to retain older employees and hire quality new employees, and one way to get them to stick around is by using tuition reimbursement. They should get a higher caliber of employee with the education, and if they get the employee early after high school, they can count on at least a 4 year stint with the company. Maybe it’s like a drug employers give to employees, but if an employee leaves they better make sure their future company has an equally good tuition reimbursement policy.
Putting things into perspective, if you are working for a company (or will be soon) and they have a tuition reimbursement policy, ask yourself why you wouldn’t take advantage of it. You can make money at your job and have the company pick up (most of) the tab for as many as 4 years of school. You aren’t obligated to graduate to get the money, and it is a much better choice than depending on scholarships, which may change their requirements from year to year, or taking out those soul crushing student loans. It basically is a win-win for everyone.