Hastings High SchoolISD #200

What is Tuition Reimbursement?

Just as it sounds, tuition reimbursement is something that many employers offer as a way to pay back employees for education expenses. Those who choose to participate still have to pay out of pocket for the courses they take. When the course is over, the employee can get back some or all of the tuition expenses. At some institutions, students with financial constraints may qualify to defer payment until their coursework is complete.

Some employers choose to go above and beyond tuition alone, and reimburse other expenses associated with higher education. The program my company offers not only covers my tuition, but also covers the cost of my books and my Internet connection, as long as I can prove that at least one course I am enrolled in is online or “web-assisted,” meaning some coursework takes place over the web.

Is There a Catch?

Depending on the employer, conditions for reimbursement may apply. Luckily, dealing with tuition reimbursement guidelines is not quite as difficult as dealing with an insurance company or trying to redeem a store rebate. Most often, the conditions are easy to satisfy.

Condition 1: Program of Study
The first condition that may hinder eligibility is course of study. Many employers require that the courses, or degree sought, be applicable within the company paying the reimbursement. For example, if the company is a consulting firm, potential courses or degree-related material could be very broad. Conversely, if it’s a small IT firm that offers the reimbursement, then specific IT-related courses may be the only ones that are eligible for reimbursement.

Condition 2: Cost
The second condition is the level of cost that the company will take on. Most employers offering tuition reimbursement have an annual cap on what they’ll cover. While this limit varies greatly from company to company, it does serve a purpose and you’ll want to know it before you make a commitment. First, putting a cap on reimbursement ensures that students are not scamming their employers. Though this scenario is unlikely, due to the volume of checks and balances most employers have in place, employers tend to not take any chances. Secondly, it meets tax filing requirements for the employer. The IRS allows only $5,250 per year to be written off by an employer for an employee’s education costs, so anything above that amount will imply additional tax expenses for the employer.

Condition 3: Grade Point
My employer’s tuition reimbursement plan, up until a few years ago, had scaled grade requirements for compensation returns on courses. I do not remember the exact scale, but I do recall that an “A” grade received full reimbursement, a “B” grade was somewhere in the neighborhood of 80–85%, a “C” grade would garner 70–75%, and anything below a “C” was not eligible. Many employers adopt the same policy, and reimburse on a similar scale. My employer has since changed the policy, now reimbursing 100% on all “C” or better grades.

What Does the Employer Get by Offering Tuition Reimbursement Benefits?

1. Smarter Employees
It may sound silly, but an intelligent workforce is pretty hard to come by. Employees who take advantage of tuition reimbursement tend to stay with the company longer. In addition to improved employee retention, the employer may have more employees who are easily promotable, saving them money on recruiting new employees.

2. Tax Breaks
Up to that $5,250 annual maximum, your employer’s reimbursement program costs are tax-deductible. Essentially, after the tax benefit, your employer pays very little to offer you this perk. Since the costs balance out and the company reaps the benefits of a smarter workforce, it’s a highly-desirable win-win scenario for the company.

If you’re wondering which companies offer tuition reimbursement, FatWallet has a fairly comprehensive list you can check out.

Final Word

By taking advantage of my tuition reimbursement plan, I don’t need to worry about applying for college scholarships and paying back student loans. In fact, I actually make money. Sure, I have a few up-front costs, but I get all of my tuition, the cost of my books, and even my Internet costs back, provided that I take a web-based or web-assisted class. Most courses meet that requirement nowadays, so it’s not hard at all to fulfill. Even Apple offers free online courses from various colleges and schools through it’s iTunes U program. I would have been paying for the Internet anyway, and the books can be resold upon completion of the course on sites like Amazon or eBay, leaving me just a bit ahead.

If your employer offers this benefit, there really is no reason not to take advantage. Even if you take only one or two classes at a time, you are still enriching your own life while someone else foots the bill. What could be better? I will certainly continue to collect my tuition reimbursement, and hope that I am able to stay with my current employer until my degree program is complete. Maybe even longer, if all goes well.

15 Companies Offering Tuition Reimbursement as a Benefit

From fast food chains to telecommunications companies to banks, these are some of the top companies that pay workers' education costs.

AT&T 
As part of its benefits package, AT&T offers tuition assistance — employees must meet certain eligibility requirements to get the reimbursement, and the costs must be approved by the company.

Anthem, Inc.
Employees at this health benefits company are eligible for up to $5,000 a year in reimbursement for tuition and textbooks.

BP
At this oil giant, there are many requirements for eligibility, but tuition reimbursement is a generous 90 percent of the costs of tuition, fees, and books. Among other requirements, employees must get approval for the classes in advance of registration and receive a passing grade.

Bank of America
Employees can get up to $5,250 in job-related courses or degree programs covered each year.

Chipotle
Both hourly and salaried employees at this fast-food chain are eligible for tuition reimbursement. To offer this benefit, Chipotle partnered with Guild Education, which offers online classes, programs, and degrees from a variety of universities. Employees can work toward degrees (undergrad or graduate), take classes, earn a GED, or study ESL, eligible for up to $5,250 annually.

Ford Company
This car company has a generous education program that will pay for up to $6,000 per year in tuition and fees in advance of class completion.

Home Depot
Tuition reimbursement rates for Home Depot employees vary by role — salaried employees can get up $5,000 annually, while full-time hourly employees are reimbursed up to $3,000, and part-time hourly employees can get up to $1,500 back.

JetBlue
The upscale airline runs a program known as JetBlue Scholars — employees can apply to enroll, and once accepted, take approved online courses. To be eligible, employees must have worked at JetBlue for two years, and have prior college credits in place.

Proctor & Gamble
Up to 80 percent of tuition and fees are reimbursed at P&G, makers of a vast range of consumer and household goods. Employees must get programs and fees pre-approved, and there is a cap of $40,000 of reimbursed expenses.

Smucker's
The J.M. Smucker's company makes more than jam — its brands include big names like Folgers, Pillsbury, and Meow Mix. The company offers up to 100 percent reimbursement for tuition costs for company-approved college courses.

Starbucks
All benefits-eligible United States employees of this coffee purveyor can have their full-time college tuition covered, essentially a free bachelor's degree. One important note on this program: Employees can only study at Arizona State University's online program.

UPS
Part-time UPS employees who work in package handling can participate in the company's Earn and Learn Program, covering up to $25,000 in college expenses (each year, the program reimburses a maximum of $5,250). According to the company website, employees are eligible for this perk from their start date. (Other education assistance programs are available for employees in different roles.)

Walmart
Like Starbucks, Walmart partnered with an educational institution — for Walmart, it's American Public University — as part of its educational assistant program. Both part-time and full-time Walmart and Sam's Club employees, as well as eligible family members, may receive a tuition grant that reduces the cost of courses by 15 percent. Employees who have a high school degree or GED are eligible on the first day of employment.

Wells Fargo
The banking giant offers up to $5,000 in annual (and eligible) tuition expenses.

Verizon
All employees at Verizon, the telecommunications giant, are eligible for up to $8,000 in tuition reimbursement each year. Verizon's program requires that classes be related to the business.

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