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How To Use Tuition Reimbursement To Save On College Expenses

How can you use tuition reimbursement to fund your college education and achieve your professional goals? Tuition reimbursement is when employers reimburse employees for education-related expenses they incur. Employers provide tuition reimbursement for employees to upskill in their current profession. Employees can complete degrees or start degrees that will enable them to enhance their existing workplace skills. Providing tuition reimbursement benefits employers because employees will use the skills learned and apply them to the workplace.

How Does Tuition Reimbursement Work?

When employees seek tuition reimbursement, they typically seek approval from their supervisor before enrolling in a college or course. You will be eligible to enroll in the class(es) when consent is received. Tuition reimbursement must be applied or benefit the employee's current profession. Electives are allowed if part of a degree program that applies to your career. In addition, you must take courses through an accredited institution for them to be eligible for reimbursement.

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When Will I Be Reimbursed?

Typically, you will pay for the course, receive a passing grade, and provide your transcript and invoice to your employer for reimbursement. Some schools allow employees eligible for tuition reimbursement to delay payment until after the course is completed. This way, the employee does not have to pay out of pocket. You must receive a passing grade in the class to receive tuition reimbursement. It does not benefit your employer if you do not pass the course.

How Long Do I Have to Work for My Employer?

Some employers require employees to sign reciprocity agreements when applying for tuition reimbursement. These agreements vary by employer and can include a rating scale on what the employee would have to repay the employer if they exit the organization within a specific time. However, other employers do not require employees to continue working for them after course completion.

Is Tuition Reimbursement Taxable?

The IRS allows for non-taxable tuition reimbursement of up to $5,250 per calendar year. After the employee exceeds this limit, the tuition reimbursement is taxable and included in the employee's gross income.

Do I Qualify for Other Financial Aid, or Need to Fill out the FAFSA?

Yes. Employees can complete the FAFSA and apply for any grants or loans for which they are eligible. Grants received do not have to be repaid and can be used before using the employer's tuition reimbursement program.

How Do I Find Out More?

Ask your employer for their tuition reimbursement policy and determine if there is a reciprocity agreement. You should also evaluate if an annual or semester course limit extends your service requirement to your employer if a reciprocity agreement applies.

Looking for Companies That Offer Tuition Reimbursement?

Google the company and see if their website mentions anything regarding tuition reimbursement. If it is not mentioned on their website, you can always give their human resources department a call and ask.

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