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What is Tuition Reimbursement?
Tuition reimbursement is a method of assistance offered by employers to their employees towards a degree. It is also a way of encouraging employees to advance their education and skills.
Additional graduate degrees and learning new and relevant skills are key to earning a raise at your workplace. You also get to enjoy added opportunities and a sense of accomplishment. The only reason why most people are unable to pursue their dreams of a graduate degree is usually the expenses that come with pursuing a graduate degree.
Most employees do not utilize the tuition reimbursement program. It is speculated that about 95% of employees miss out on the opportunity of tapping into this gold mine.
Tuition reimbursement offers employees the opportunity to go for a graduate degree without necessarily having to worry about the cost of pursuing their dream. A predetermined percentage of an employee’s tuition is usually covered by the tuition reimbursement program.
In 2015, a survey shows that 28 billion is spent annually by companies in the US to fund the tuition reimbursement program. About 83% of companies in the US provide reimbursement of tuition to their employees who are undergoing a graduate degree program.
It is however sad that although a good percentage of companies in the US are ready to finance the postgraduate degree of their staff, only about two- five percent of employees benefit. A good percentage of employees are not even aware of this benefit. Some companies charge their employees monthly for this benefit.
The human resource department will be able to answer your questions about the benefit and tell you whether or not your company removes a monthly charge for it.
Tuition reimbursement is a taxable income, you need to keep this in mind when calculating your tax bracket.
How does tuition reimbursement work?
The policies usually vary from one company to another. While some companies pay upfront, other companies require that you complete the degree and then submit a request for reimbursement from the company afterward. You also need to be sure what percentage of your coursework your company is paying for.
The percentage varies from one company to another. It is therefore important you know what your company reimbursement policies are. Most companies are, however, increasing their educational program benefits due to the importance of such programs and the benefits they also stand to get when their employees improve themselves.
Here are some of the policies companies have for their tuition reimbursement program.
- Most companies have a limit to the amount an individual is entitled to as tuition reimbursement annually. This amount is depending on the company in question. The amount in most cases will not cover the entire cost of your tuition. It, however, should be able to cover a sizeable part of the tuition cost. Some companies have a specific amount that they pay to their employees as tuition reimbursement.
- Tuition reimbursement is usually not paid till after the completion of the degree. The employee pays for the tuition upfront from your pocket or you take a loan. At the end of the degree, your tuition reimbursement will be processed. In rare cases, the company pays for the tuition upfront. Some companies however pay for the books you will be needing during the course.
- It can take many forms. Some companies pay using a check, some use stock shares while others add it directly to your paycheck. The method of payment is based on companies preference. You will need to find out the method your company uses.
- Reimbursement usually covers courses that are related to the job. You should not expect tuition reimbursement on courses that have no link to your current job. Employers pay for this reimbursement because the added degree is adding value to the work you are doing for them. Where the degree is not adding value to the company, no reimbursement will be made. Small companies especially follow this policy. A small IT-related company is most likely not going to offer tuition reimbursement to a staff who goes to take a master’s in archeology because the degree is unlikely to add value to the work that the employee is doing in the company.
- The company reserves the right to indicate the number of years the reimbursement will be for. In most cases, it is usually for 4 years maximum. Any course that exceeds the number of years is not eligible for tuition reimbursement once the time stated has elapsed. Some companies go as far as stating particular institutions the reimbursement will cover. If you go for a degree in a university not accredited by your company, the tuition reimbursement program will not extend to you. Sometimes, employees also state the required grade an employee is expected to make to be eligible for reimbursement.
- Where a company pays upfront and the employee is unable to meet up with the grade requirement of the company, such an employee will be expected to pay back the money received from the company.
- Usually, there is a stipulated time an employee is expected to remain with the company after accessing the reimbursement program. This is important because the employer expects to reap dividends of their investment before the employee decides to look for another job. Reimbursement is not made until the agreed period elapse.
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Why do companies offer tuition reimbursement to their staff?
Company’s output is directly related to the skills of its staff. A company with unskilled and inexperienced staff will not be able to perform very well. This is why companies are interested in the skills and educational pursuit of their staff. However, enrolling for any of these certifications will be an advantage
Companies that offer tuition reimbursement stand to gain a lot. Instead of always looking out to employ new talents and skills, they get to retain their old staff and help them sharpen their skills and even acquire new skills. Companies also find it easier to employ staff and retain them. Most people are interested in working in a place where they can grow and their achievement is recognized and appreciated by the company.
Benefits of tuition reimbursement.
Tuition reimbursement is of great benefit to both parties. While the employee gets to achieve a graduate degree and add a feather to their cap, the employer on the other hand will enjoy the dividend of the degree as the employee is expected to perform better.
Employees get to sharpen their old skills and obtain new skills that are valuable to the company. Employees that work in companies that offer tuition refund are usually happy and seek to give their best to the work because of the benefits they stand to enjoy. These employees feel a sense of loyalty to the company and they try to give their best to their work
Companies that offer this benefit to their employees do not spend so much as the expense is tax-deductible. Companies get to spare up to $5, 250 yearly per employee. This tax break is beneficial to companies, so much so the amount they spend on their employees is negligible. Companies however need to ensure they comply with government regulations to enjoy this tax break.
Also, employers can ensure that their employees acquire specific skills by tailoring their policy to reflect that the policy only covers courses that are relevant to the particular skill set.
The company will not have to spend money on recruitment. Their old staffs stay with the company and get promoted. This saves the company the cost of finding, hiring, and training new staff.
Tuition reimbursement also improves a company’s reputation and entices those looking for a job.
Employees also enjoy personal gains from tuition reimbursement programs. Most people are unable to further their education because of insufficient funds. An opportunity for them to go to school and pursue their dreams without having to worry about carrying the brunt of the financial implications is welcome.
They also do not have to worry about being out of work while they pursue their dreams. You get to work and school at the same time.
Any way you look at the program, it is a win-win for both staff and employers.
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Companies that offer tuition reimbursement
Most big companies offer tuition reimbursement for their staff. If you are not sure if your company offers it, you can simply discuss it with HR or the company’s manager to find out if the company does tuition reimbursement and its policies concerning it. Some companies who do not offer it are still open to coming to a mutually beneficial agreement
Here are some companies that offer tuition reimbursement :
- Starbucks
- Pepsi
- Lowe’s
- Verizon
- Apple
- Ups tuition reimbursement
- Chick-Fil-A
- Sheetz
- Home Depot tuition reimbursement
- Google, and a host of others.
Tuition reimbursement is a tool that both employers and employees should maximize as it benefits both greatly.
