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A Degree with a Discount: How Tuition Reimbursement Works

Published by
Emily Africa
Edited by
David Hodges
Fact checked by
Andrew Latham
    • Summary:

    Higher education is an investment in your career. Many companies will happily invest in you by taking on some of the financial burden of a degree. Tuition reimbursement is when your company pays you back for part or all of the training, course, or degree costs. Along with this come policies and requirements unique to your company. If you do your research and communicate with your company, you’ll be on your way to expanding your knowledge and likely your earning potential.

    Several companies offer unlimited paid time off. Some have stellar 401(k) matching. And some will pay for your education. Tuition reimbursement or tuition assistance programs are benefits that companies provide to recruit and retain good employees and to help their careers progress.

    If going back to school, whether for a degree or certificate, is in your future, take advantage of a tuition reimbursement program to get the most out of your job and education. Keep reading to learn all about tuition reimbursement and how to get it.

    What is tuition reimbursement?

    Tuition reimbursement is an agreement between an employee and an employer. The employer agrees to invest in the employee by reimbursing some or all of the employee’s higher education costs. When employers provide this assistance, they expect employees to benefit the company with their new knowledge.

    In short, tuition reimbursement means your company helps pay your tuition. It’s a great way to get the lifelong benefit of a degree or any form of education in a financial partnership with your current employer. Every employer may do tuition reimbursement a little differently — if at all.

    How does tuition reimbursement work?

    It often works a lot like how it sounds. The employer reimburses the employee’s tuition. You (the employee and student) pay for your tuition and fees upfront. Then, usually, once you complete the semester or course, you send a receipt to your company, and they will pay you back all or some of the costs.

    Other types of company-sponsored financial aid programs include tuition assistance and student loan assistance, which are different than tuition reimbursement. Some companies offer to pay for some or all of your educational expenses upfront rather than reimbursing.

    The details and logistics vary from company to company. Your best resource on all things tuition reimbursement and related policies is your company’s HR department. Speak to your manager or HR representative to get more information.

    Pro tip

    Wait to enroll in classes until you’ve flushed out all the details with your company. It’s best not to assume your company will reimburse your tuition, even if it’s in your employee handbook, because tuition reimbursement policies can be complex. Talk directly to your HR department to ensure you and your desired coursework qualify.

    What companies offer tuition reimbursement?

    Unfortunately, tuition reimbursement programs aren’t standard across all companies. Not everyone offers tuition reimbursement at all. However, there are several companies known for their tuition reimbursement programs.

    What are tuition reimbursement requirements?

    Your company will expect you to meet certain criteria before, during, and after you receive tuition reimbursement benefits. Talk to your manager or HR representative about your company’s policies.

    Program requirements

    Remember, companies structure tuition reimbursement programs to be a win-win. Rarely will your company reimburse you for higher education programs that require you to take time off work. Additionally, they may only fund classes related to your job. Some companies may limit you to courses offered at accredited schools or educational partners. Consider these factors are you browse program options.

    Academic requirements

    Once granted employer tuition reimbursement, you will likely have to adhere to academic requirements during your studies. Some reimbursement programs are contingent upon your academic performance. For example, your company may only agree to sponsor your coursework if you maintain a 4.0 GPA. Talk with your HR representative about your company’s policy and consider how you can set yourself up for success.

    Employment requirements

    Like many other benefits, there are often limits on who is eligible. For example, an employer’s tuition assistance or reimbursement program may only be available to full-time employees who’ve worked for the company for at least one year. Others might offer to fund the college education of part-time employees, effective on their first day. In addition, some employers offer tuition reimbursement in exchange for a commitment from the employee to stay at the company for a given amount of time.

    Financial aid requirements

    You can get financial aid from your company, the government, and other private scholarships. It’s rare for a company to cover 100% of your educational expenses. However, they typically can’t limit how employees pay for the remaining fees. Don’t skip out on looking for additional financial aid through FAFSA and scholarships. Approximately 1.7 million scholarships go out every year. At least one of them could by yours.

    How to apply for tuition reimbursement

    We’ve said it once, and we’ll say it again. Every company does tuition reimbursement a little differently. However, academic expert Christopher Hathaway of Advantage Ivy Tutoring shared with us his “Four R’s of Tuition Reimbursement Requests” that fit into any scenario.

    Research opportunities

    Step one of applying for tuition reimbursement comes well before you actually apply. First, you have to research what you want to be reimbursed for. In other words, what educational pursuits are you interested in and why? How will these pursuits affect your life and your work? Christopher Hathaway puts it this way:

    “Before speaking with anyone about the potential for reimbursement, have a good sense of its scope. Or, in other words, for what and for how much are you looking to be reimbursed? Are we talking about a weekend convention that requires admissions fees and travel costs, a four-year graduate degree program, or a single continuing education course at the local community college? The value of each opportunity is relative, so arrive at the meeting with outlined information on the intended scope of work, the learning you hope to obtain, and all projected expenses. You should also consider how this opportunity fits into your life, as you need to prove to your employer that pursuing professional development will not adversely impact your ability to perform your current job.” Click to Tweet

    Review established policies

    The next R, and your next step in pursuing tuition reimbursement, is to review your company’s policies. Get a sense of what your company offers and get in contact with the right people. Our expert Christopher shares this advice:

    “Make sure to understand what your employer offers in terms of tuition reimbursement. Some employers explicitly state whether they will pay for part or all of the fees associated with professional development opportunities, while others handle it on a subjective basis. Read the employee handbook or speak to human resources, if applicable. Otherwise, ask your supervisor directly about whether this option exists for employees. But before you engage them officially, make sure to have a game plan in place, as the response will likely be along the lines of, what did you have in mind?” Click to Tweet

    Explain relevance

    Be ready to explain the value of your continued education to your company. Why is it worthwhile for them to invest in you? Here’s Christopher Hathaway’s expert advice:

    “Asking an employer to support your professional development is akin to asking them for an investment. Be able to clearly express how this particular opportunity will help you to grow personally and professionally so as to be able to better perform your job.” Click to Tweet

    Reaffirm commitment

    The best employers want fulfillment and growth for their employees, whether at their company or elsewhere. Investing in the education of their employees holds this inherent sentiment. However, the company also expects a return on this investment. When your company funds your tuition, they hope to benefit from your expanded skill set and knowledge. Therefore, it’s helpful to make your company aware of your commitment to do so, as long as it’s genuine. Take Christopher Hathaway’s word for it:

    “Implicit in the decision to pursue professional development is the desire for upward or lateral mobility, so declare your aspirations to your employer and explicitly state how you hope that potential exists for you within the organization. It doesn't hurt to tell your employer how much you enjoy working there either — just make sure to use specifics.” Click to Tweet

    Pro tip

    Most employers’ tuition reimbursement programs are contingent upon some time commitment. Christopher Hathaway suggests you consider this and “make sure you’re genuinely invested in the opportunity itself, and that you’re willing to remain at your employer for the stated amount of time, or have an exit strategy in mind.”

    Benefits of tuition reimbursement programs

    There are several advantages to utilizing your company’s tuition reimbursement program. Consider how higher education can enrich your life and career path with the help of your company.

    • Student loan alternative: Stay out of debt as much as possible.
    • Save money: Save and spend your money elsewhere while your company helps pay for your education.
    • Earn while learning: As a part of your benefits package, you get help paying for classes while you still get paid your regular wages.
    • Expand your knowledge with less risk: Pursuing higher education is deeply rewarding in many ways, but it can feel like stepping out on a limb financially. With your company’s help, you can lower this financial risk while still gaining the educational reward.

    FAQ

    How much do most companies pay for tuition reimbursement?

    Employers pay an average of $10,500 in tuition expenses per employee for graduate school. The average tuition reimbursement or tuition assistance program pays $5,250 for undergraduate courses.

    What does tuition reimbursement mean?

    Bottom line, tuition reimbursement means that an employer pays back qualifying employees for some portion of their educational expenses.

    Is tuition a taxable benefit in Canada?

    Tuition for employment-related training is not a taxable benefit in Canada, according to the Canadian tax code.

    Does Apple offer tuition reimbursement?

    The Apple Education Reimbursement program does offer tuition reimbursement to its employees. It’s one of their many benefits, including access to Apple University.

    What companies pay for ASU online?

    Starbucks, Adidas, and Uber are among the companies that pay for their employees to enroll in ASU online programs.

    Key takeaways

    • As a part of its benefits package, companies might reimburse employees for part or all of their out-of-pocket expenses related to higher education. These programs can be of great value to both employees and employers.
    • Requirements for tuition reimbursement vary from company to company. In general, you can expect some constraints regarding which program of study you choose, your academic performance, and your employment status.
    • To pursue tuition reimbursement at your company, follow the “Four Rs”: research opportunities, review company policies, explain relevance, and reaffirm commitment.
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