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What Is Tuition Reimbursement And How Does It Work


It’s no secret that going to university can be expensive. While many students will take out loans and rack up debt, others look for creative ways to have their tuition paid. Whether you’re going to school for your undergrad, a graduate degree, or even for continuing education, tuition reimbursement is a great way to get a good education while still working to earn money.

If you’re curious about how to get this done, keep reading to learn more about what exactly tuition reimbursement is, how it can benefit you, and how exactly you can get it.

University of the People student at work Photo by Christina Morillo from Pexels

What is Tuition Reimbursement?

If the idea of getting your tuition reimbursed sounds too good to be true, we’re here to tell you that it’s a real possibility.

Tuition reimbursement is a benefit that some employers offer their employees. In most cases, you will still need to pay for your university tuition yourself, but your employer will later reimburse you when your courses are over or you’ve passed them. Some employers may even agree to cover other fees, like living expenses, transportation, or even the cost of course books.

The amount an employer covers can differ. Some may agree to pay for the full amount of each course, while others might only offer a partial refund. Either way, tuition reimbursement is one of the best job benefits you can get since you’ll receive a steady paycheck and a solid education that doesn’t force you into debt.

Why Do Companies Offer Tuition Reimbursement?

An employer will offer to pay back the cost of your education as a way to both increase employee loyalty and also to increase the skills and knowledge that employees might need to perform and excel in their job.

Offering tuition reimbursement is often a win-win for both employers and employees.

One reason companies offer tuition reimbursement is to attract top talent. Since it’s a significant benefit that not every business offers, those who do pay for their employees’ education will likely see more quality applications. Aside from new hires, companies can also promote more from within since their employees are learning new skills while they’re in school.

Companies that offer tuition reimbursement will often see better employee retention rates. Employees will want to stick around to keep their benefits, and they’ll also likely be happier and more satisfied with their jobs since they’ll be more confident in their work performance.

3 Conditions of Tuition Reimbursement

If you find a company that offers tuition reimbursement as a perk, don’t be too quick to sign the employee contract. It’s important to check first that you meet the criteria to receive tuition reimbursement so that you don’t have any surprises when it comes time to get your refund.

Check with your company or potential new employer as they might have their own specific requirements to qualify for tuition reimbursement. Still, there are some general requirements that most employers will request.

1. Program of Study

It stands to reason that the program you’re studying needs to be related to your job in one way or another. Companies want to encourage employees to expand their knowledge in a field of study that will advance their work performance. So, if you’re working in finance and you want to get a fine arts degree, chances are your employer won’t be too keen on reimbursing your tuition.

If you’re unsure whether your program of choice will be covered or not, sit down with a manager at your company and discuss your options. With their input, you might find a broader choice of courses you can take that you didn’t previously think of.

For example, if you work at a smaller company, maybe they’re looking to fill a role that doesn’t currently exist yet. Your program of study might be helpful for you to transition to a new position within your company.

2. Cost of Tuition

Unfortunately, there is usually a limit to your employer’s generosity when it comes to tuition reimbursement. There are a few factors that can affect both your eligibility and the amount of money you’ll get back.

First, there are tax implications for tuition reimbursement with the IRS. The IRS will only allow $5,250 to be written off for employee education purposes, so it’s very likely your employer won’t want to exceed that amount.

Second, your company likely has a cap on how much they’re able to spend annually on employee education. If your co-workers also take advantage of tuition reimbursement, the company can run out of funds for this particular benefit. More senior employees or those who are studying something that is of more immediate need to the company may be prioritized.

Try and bring up your intention to study with your employer as soon as possible so that both you and they can plan ahead financially.

3. GPA

Your employer will want to ensure that you’re maintaining a minimum GPA in order for you to qualify for tuition reimbursement. Even more than that, some employers may base the amount of your refund on the grade you receive in a course. For example, an A would get you a full refund, and the amount of your refund can decrease with each descending letter grade.

Not all employers do this — some may just set a minimum required passing grade, such as a C, but it’s important that you check what the GPA requirements are first. Of course, when paid tuition hangs in the balance, you might find this as even more motivation to crack down and get serious about your studies!

How to Ask Your Employer for a Tuition Reimbursement

Before approaching your boss or HR representative about tuition reimbursement, you should think about how your education might impact your work and how to frame this for your employer.

Here are a few tips for you to use before heading into the meeting with your company:

  • Fully research the program you intend on studying and come prepared with information about a number of different courses that are relevant to your current position.
  • Outline how your education can add value to both your work and your company. Mention your goals within the company and how an education can help you achieve those goals.
  • Show your employer how they might also benefit from your education. For example, will your education and newly-learned skills cost less than hiring a new employee? Can you take on more responsibilities at work after completing certain courses? Will you be able to train other employees with the skills you’ve learned?

If your employer agrees to cover your tuition, great! However, your work isn’t over yet. You should still have some questions regarding how the costs will be refunded, what exactly are the requirements, and when the reimbursement will be paid out.

You’ll likely be asked to sign an education contract, which might include a clause that you need to stay employed at your company for a determined amount of time after you complete your education. Whatever the clauses are, make sure you’ve asked all the important questions, covered all your bases, and gotten it all down in writing.

Two women in a meeting for tuition reimbursement Photo by Christina Morillo from Pexels

Companies That Offer Tuition Reimbursement

Even though reimbursement conditions might differ from one employer to the next, it’s still good to be aware which companies offer this benefit when you’re on the job hunt.

Here are a few of the companies that offer tuition reimbursement:

  • Target – up to $5,250 for an MBA degree
  • UPS – up to $25,000 in tuition assistance
  • Home Depot – up to $5,000 annually for tuition assistance
  • Starbucks – full tuition covered for a bachelor’s degree through Arizona State University’s online program
  • Chipotle – up to $5,520 in tuition reimbursement
  • Wells Fargo – up to $5,000 in tuition expenses annually
  • Amazon – up to 95% of tuition fees for in-demand degrees
  • AT&T – up to $25,000 in tuition reimbursement after one year with the company
  • Verizon – up to $8,000 annually in tuition assistance
  • Intel – 100% reimbursement for courses taken through Intel University
  • Proctor & Gamble – up to $40,000 tuition reimbursement for pre-approved courses
  • Deloitte – full reimbursement on graduate studies after two years with the company
  • FedEx – up to $5,000 annually in tuition assistance
  • McDonald’s – up to $3,000 annually in tuition assistance

This list isn’t exhaustive and is subject to change, so it’s best to check with an HR manager to see what the current offer is for tuition reimbursement.

The Bottom Line

Tuition reimbursement is a fantastic way to make the most of both your education and work experience. You can implement the skills you learn in your courses into your daily job and reap the benefits of your education right away. Finding a job with a company that offers this benefit will surely help you advance your career in more ways than one.

Even if you’re working at a company that doesn’t offer tuition reimbursement, doesn’t mean that you need to miss out on an education. University of the People’s tuition-free courses offer you a high-quality education at an accredited institution for a fraction of the price. Have a look at our offered courses and apply to begin your online degree.