It’s been several years since you started working for your current employer. You’ve seen employees come and go with most advancing in their careers as expected, confirming your belief that opportunity for growth in your field remains strong. But here’s the thing: A graduate degree may be required to gain access to the additional employment opportunities and higher salary you’re after.
A graduate-level credential not only provides the opportunity to earn more money and help your career reach new heights, but it also offers greater credibility, helps satisfy a desire for lifelong learning, and can leave you with a sense of accomplishment not found in other pursuits. It’s hard to argue against the benefits of going to graduate school.
Whether you’re looking to move into a management position or make a career move, going back to school is the best way to make that happen. The only thing that may be stopping you is the expense of pursuing that advanced degree.
But if scholarships, loans, and grants aren’t enough to cover the cost of graduate school, don’t despair. If you’re currently employed, then you might be one of the 95 percent of eligible employees missing out on one of the most valuable, yet underutilized, ways to pay for graduate school.
It’s called tuition reimbursement, and accessing it can make it possible for you to enroll in a graduate degree program as soon as next semester.
What is Tuition Reimbursement?
Tuition reimbursement (also known as tuition assistance) is an employee benefit through which an employer pays for a pre-determined amount of continuing education credits or college coursework to be applied toward a degree. These programs are intended for employees looking to advance their education as it relates to their current career track, offering the chance to increase their industry knowledge and develop advanced skills.
These benefits are widely available, although under-utilized. A 2015 survey found that U.S. companies spend 28 billion dollars annually on educational assistance programs, with over 83 percent of organizations offering some type of tuition reimbursement benefit. On average, however, only two to five percent of eligible employees use tuition assistance programs, and 43 percent of working professionals are unaware of their employer’s benefit.
On average, companies spend somewhere between $5,000 and $6,999 per employee per year, although organizations are beginning to increase their educational benefits as they see the positive impact they can have on their business. About 40 percent of these employers choose to pre-pay for student’s coursework to encourage participation in their tuition reimbursement program. These programs vary, however, so it’s crucial that you review the program details before assuming your college coursework will be fully covered. You may have to foot the bill upfront and submit a request for reimbursement in accordance with your employer’s tuition assistance policy.
While specific program policy details differ by organization, here are a few commonalities to keep in mind.
Tuition Reimbursement Requirements
Tuition reimbursement programs often contain employee and coursework eligibility requirements. Your employer’s program eligibility requirements may differ from the samples provided here.
- An annual reimbursement limit (often capped at $5,520) may be assigned per employee based on his or her current job title. Employer tuition assistance usually won’t cover the entire cost of a degree program, but it can make a major difference in your ability to pay for school.
- Reimbursement may be limited to four-year schools or to a specific list of accredited institutions.
- Eligible coursework is often limited to subjects related to your current job.
- Employers may require that employees earn a grade of “B” or higher to qualify for tuition reimbursement.
- Your employer not only hopes to reduce turnover by offering tuition reimbursement but also to experience a return on the investment. Employers might require that employees remain employed for a specified period after completing the coursework before the payment is processed. The period can range anywhere from a few months to several years.
Tuition Reimbursement Programs are a Win-Win
Tuition reimbursement programs offer clear benefits to employees looking to upskill and advance. Savvy professionals know they can turn their employer’s financial support into a graduate degree that will carry them the rest of their professional career. But what’s in it for the employer?
As with most employee benefits, they are designed to reduce turnover and attract additional qualified candidates to the organization. Many companies around the world (including at least 25 major employers in the Boston area) understand the value of tuition reimbursement programs and actively use it as a tool to recruit new talent.
An Accenture study found that investing in employees pays off big. For every $1 a company spends on educational assistance programs, they save $1.29 in recruiting costs. Plus, by upskilling their employees, companies also have more promotable staff which lowers the cost of hiring new personnel. There’s also a tax benefit to employers who offer tuition reimbursement programs.
Organizations with educational assistance programs also benefit from more engaged employees. Employees feel valued, knowing their employer supports their professional development, which 86 percent of employees report as very important to them.
Beyond the Money: Other Benefits of Tuition Reimbursement
Unlike other employee perks related to money (e.g., 401k plans, monetary bonuses, etc.,) tuition reimbursement benefits aren’t reported on your federal income tax as income. The amount you receive in employer assistance should not be reflected on your IRS Form W-2 unless it exceeds $5,250 during the tax year. And while the most apparent benefit of employee tuition reimbursement is the additional source of college funding that will help reduce your reliance on student loans, some other benefits can’t be measured in dollars and cents.
The completion of your graduate degree can help build your confidence in the workplace and impact other parts of your life, too. Not only are you 21 percent more likely to be promoted and on the path to receiving 40 percent higher wage increases compared to co-workers who pass on the opportunity, but you will also inspire those around you, showing them that, with determination and resourcefulness, what seems impossible can be achieved.
How to Get Started
Take advantage of your company’s tuition reimbursement program by contacting the human resources department and following the steps below.
Request a copy of their tuition assistance policy and read the fine print. You’ll want to identify any program requirements and limitations before you enroll in classes. Even if your employer has not entered into a training agreement with an educational institution, there may be restrictions on which educational credits qualify for reimbursement. For example, college credit completed at a community college may be eligible while coursework completed at a local private post-secondary institution may not be.
Communicate with your HR representative about your educational goals. Let your HR representative know that your objective is to obtain a graduate degree. He or she can assist you with getting the most out of your company’s tuition reimbursement program.
Find out what signatures are required. In most cases, prior approval is required from your employer before enrollment. You’ll also want to confirm that your employer doesn’t require you to remain employed for a specified period after the course is completed. Make sure you check with HR so you’re not left with unexpected tuition obligations.
Lastly, some employers may require you to complete a Free Application for Federal Student Aid (FAFSA) before submitting a request for reimbursement. This encourages employees to exhaust other options before applying for tuition reimbursement. It’s important to clarify these details beforehand.
Follow up on the paperwork. Make sure you submit the required paperwork to your employer before classes begin. Once classes are completed, ensure the necessary documentation for reimbursement is processed promptly.
Keep in mind, your current employer may not advertise the availability of their program, so be sure to connect with your human resources department today. Even companies without formal tuition reimbursement programs may consider offering this perk if you can convince them of the benefits.
Maximize Your Benefits
The only way to take full advantage of this employee benefit is to understand your employer’s participation requirements. Use the following checklist to get the most out of your employer’s tuition reimbursement program:
Take the Next Step
You can obtain your graduate degree by tapping into all available funding sources, including Federal Student Aid programs, scholarships, and state grants. Consider your overall graduate school financing plan and how it aligns with your employer’s tuition reimbursement policy.
If you can reduce the cost of going back to school by exhausting the annual limits of your company’s tuition reimbursement program, this benefit may hold the financial key to completing your degree.