The Student’s Guide to Tuition Reimbursement and Assistance

Tuition reimbursement programs can help you finance your education. Learn which companies offer tuition assistance to recruit and retain top talent.

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by Heather Mullinix

Updated March 22, 2022

Reviewed by Mary Louis

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The Student’s Guide to Tuition Reimbursement and Assistance


Many people consider returning to college to finish an undergraduate degree or pursue an advanced degree. As you work through financial aid forms, be sure to check with your company's human resources department — many companies offer tuition reimbursement or tuition assistance programs to help employees pay for their education.

Earning a college degree provides many benefits, including more career opportunities and higher wages.

But the cost of college can keep people from finishing their degrees. According to the College Board, in-state students at public four-year colleges and universities paid an average of $10,740 in tuition and fees during the 2021-22 academic year.

What Is Tuition Reimbursement?

Many companies offer their employees some form of educational assistance. Tuition reimbursement plans allow workers to pursue specific degrees and certificates, with the company contributing a set amount of money.

Tuition assistance programs may offer upfront financial assistance, while reimbursement programs pay employees back after they complete a course or semester. These programs may require you to study a subject relevant to your current job or allow you to explore a new career.

Companies benefit from helping their workers achieve their professional goals. Many organizations with these programs report higher employee retention rates and use these plans to recruit new talent.

Investing in employees' education can also help a business fill critical positions with highly trained people.

How Does Tuition Reimbursement Work?

Tuition reimbursement programs usually require you to pay the upfront costs for your educational pursuits. After completing the course, or after a certain amount of time, you can apply for reimbursement up to the amount offered by your employer.

Companies may have rules regarding the types of classes you can take, minimum grade requirements, and policies for employee participation. Be sure to look at your organization's guidelines before committing to an educational program.

Program and Course Requirements

Some companies may only reimburse you for classes that relate to your work. Whether you're taking courses online or in person, be sure your program allows you the flexibility to continue working. Consult your HR department for information about the requirements for your course of study.

While some companies may pay for courses taken at any accredited school, other businesses work with specific universities or educational partners.

Academic Requirements

Companies often restrict tuition reimbursement to classes you complete with a passing grade. While most employers do not require you to maintain a 4.0 GPA, many organizations may prorate tuition reimbursement amounts based on your final grade or require you to earn a certain grade.

Employer Requirements

Some companies only offer tuition reimbursement programs to full-time employees, while others welcome participation from part-time workers as well.

Some organizations may allow you to begin using this benefit on your first day. Others may require you to work with them for six months or more before enrolling in educational assistance benefits.

Financial Aid Requirements

While tuition assistance and tuition reimbursement programs can help offset some of your educational costs, they probably won't cover the total cost of your education.

This is why it's so important that you submit the FAFSA. This form helps determine whether you qualify for federal financial aid, institutional and need-based scholarships, and student loans.

How to Apply for Tuition Assistance From Your Employer

Because tuition reimbursement and tuition assistance programs vary depending on the employer, your first step should be to contact your HR department. Ask about deadlines for applying for the benefit and any required paperwork.

Make sure you also understand how the program works, including what educational programs qualify, what grades you must earn, and how long you must stay with the company to access these benefits. Understand that if you leave the company before fulfilling your commitment, you could be required to repay some of the tuition reimbursement benefits.

You should also discuss your plans with your immediate supervisor. Your class load may require changes to your work schedule or other accommodations.

What Industries and Companies Offer Tuition Assistance?

You can find companies offering tuition assistance programs in a variety of industries. The Society for Human Resource Management found that 47% of employers offered tuition assistance in 2020.

As businesses struggle to fill open positions, many companies have pointed to their generous tuition assistance programs to attract new workers.

Who Are the Largest Tuition Reimbursement Providers by State?

Applying to a company that offers tuition reimbursement is a great way to offset the cost of education. We've found the largest companies that offer tuition reimbursement in each state. Interact with the map below to discover more.

State

Frequently Asked Questions About Tuition Assistance

Is there a maximum amount of money tuition assistance can cover?

Your company will determine the maximum amount of tuition reimbursement or tuition assistance they can provide. Some companies offer a set amount per class. Others may pay a percentage of the cost. A few companies, like Walmart, will pay 100% of the cost of an eligible program of study.

Before enrolling, verify your program meets your employer's requirements. Some companies work with specific schools, while others apply benefits to any accredited college. Also, ask HR how long you must work at a company before using tuition benefits and clarify whether there are any requirements for academic performance.

Do I have to report tuition reimbursement on my taxes?

IRS regulations limit tuition reimbursement programs to $5,250 per year for tax-free benefits. If your company reimburses you less than that amount, you should not have any benefits to report on your annual tax return. Tuition benefits paid beyond that amount would be subject to taxation.

The federal tax code does offer tax credits to help reduce the burden of educational expenses. The Lifetime Learning Credit offers up to $2,000 in tax credits each year for eligible educational expenses. The American Opportunity Tax Credit helps pay for the first four years of higher education, up to $2,500 per eligible student.

Can tuition assistance programs cover more than just tuition?

Some companies will offer tuition reimbursement for the cost of books or other school supplies in addition to the cost of tuition. Specific items paid for by your employer depend on their tuition assistance program policies. IRS rules do not require your educational program to align with your current career.

Many employers also offer tuition reimbursement for professional development courses that do not fall within a degree program. Often, professional development courses must align with your career field.

What can I do if my employer doesn't have a tuition reimbursement program?

According to a 2020 survey of businesses by the Society for Human Resource Management, 56% of companies offered tuition assistance programs in 2019. That figure dropped to 47% in 2020 due to the COVID-19 pandemic. If your employer does not offer a tuition assistance program, talk with your manager and HR department about the benefits it can provide employees.

Many companies use tuition reimbursement programs to help attract and retain talented employees. Companies can also take advantage of tax breaks for educational assistance programs.

DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.


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