According to a 2017 World at Work survey, 92% of companies within the United States offer a tuition reimbursement or tuition assistance program. Increasingly, businesses are recognizing the benefits of giving employees the opportunity to further their education. This not only helps workers; it can also be enormously advantageous for the businesses themselves.
What is it?
Through different types of benefits programs, employers agree to pay for some or all of their employees’ continuing education, whether they want to earn an associate’s or bachelor’s degree, take college courses to help them in their careers or pursue an advanced degree. Usually, the employer caps the amount it will offer the employee for her education and may apply additional rules as well, such as establishing the relevance of the coursework to her role at the company or requiring the employee to attend a program on a pre-approved list of options.
How does tuition reimbursement work?
Tuition reimbursement benefit programs vary from organization to organization. Some common requirements include:
• An established length of time during which the employer will pay for education, with an annual and/or lifetime cap
• Specific schools, courses or programs
• Length of employment prior to enrolling or matriculating
• Maintaining a certain grade or GPA while the employer is paying
• A stipulation that the coursework must be related to the employee’s job
• A requirement that the employee must remain with the company as long as the employer is paying for her coursework and/or for a certain period of time following its completion
The amount of money an employer will pay toward your education also varies. Some employers cover tuition in full, although this usually only occurs if the employer has a set list of programs or schools to choose from. Others will specify a maximum amount of money they will offer per year or per lifetime. Some will reimburse employees after they have completed the program or been enrolled for a certain period of time, while others will do so immediately upon enrollment.
Keep in mind that tuition reimbursements provided by your employer that exceed $5,250 per calendar year are considered taxable income. In addition to covering employees’ tuition, some programs also offer assistance to their family members, such as their children.
What is the average tuition reimbursement?
According to Talent Culture (2018), the median amount of tuition reimbursement per employee is $5,250 for undergraduate students and $10,500 for graduate programs. However, as we’ve discussed, this amount can vary considerably from company to company.
Is tuition reimbursement a good idea?
Tuition assistance programs are generally a welcome benefit for employers and employees alike. The International Federation of Employee Benefit Plans found that 75% of organizations believe their tuition reimbursement programs to be successful, as per a 2015 survey.
For employees, the advantages are clear: they are able to advance their education and gain credentials at minimal and sometimes no cost to them. Moreover, because tuition reimbursement programs often stipulate that the coursework must be relevant to the employee’s job, they usually gain skills that will help them in careers and sometimes lead to promotions or other opportunities.
Employers, too, can appreciate the benefits of these programs. Some of the advantages of offering them include:
• Greater employee satisfaction
• Higher retention rates/lower turnover
• Strong incentives for recruitment
• Improved skills and qualifications
• Reduced recruitment costs, thanks to a more skilled and qualified staff
• Higher engagement
In general, offering tuition assistance makes employers a more attractive option for talented candidates. Chipotle, for example, partnered with Guild Education to expand its program (more on that below) in 2016. Since five months after the new program began, the fast-food chain saw an 89% retention rate among participating employees — nearly twice that of employees who did not participate, the Society for Human Resource Management (SHRM) reported.
Which companies offer tuition reimbursement?
Many big and small organizations throughout the country offer tuition reimbursement programs. Below are examples of some of the more generous offerings from larger, well-known companies. Keep in mind that this list is not exhaustive.
Employees may receive up to $5,000 per year to apply to tuition and other education-related expenses such as textbooks at an accredited institution.
Bank of America will give full-time and part-time employees who have worked at the company for at least six months up to $5,250 each year for courses or degree-granting programs related to their jobs.
Chipotle’s initial program offered employees up to $5,250 in tuition each year for any institution. Now, as part of its partnership with Guild Education, it will also cover all upfront costs of tuition for employees who qualify to earn their associate’s or bachelor’s degrees in one of 75 different business or technology programs. Employees must have worked for the company for at least 120 days and 15 hours per week to qualify.
Through Fidelity tuition reimbursement program, full-time employees will receive assistance with up to 90% of education-related costs, with a maximum of $10,000 per year, at accredited institutions toward a work-related certification or degree program of study. Additionally, Fidelity will help graduates pay off student loans by contributing up to $2,000 annually, with a maximum of $10,000.
5. Home Depot
Salaried employees who have been with the company for at least 90 days may receive $5,000 per year toward tuition. Full-time hourly employees and part-time hourly employees may receive $3,000 and $1,500 respectively.
In many cases, Intel reimburses tuition in full — up to $50,000 per program to apply to tuition, books and other fees. Moreover, employees may take advantage of in-house Intel University courses and receive some reimbursement for work-related courses outside the company.
JetBlue recently expanded its tuition reimbursement program, formerly just for online courses and personalized coaching through Thomas Edison State University. Now, crewmembers may also receive assistance in earning their master’s degrees through the City University of New York School of Professional Studies, Louisiana State University Shreveport, Thomas Edison State University, University of Maryland University College and Western Governors University.
For approved programs, Oracle offers up to $5,250 in tuition fees per year.
With a cap of $40,000, Procter & Gamble will reimburse up to 80% of tuition and education-related costs for employees, with the stipulation that programs and costs must be approved in advance.
Associates who have worked at the company for at least six months for an average of 10 hours per work may receive up to $3,200 per year for up to $12,800.
Employees may receive up to 100% of tuition expenses for preapproved programs.
Starbucks covers full tuition for employees who enroll in the College Achievement Plan. To participate, employees must enroll in an Arizona State University online degree program.
The UPS Earn & Learn Program offers part-time employees up to $25,000 in tuition-relation expenses.
Verizon reimburses tuition costs up to $8,000 per year for full-time employees and $4,000 per year for part-time employees. Qualifying employees are eligible as soon as they are hired.