Are you a working adult that’s been thinking about going back to school? Unsure how you would pay for your degree? The answer may be right under your nose!
Tuition reimbursement may be something your current employer offers.
According to a 2018 survey by the Society for Human Resource Management, 51% of organizations offered some form of undergraduate (bachelor’s) tuition assistance while 49% offered graduate (master’s and Ph.D.) tuition assistance.
The most common type of assistance is called tuition reimbursement. In this article, I’m going to break down everything you need to know to take advantage of this assistance, as well as give you some alternative options that may help you actually save on the cost of your college degree. So be sure to read this ENTIRE article!
What Is Tuition Reimbursement?
Simply put, tuition reimbursement is a program where employers pay part of or the entire cost of an employee’s education. These assistance programs are typically offered on top of a salary package along with other benefits such as 401(k) and healthcare.
While not every company is able to offer tuition assistance, many larger companies happily do and for good reasons: They want to help develop their human capital and stay competitive to attract top talent.
I should mention that tuition reimbursement is not the same as student loan repayment assistance. The latter is when a company provides some financial assistance for an employee’s existing loans while the former helps an employee head back to college to earn their degree.
How Does Tuition Reimbursement Work?
Many employees aren’t aware their organization offers tuition reimbursement. Often this benefit is buried somewhere in the original paperwork (that got put somewhere you can’t recall). It’s also not a benefit companies tend to heavily advertise. If you aren’t sure whether this financial program is available to you, check with your HR department. It never hurts to ask!
Each company will have their own rules for a tuition reimbursement program that pertain to how much tuition is covered, what courses qualify, a minimum GPA and the minimum time period of employment. Typically, only courses that are related to the work you perform are eligible for tuition reimbursement.
So if you are currently unsatisfied in your job position and are looking to make a complete career change, tuition reimbursement is not the right option for you. But keep reading because I will share some affordable ways you CAN go back to school to earn your degree and go after the career of your dreams!
And finally, tuition reimbursement is exactly what it sounds like: YOU are responsible for paying the tuition upfront and usually out of pocket. You will need to complete your degree program and maintain a certain GPA before your employer will reimburse you for some portion of your tuition costs.
Tuition Reimbursement FAQs
As I mentioned, each employer will have their own rules for how their reimbursement program works, so be sure to get all pertinent details from your HR representative. Having said that, many programs function is similar ways, so I am going to answer some of the most common questions regarding tuition reimbursement.
Q: What Classes Can I Be Reimbursed For?
A: Commonly, only those courses that are related to your work will be eligible for reimbursement. But it’s important to check with your employer to understand exactly how they define this. Some employers are actually open to contributing to an approved array of “relevant” courses that may help you help them face a future industry challenge. Some are also happy to help pay for those programs that will help you move into a managerial role.
Q: How Much of My Tuition Will My Employer Pay?
A: Most organizations have a set amount they are willing to contribute for qualifying courses, and typically this amount is based on a variety of factors. As an example, while some employers will agree to cover the entire cost of approved classes, others may contribute a smaller percentage of costs based on your final grades. Regardless of the amount your employer is willing to contribute, most programs require you to earn a B or higher to qualify for reimbursement.
Q: When Will I be Reimbursed?
A: This is perhaps the biggest question employees have. And it’s an important one when considering how much you’ll need to budget for classes each semester.
You’ll want to check with your HR department to see if they offer direct tuition assistance that is paid to the school on your behalf, or of they will reimburse you for costs at a later date. Typically, employers require their employees to enroll and pay for classes up front, then reimburse you later. Find out if your company pays after several weeks or several months. Do they pay after each course is completed, or in one lump sum at the end of the year?
And finally, it’s incredibly important that you make sure you understand ALL of the terms of your company’s tuition reimbursement program ahead of time. This includes any conditions that say you will be expected to pay your employer back for all or partial tuition, if, say, you withdraw from courses or do not hit the required GPA.
Q: What are Some Common Restrictions of Reimbursement Programs?
A: Before you begin enrolling in classes, understand any limits or restrictions your organization’s reimbursement program might have, such as:
- The amount you are eligible for is related to the length of time you’ve been with the company.
- There are limits on the number of classes you can take at the same time.
- There is a dollar amount you can be reimbursed for each year. (Check to see if this rule pertains to school year or fiscal year.)
- The reimbursement is vested. This means you are required to stay with the company for a set period after you have graduated and received their financial assistance. (Your employer wants to receive a return on their investment, not have an employee take their new skills and knowledge to another company!)
Q: Is Tuition Reimbursement Taxable?
A: I will preface this by saying this is not financial advice and you should absolutely consult with your own licensed tax professional regarding the current tax law.
What I will say is that the current IRS website says that your employer may deduct a portion of the cost of tuition as a business expense. Employees will NOT be taxed on the first $5,250 of tuition reimbursement, however anything over that amount is considered part of your taxable wages.
5 Better Ways to Pay for College and SAVE at the Same Time!
When you first hear about tuition reimbursement, it sounds like a really great option for getting your degree. But when you dig into these programs a little deeper, as we just did, you realize they aren’t as advantageous as they first seem.
To start, not all companies offer the reimbursement programs. In fact, only large companies have the budgets to do so. And you can understand why when you look at the average cost of attending college. Consider that one year of in-state college courses in 2019 cost an average of $10,230. That price tag only increases for private schools and out-of-state students.
If you can’t get tuition reimbursement from your employer, there are other options that are worth considering. And to be honest, these options are a lot better because they actually SAVE you money! How much? In some instances, THOUSANDS off your tuition bill.
Here are 5 ways adult students can save a lot of money toward their degree:
- Go with an Online Education
When you factor in lodging and travel, a regular college tuition has a lot of “extra” costs associated with it. Even attending night classes at your local community college will cost you gas (and keep you away from family functions).
Also, brick and mortar college campuses must pay professor salaries, property taxes, and steep utility bills. And guess what? All of these costs are passed on to you the student.
Online degrees don’t need to pass on these same costs. And because you take your courses from the comfort of your living room or home office, you don’t even need to pay for gas!
- Tuition Discounts
When wondering how to pay for college, most prospective college students think the only way they can save money is by going after scholarships and grants. But the truth is, when you take into account the time and effort that goes into applying for every scholarship and grant available versus how many are actually awarded, you soon see the math doesn’t add up.
A much better way to save money is by enrolling in colleges that actually offer upfront discounts. When you go this route, you may save as much as 5% to 25% on your overall tuition!
If you’re wondering how to find schools that offer these kinds of discounts, we’ve made that incredibly easy for you. Sign up for OnlineDegree.com for FREE and we’ll show you EXACTLY which colleges and universities across the country offer tuition discounts.
- CLEP Exams
CLEP stands for College-Level Examination Program. These exams help students earn college credit for what they already know. Pretty cool, right?!
So let’s say you got an associate degree in accounting years ago and have been working in the payroll department at your company for a few years. You already have a lot of knowledge and experience. By taking the exam and showing prospective schools you already know a portion of what they teach, you can earn credits and save yourself thousands of dollars in tuition expenses, student-loan fees, and book costs.
CLEP credits are accepted by 2900 participating colleges and universities around the country and the exam only costs $85 (while the average cost of a traditional college course is more than $900).
- Free Courses for Credit
If you like the idea of free credits, then you’ll also love the concept of taking FREE courses to earn credits!
OnlineDegree.com makes it simple for you to take as many free online courses as you’d like. Learn about computer programming, sociology, criminal justice, marketing and more, all from the comfort of your own home and all 100% FREE!
We’ve gone ahead and built relationships with universities around the country that can give you credit for the free courses you’ve finished. You’ll not only potentially save THOUSANDS on the cost of your tuition, you’ll also be able to earn your degree much quicker. In our estimation, that’s a definite win/win.
- Look for Adult-Friendly Schools
More and more older working adults are looking to head back to school to earn that degree that will catapult their career and earnings potential. And there are now plenty of colleges and universities that are catering to this select group of students, forming what is known as the “Age-Friendly University Global Network.”
Recognizing the importance of an affordable education, many adult-friendly schools offer nontraditional learning platforms, such as online curriculums or hybrid learning. These allow older, working adults the ability to save money and earn their degree in a shorter amount of time.
OnlineDegree.com is proud to have partnered with many colleges who share our mission of making college affordable to adult students. Sign up to find the right adult-friendly school for you.
Nothing Should Stop You from Learning and Earning More!
The fact that you’ve landed on this page shows you are looking for ways to be able to afford going back to school and earning your degree. And if you’re like a lot of working adults, you simply want to gain the skills and knowledge that will help you earn more for your family (or soon-to-be family).
And that’s why I created OnlineDegree.com. When I graduated from school, I was hit with a mound of debt to pay off, and I made it my mission to figure out a way people could afford higher education. You could say I “hacked” the system and found out the insider secrets.
If you want to earn your degree cheaper, faster and easier than you ever thought possible, then sign up for OnlineDegree.com right now. It is 100% free for you to join, and when you do, you’ll instantly gain access to our Smartplan, that will help you find:
- FREE courses you can take for credit
- Available discounts
- Schools that are “adult friendly” and offer flexible enrollments and course schedules
- And much more!
It only takes two minutes to sign up and get started on your journey toward earning your degree and a brighter future.
What are you waiting for? Get started today.
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