Tuition incentives all but vanished from employee benefits packages during the recession, but they're slowly making it back into the limelight. The Society for Human Resource Management's most recent employee benefits survey shows that approximately 60 percent of companies offer workers some form of educational assistance -- that's up 4 percent from 2011 -- with the maximum amount of tuition reimbursement hovering around $5,000 on average. Tuition reimbursement incentives can be an excellent way for working adults to reduce college costs without getting mired in financial aid paperwork, but these programs frequently come with strict eligibility requirements. Here's what you need to know before signing on.
How Reimbursement Programs Work
Educational benefits are as varied as the companies that offer them, and many come with serious strings attached. While some have few, if any restrictions, others cap the amount of reimbursement available, relegate educational benefits to full-time employees, and require those taking advantage of these benefits to stay with the company for a certain amount of time before or after attending school. Reimbursement programs may also be limited to select institutions with whom the employer has a partnership, or may only be available for certain majors and degree programs.
"If you are an accountant or maybe you're in the accounting department, but you want to go to nursing school, that might not be covered specifically because it doesn't benefit the organization," says Jessica Miller-Merrell, CEO of the human resources consulting firm, Xceptional HR, in Mountain View, Calif.
Depending on how the benefits program is structured, some pay for courses up front while others require the student to foot the tuition bill, then reimburse later for all or a percentage of each course. That percentage may also be set on a sliding scale based on the student's grade. Should the student drop the class, change jobs or score a sub-par grade, they may not get any reimbursement says Dr. Pat Watkins, director of financial aid for Eckerd College, a school in St. Petersburg, Fla., where approximately 5 percent of adult students use educational benefits to pay college costs.
"It's very hard for schools to recruit potential students on the whole basis of 'Well, you're going to get tuition reimbursement,' because it is not, in many instances, a guarantee," Watkins says.
Doing Your Research
Even with the restrictions, tuition reimbursement programs still offer a much-needed financial lifeline, particularly for working adults who won't qualify for scholarships and grants reserved for recent high school graduates. If your company already has an educational benefits plan in place, Jessica Miller-Merrell recommends discussing the program requirements, and what you might qualify for with your human resources representative. If your company doesn't offer educational benefits, you can try to negotiate a reimbursement package, but come prepared to make your case.
"You need to do your research," Miller-Merrell says. "Look at the competition. What are they doing? What kind of benefits are being offered? What is the return on investment? Is turnover lowering?"
If you're a student who's already juggling a job and school and you're receiving need-based scholarships or grants, you may want to stop by your financial aid office too.
"The student should basically be reporting to us that they have this outside resource that's paying part of their tuition," says Delisa Falks, executive director of scholarships and financial aid for Texas A&M University in College Station, Texas. "We're to include that as a resource towards their financial aid."
That doesn't mean that you'll automatically lose your other awards, Falks adds. If your educational benefits are large enough to impact your financial aid package, many schools subtract from the amount of loans offered to a student before reducing scholarships or grants. For students already attending school, Falks recommends asking the financial aid office to estimate how much tuition reimbursement could affect their aid package.
Finding a Good Gig
The fastest way to get into a great tuition reimbursement program is to work for a company that already has a generous one in place. You can check out which companies in your area offer fantastic educational benefits by jumping online. Larger companies frequently include information about their benefits packages on their websites, but students can also dig up that information through their school's career services center and campus job fairs says Jessica Miller-Merrell. Also, keep an eye out for the growing number of companies that are adding new reimbursement programs or bringing old ones back.
"This is the first year that we're seeing really a mass exodus of [baby] boomers," Miller-Merrell says. "...Companies are going to have to be creative or start thinking about the long-term benefit of [retaining] an employee. How to keep people there isn't always money-driven. It can be perks and benefits like educational credit."
Sources:
2013 Employee Benefits, Society for Human Resource Management, http://www.shrm.org/research/surveyfindings/articles/documents/13-0245%202013_empbenefits_fnl.pdf
2011 Employee Benefits, Society for Human Resource Management, https://www.shrm.org/Research/SurveyFindings/Articles/Documents/2011_Emp_Benefits_Report.pdf