Tuition reimbursement can be an incredibly powerful benefit to have in your employment toolkit, but it’s not something that everyone knows how to use correctly. In fact, some people who have it don’t even know they have it, and may not know what the eligibility requirements are or what they should do with it if they do qualify.
This guide will explain the different types of tuition reimbursement programs, how you can make sure you’re eligible for any available plans, and how to make the most of your benefits if you do qualify.
What is tuition reimbursement?
If your company offers a tuition reimbursement program, you can use it to pursue additional education (bachelor’s or master’s degree) that may help in advancing your career.
The reimbursement doesn’t have to cover all of your expenses; just ask for a partial reimbursement if you are self-funding part of it.
If your company doesn’t offer a tuition reimbursement program, ask if it will cover your expenses as part of a sabbatical program.
Many companies understand that professional development is important for employees, so they allow people to take time off in exchange for continuing their education.
If you can work out an agreement like that, you’ll have time to earn credits while still getting paid by your company.
If your company doesn’t offer any of these programs, you can still pursue higher education. Just check with your HR department to see if it will cover any expenses (books, fees) associated with education that may enhance your career.
If it does not, look for scholarships or financial aid opportunities for which you qualify. You might also consider asking friends and family members if they would be willing to help with tuition costs in exchange for some tutoring services.
Who can receive tuition reimbursement?
Anyone with a regular, full-time job may be eligible for tuition reimbursement. The amount you can receive is typically subject to a cap that's adjusted annually—for 2016, it’s $5,250 (it was $5,115 in 2015). Employers can choose whether they want to offer any additional funding above what's mandated by law.
All of these different stipulations are taken into account in determining whether or not you're eligible for tuition reimbursement.
Your eligibility is also subject to an overall cap that may vary depending on your employer's policy. For instance, AT&T limits tuition reimbursement at $8,000 per year, which includes expenses incurred by both you and your dependents.
Can I be reimbursed more than once?
Yes, you can be reimbursed for work-related education expenses every tax year. There is no limit on how many times you can be reimbursed in a given year. Just remember that your tuition reimbursement amounts should not exceed what you paid for school during that year.
This can include fees, books, supplies, tuition, travel and living expenses. If you are reimbursed by your employer more than once per year, that’s perfectly fine. As long as you don’t exceed what you spent on education-related expenses during that year.
Do I have to work a minimum number of hours per week?
No. The more hours you work, however, and more value you bring to your business, the better chance you have of receiving tuition reimbursement.
Is there a limit on the amount that can be reimbursed?
No, there is no limit on how much a company can reimburse. But some companies are less generous than others; Google, for example, currently reimburses tuition at $8,000 per year.
Other companies reimburse at much higher rates—here’s a roundup of what some of Silicon Valley’s biggest tech companies offer their employees.
Can my spouse receive reimbursement too?
No, if your spouse attended school or is currently attending school on a full-time basis, they cannot be reimbursed under your tuition reimbursement program.
If they are eligible, they must apply for tuition reimbursement separately through their employer. Only one reimbursement request will be accepted from an employee in a calendar year.
What do I need to have when requesting reimbursement?
To be reimbursed for tuition, you must meet certain requirements. First of all, you need to have attended a university or college in pursuit of a degree.
Further, it is required that your employer provides tuition reimbursement as part of their employee benefits package; some employers will reimburse an employee up to a certain limit (sometimes $5000).
In addition, your employer needs to have tax-exempt status; if they don’t, they may not be allowed to pay employees back for their education.
If I work overseas, am I eligible for tuition reimbursement?
In most cases, you’re not eligible for tuition reimbursement if you work overseas. You need to work in a domestic location of your company or at a bona fide U.S. business office (branch) of your employer located abroad.
Can this benefit be used with continuing education courses such as in graduate school, medical or law school or master's degree programs?
Yes, but keep in mind that some companies might have restrictions. For example, under Facebook’s tuition reimbursement program, you may only receive up to $5,250 per year if you are a full-time employee (up to $2,087.50 per quarter) and enrolled in an eligible degree program.
If your employer offers tuition reimbursement for continuing education classes taken outside of work hours for your current job or other jobs held at other companies, then you may be able to receive it again.
Can I use tuition reimbursement if my dependents are also going back to school (spouse, children, etc.)?
Yes. Many employers will cover dependent tuition costs under a tuition reimbursement program, though specific restrictions apply. Check with your HR department for details about your company’s policy on dependent education benefits, which are often included in a tuition reimbursement plan.
Typically, employees must use their reimbursement within one year of receiving it from their employer—so if you need more time to pay off student loans or save up for future courses, be sure to keep track of how much money you’ve received.
Conclusion:
Tuition reimbursement is one of many benefits that employers offer their employees. Many employees may be unaware of these plans, so it's a good idea to check out your employer’s website and look for tuition reimbursement as well as other available benefits.
To learn more about tuition reimbursement, talk with an HR representative at your company. They can help you understand what tuition reimbursement is, how it works, and if your employer offers such a benefit.
