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Many companies now offer programs to help repay employees' student loans or provide tuition assistance that can help you avoid student loans in the first place.
If your employer doesn't already help employees pay for college with a tuition assistance or tuition reimbursement program, they may be willing to start one. Learn what programs your employer may offer, what getting assistance involves and how to persuade your employer to help you pay college costs.
How Employers Can Help You Pay for College
Employer-based college assistance programs typically take one of two forms. Tuition assistance programs pay tuition upfront, in most cases directly to the school. Tuition reimbursement programs, which are more common, cover the cost of tuition after an employee successfully completes courses or earns a degree.
Under IRS guidelines, up to $5,250 in tuition help can be excluded from your taxable income. If you receive more than that and the education is directly job-related, you might be able to deduct the extra assistance as a business expense.
Many companies pay for employees to earn professional certifications or get advanced degrees related to their jobs. Employers may even ask partner schools to develop courses in skills the companies need. A growing number of companies offer tuition aid to help students earn undergraduate degrees.
Employers who offer tuition help must put their policy in writing to qualify for tax breaks. These programs are less formalized at some companies. Ask your manager or HR department if your company has a tuition aid program or is interested in starting one.
How Do Tuition Assistance Programs Work?
Tuition assistance programs vary widely. Consider two very different programs: Deloitte's and Amazon's.
- Deloitte's Graduate School Assistance Program helps high-performing Deloitte consultants get into top graduate schools and reimburses the full cost of tuition. With tuition and fees for one year at the Wharton business school topping $83,000, that's quite generous. To receive reimbursement, employees must return to Deloitte after earning degrees and work there for at least two years.
- Amazon's Career Choice program pays full college costs for qualifying front-line employees at a network of participating schools. Tuition and fees are paid upfront—no waiting for reimbursement. The program also pays for employees to earn high school diplomas, GEDs and English as a second language proficiency certifications. Degrees or certifications don't have to relate to your job at Amazon. For example, one employee used her tuition benefit to get certified as a clinical medical assistant and change careers.
If your job offers tuition aid, here are some questions to ask:
- What are the eligibility requirements? Do you have to be a full-time employee, or have worked for a certain number of months or years, to get assistance?
- What schools can you attend? Employers generally restrict tuition aid to a list of partner schools.
- Can you take classes in person, online or both? Making time for college when you work is challenging. Tuition aid programs often focus on degrees you can earn online.
- How much money is available? Companies may offer a certain amount of assistance per semester, per calendar year or per degree. Some pay a percentage of tuition costs.
- What can the money be used for? Generally, tuition and school fees qualify for aid. Some employers also pay for books or computers.
- What courses, certifications or degrees qualify? Employers may limit financial assistance to specific courses they've approved or to degrees related to your job.
- Are benefits paid upfront or reimbursed? If the latter, when are you reimbursed? What is the reimbursement process? Reimbursement may be delayed until after completion of a course, a semester or a degree, and you may have to submit documentation from the school.
- Are there grade requirements? Some employers pay only if you earn certain course grades or maintain a certain grade point average. Others reimburse tuition on a sliding scale, paying more for higher grades.
- What happens if plans change? Suppose you quit your job or are laid off or fired before completing your course of study. Maybe you decide college isn't for you and drop out of school. What happens to your tuition aid? Might you have to repay the money you were reimbursed?
- Are there strings attached? For example, you may have to agree to remain with your employer for a certain number of years.
Tuition aid programs typically involve completing an application, getting preapproval for classes or degrees, and signing a contract. Read the contract carefully to understand your obligations.
How to Get Your Employer to Pay for College
If your employer doesn't pay for college, you may be able to change that. Follow this strategy to sell your company on the idea.
- Show how helping pay your tuition benefits the employer. For example, could boosting your skills help the company avoid hiring a new employee?
- Explain that they could get tax breaks for paying your tuition if they meet IRS criteria.
- Provide a detailed plan of study, including the school, the degree or certification you hope to earn, and any other specifics about the program you plan to attend.
- If your employer is still skeptical, suggest a test run. Can they pay for you to take one class or a professional development course? Demonstrating results can convince them to finance further study.
A 2021 Willis Towers Watson survey found that 88% of midsize or large employers either offer tuition reimbursement or plan to do so in the next two years, and 43% either currently, or plan to, contribute to employees' student loans. Clearly, there's an appetite in the job market for employers to offer these perks—they may simply need some encouragement from their employees.
The Bottom Line
Employer tuition aid alone may not be enough to cover college. To make up the difference, you can explore college scholarships or student loans. Good credit can help you qualify for lower interest rates and better loan terms. Before applying for a student loan, check your credit report and credit score, and take steps to get your credit in A+ shape.