For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Written By Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Kat Tretina Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans.
Personal Finance Writer Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
Caroline Basile Mortgages and Student Loans Deputy EditorCaroline Basile is Forbes Advisor’s student loans and mortgages deputy editor. With experience in both the mortgage industry and as a journalist, she was previously an editor with HousingWire, where she produced daily news and feature stories. She ho.
| Mortgages and Student Loans Deputy Editor
Updated: Dec 21, 2023, 9:54am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Earning a college degree is linked with lower unemployment rates and higher salaries, but the cost of higher education can be an obstacle.
However, if you’re currently working, you could have access to a valuable form of financial aid: employer tuition reimbursement. Both large and small companies offer this benefit. In fact, the Society for Human Resource Management reported that 48% of employers provided tuition reimbursement to their workers.
Taking advantage of this benefit could help offset the cost of your education and reduce the need for student loans.
Some employers offer tuition reimbursement as a benefit to workers. If you’re eligible for a tuition reimbursement program, your employer will pay some or all of your tuition expenses while you work toward your degree.
Companies provide tuition reimbursement as a tool to recruit and retain talented workers. The benefit also allows their workforce to learn new skills, so providing education benefits can be cheaper than hiring new workers.
Tuition reimbursement programs vary in funding amount and structure, and each company can set its own rules. For example, some companies will only pay for students to attend certain schools or specific programs, while others give the employee more choice.
Tuition reimbursement benefits can function as a prepaid perk or a reimbursement program.
With a prepaid tuition program, the employer covers some or all of the tuition and fees upfront, so the worker doesn’t have to pay the full amount themselves. Prepaid tuition plans usually require workers to enroll with certain schools, such as a partner university or an online program.
Tuition reimbursement is the more common structure. The employee completes the semester and submits a reimbursement request for their course fees. Generally, employers require the courses to be preapproved, and they’ll only reimburse the employee if they earn a certain grade, such as a “C” or better.
How much you can receive from your employer in tuition reimbursement varies by program. Generally, tuition reimbursement benefits only cover a portion of your tuition and school-required fees. Other expenses, such as room and board, books and laptops, aren’t included, so you may need to apply for other sources of financial aid.
If you plan on participating in a tuition reimbursement program, review your company’s policies carefully. Some companies have strict rules that could impact you if you quit.
For example, if you leave your job before completing your classes, your employer may revoke your tuition reimbursement approval.
If you have already completed the course and quit after receiving reimbursement, your employer may require you to repay some or all of the benefits you received. For example, an employer may have an agreement with the following structure:
6 months or less 100% of tuition reimbursement benefits 6 to 12 months 75% of tuition reimbursement benefits 12 to 18 months 50% of tuition reimbursement benefits 18 to 24 months 25% of tuition reimbursement benefits See More See LessAccording to the IRS, you can receive up to $5,250 annually in education assistance benefits without counting it as income for tax purposes. If you receive more than $5,250 per year in assistance, the excess amount is treated as income.
Since the tuition reimbursement amount can count as income, it can affect how much aid you receive. But you’ll likely still be eligible for various forms of aid, including grants and student loans.
To participate in a tuition reimbursement program, follow these steps:
If your employer’s tuition reimbursement program doesn’t cover the full cost of attendance, complete the Free Application for Federal Student Aid (FAFSA) to qualify for other forms of financial aid.
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Personal Finance WriterFor the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans, and she holds certifications in student loan and financial education counseling.
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