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Employer tuition assistance – benefits and restrictions

February 20,2011 by: Dallas Browne

Employer tuition assistance is a financial perk that many companies are now offering its employees for further education. It acts as an incentive to the employee and also puts a positive impression on the employer as to be a forward looking organisation. 

Employer benefits   

The first question that comes in mind is that why should an organisation take the pain to pay for the entire educational amount of an employee? Besides the employee who avails the benefit, the employer too gets benefited in the following ways-

  1. Employers are interested in ensuring that their employees have the proper information and talent that will help them succeed at work. By earning a professional degree in a field associated to their work, an employee gets the chance to become a better employee.  In Addition, employees are more likely to remain loyal to a company when they are depending on their employer to bear their educational costs. Employers often get more employee loyalty when tuition reimbursement for the education of the employee is provided by them.
  2. With science and technology developing in leaps and bounds, more and more employers are becoming aware of the fact that better skills of the employee will increase there own productivity.

Who provides the tuition assistance?

The employer’s tuition assistance gets administered through the human resources department of the organisation. Sometimes it is also included as a part of an employee’s benefit package. In addition to compensating for the college tuition fees and the expenses met for buying the books, the human resource department also provides the opportunity to integrate desirable credentials with future career plans. These credentials are used in considering promotions and hikes for the candidate in the future. Employees who availed tuition assistance from employers to complete their professional or other higher degree courses also receive a tax discount of up to $5,250 a year.

Employee’s benefits

Besides the employers, the employees too are benefited from this program-

  1. The employees get the chance to horn their skills.
  2. In cases where the courses done by the employee is related to the job, he is also paid half the salary till he completes his course to rejoin the work place.
  3. The employee need not have to search for a job after he completes the course. He gets to rejoin a known work place.
  4. When an employee takes an educational assistance from the employer he also gets a tax reduction. So indirectly he gets to save money.
  5. His credentials get improved and he might get better job offers.
  6. The educational qualifications added to his existing curriculum vitae make him qualify for further increments or promotions in his company.

Restrictions put by the company

While the employers’ tuition assistance is a win -win situation for both the employer and the employee but before the employee avails the benefits of the program he needs to keep in mind certain restrictions that the company might pose in front of him-

  1. Sometimes the company bears the cost of the classes that are related to their job only. In case the student takes classes outside the curriculum then he needs to prove that the courses were an integral part of the main course.
  2. In case the employee has to discontinue the class for some reason then he needs to repay the entire money to the organisation.
  3. Some employers are also specific in providing financial benefits to graduate level courses.

The employee has to sign an agreement that he will rejoin the company after the completion of the course.


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