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The pros and cons of employee tuition assistance

April 10,2011 by: Dallas Browne

Employee tuition assistance is one of the ways students can get their education financed. Unlike federal or private loans, employee tuition assistance is usually a grant that need not be repaid. However, it isn’t always the best option and depends entirely on individual students and companies. 

Convincing the employee 

It isn’t always easy to convince your employee to grant you tuition assistance. More often than not, employees are willing to invest that amount only when it is a question of increased productivity. If your higher education can bring value to your role in the workplace, you have a good case to make to receive employee tuition assistance. Several companies have their own scholarships too in order to help out employees with educational aspirations.  However, it needs tremendous networking and convincing on the part of the employee to really benefit from these scholarships, especially when huge sums of money are required. 

Pros of employee tuition assistance 

The biggest benefit of getting tuition assistance from employees is that you don’t have to pay it back. Loans are always a burden as far as students are concerned and in an unstable economic situation, it could lead to anxiety. If the financial burden is higher as is the case with top colleges, students might have to resort to part time jobs to keep up with the monthly interest payments alone. Therefore tuition assistance from employees comes as a huge sigh of relief for many students. Moreover, in most cases, the employee tuition assistance comes with a contract under which employees, turned students, will have the obligation to serve in the company for a few years. This ensures that a job is virtually assured after students complete the education. Given the recent financial turmoil and insecurity, such a scenario might be totally acceptable. In some cases, employees are even allowed to continue on the payroll, especially when they would benefit on their job with the higher education. 

The disadvantages 

There are some disadvantages with employee tuition assistance. The most pertinent problem is that it is ruled out when students are changing their career path. For example, an employee in technical role might not always get financial assistance for pursuing Masters in Business Administration. There are exceptions, but it isn’t the norm. In such scenarios, the number of options open to the employees planning to go for higher education with employee tuition assistance is considerably narrowed. Another major disadvantage lies in the contract with the employer itself, which can work both ways. Although on one side, the contract guarantees security, it could prove to be an avoidable situation in many cases. The best example is when a student adds tremendous value to his or her profile through higher education which can get them the best jobs in the industry. The contractual terms offered by employer prior to offering financial assistance are seldom attractive or matching the industry standards. Moreover, the obligation to continue in the same company for a few more years virtually challenges the career aspirations of an employee, turned student.

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