As the name suggests, employer tuition assistance is a program where the employer may either pay a part or bear the entire cost of college education. This is essentially a tool that is used by employers to attract and retain their employees. With the help of tuition assistance, employers can expect a certain level of loyalty from their employees and they can also hope to retain their employees for a longer period of time. This is an employee benefit that is provided by the employers and it is a win-win situation for both parties involved.
Tuition assistance may be extended to those individuals who cannot afford expensive college education. Employers provide tuition assistance in order to ensure that their employees increase their knowledge base. This can prove to be beneficial for their company or organization as well. Very often, employers pay for the entire course including tuition fee, books, lab fees, and other accessories and material that may be required for the course.
However, in some cases the employers may put a cap on the amount of tuition assistance that employees can avail. In such cases, the employers may pay for a certain number of classes or they may agree upon paying a certain sum of money each year towards tuition assistance.
While registering for their classes, employees generally pay for the tuition fees and books and this amount is then reimbursed by the employer after the receipts are submitted and after showing proof of earning a decent grade. In most cases, employees enrolling in a program will be expected to earn a ‘C’ grade or above in order to be eligible for tuition assistance. Very often, employees provide copies of their transcript in order to receive the tuition assistance from their employers.
In case the employer has to pay a huge sum of money as tuition assistance, the employee will be expected to sign an agreement, stating that he/she will return the tuition assistance in case they leave the organization within a stipulated time period. A percentage of the tuition assistance is waived off for each year the employee stays with the firm, following the utilization of the funds for tuition assistance.
There are a number of companies that promise tuition assistance for their valued employees. Sometimes, this is also mentioned in the employment contract as well. This is an attempt to attract and retain the best talent in the organization. Gaining additional knowledge and improving their knowledge base is absolutely essential and employees can expect to reach their career goals and move up in their positions within the organization. So, providing tuition assistance is beneficial to employers as well, as they can retain the talented employees within their organization.
Employer tuition assistance includes a number of employer-sponsored programs that are aimed at helping employees as well as their dependents gain college degrees. In most cases, these funds are not considered as part of the income and hence it is tax free. Employer tuition assistance programs are very popular with students who are pursuing an MBA.