Do You Qualify for Tuition Reimbursement?

Most people do not think of tuition reimbursement as financial aid simply because it is not one of the options financial aid officers discuss with perspective students. It is also not likely to be something that is available to full-time day students. However, it is a source of funding that can help offset the tuition costs for some select students.

What Is Tuition Reimbursement

Unlike grants, loans and scholarships, tuition reimbursement is not based on any qualifications a potential student can meet. It is also not a funding source that is available prior to the student entering the college or university. As the name implies, the student is reimbursed for the cost of tuition after he or she meet specific qualifications. Tuition reimbursement is not available to all students but only those who work for a company that offers it as a fringe benefit. While a few companies offer the benefit to the children of employees, in most cases tuition reimbursement is only available for employees of specific companies.

Qualifications for Tuition Reimbursement

While each company has its own set of guidelines for tuition reimbursement, there is one thing that doesn't change: the student must pass the course in order to be reimbursed. Some of the requirements you may need to meet include but are not limited to the following: 

  • The potential student must meet the company's preliminary requirements for reimbursement such as length of time with the company and the company policy on academic selection.
  • The student must pass each course for which the student is seeking reimbursement. Some companies require the student to achieve at least a "B" before they approve reimbursement, so you will need to clarify your company's requirements with your benefits representative.
  • The student must take approved classes. Some companies allow employees to take whatever courses they desire while others may only reimburse employees for courses that provide advancement potential in their current positions that may open within the company.
  • Some companies also require employees to remain with the company for a specific period of time after reimbursement of a course. Failure to remain with the company may cause the company to request reimbursement of those costs from the employee.

Disadvantages of Tuition Reimbursement

Unlike grants, loans and scholarships tuition reimbursement is usually taxable income for the employee. Your company may handle the taxes in one of two ways: reimburse you the entire amount of the class and add the reimbursement to your W-2 at the end of the year or deduct applicable taxes from the reimbursement in the same way they might deduct for a bonus check. There is an added disadvantage of receiving the entire reimbursement: you may have to pay more taxes at the end of the year.

Another problem with tuition reimbursement is the company still controls the classes for which they reimburse employees. This means you may not be free to take whatever courses you wish to take but are limited to those that fall within the company's guidelines. For instance, if you want to obtain a degree in English but work for a bank or other private employer, you may not be able to attend college under your company's tuition reimbursement program.

However, the advantages of tuition reimbursement definitely outweigh the disadvantages. You just need to make sure you know the company's policies before you make the decision to go to college and discover your curriculum choice does not fall within the company's guidelines for reimbursement.

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