How Does Tuition Reimbursement Work?

By Chris Kolmar - Feb. 3, 2021
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It’s no secret that college is expensive. Whether you’ve just graduated from high school or have been a member of the workforce for a while, this cost is a significant deterrent to many potential students, as it can be difficult to work and study at the same time.

The good news is that there are ways to pay for your education without compromising your job. Many companies offer support to employees who want to pursue a degree or technical education through tuition reimbursement programs.

What Is a Tuition Reimbursement Program?

A tuition reimbursement program is a benefit that many companies offer where your employer will pay for college or other educational courses.

This benefit can look vastly different from company to company, but it can be a great way to gain the skills and credentials you need to get a promotion or to reach your other professional goals without going into debt.

Types of Tuition Reimbursement Programs

There are many different types of reimbursement programs, so it’s important to get the details on your particular company’s benefits before you enroll in any classes.

One of the most common ways companies run these programs is that they reimburse you for each class you take after you take it, as long as you pass it.

This means that you’ll have to be able to front the money for your course, but if you only take one class at a time, you can use that same money over and over as you enter a cycle of paying for a class and then getting reimbursed.

Another method some companies use (especially smaller ones) is paying for the class upfront, and then if for some reason you don’t pass the class, you reimburse them.

This is less common, so don’t be surprised if your company doesn’t do this. If it does, it is nice for you, since you don’t have to front the money.

Requirements That May Come With a Reimbursement Program

Along with different reimbursement program styles, many companies also have different requirements their workers need to meet in order to be eligible for these programs.

It’s vital that you know what these are before you enroll in any classes so that you aren’t surprised by anything once you’re already in too deep to turn back.

  1. Minimum grades. Most companies won’t reimburse you for your classes if you don’t pass them. This all-or-nothing approach is understandable since if you don’t pass, they get nothing out of their investment.

    Other companies use a sliding scale to determine how much they’ll compensate you for a class. For example, if you get an A, you’ll receive the full amount, but you’ll receive a percentage of that total if you get a B and an even smaller percentage if you get a C.

  2. Approved programs. Most companies will want to make sure that they’re paying for a class that will be beneficial for them, whether that means making you better at your current job or preparing you for a role farther up in the company.

    Along those same lines, some companies will also want to approve the specific classes you’re taking or will provide you with a list of pre-approved courses, while others will just want to know that you’re studying something that relates to your position.

    Some companies will also have specific schools where they’ll want you to take your classes. This can be for many reasons, but some of the most common is knowing the course material or having a pre-existing arrangement with a particular school to give a discount to their employees.

    Other organizations won’t have any pre-existing preferences but will want to approve the school you choose.

  3. Commitment to the organization. Many organizations’ reimbursement programs require their workers to sign contracts to work for them for a certain number of years to make sure they actually get something out of their investment after they complete their classes.

    ROTC programs are a good example of this, as they pay for their members’ education. In return, students commit to serving in the military for a few years after graduation and undergoing training during college.

    Other companies have similar programs where they’ll pay for their workers’ master’s degrees as long as they commit to working for the company for a certain amount of time after they graduate.

Other Things to Keep in Mind About Tuition Reimbursement Programs

As the old adage goes, anything that seems too good to be true probably is, so it’s important to do your research to make sure you understand what you’re getting into before you jump in with a tuition reimbursement program.

Here are a few of the common caveats that come with these types of programs to be aware of and tips to follow to make sure you get to achieve your goals:

  1. Your company may only pay for tuition. College classes often have more hidden fees than an airline ticket, so make sure you have a solid understanding of what it will cost and how much your company will cover before you enroll.

    Some of the most common extra expenses include books, fees, and parking permits, which can add up quickly.

  2. Some companies have a cap on the total amount they’ll pay. Don’t assume that your employer is up for paying for an unlimited number of classes at an Ivy League school.

    Check if such a cap exists in your program. If you get to choose the school you attend, make sure you choose one that will get you the most bang for your buck.

  3. You can still apply for FAFSA and other scholarships. Even if your employer is paying for your classes, this doesn’t disqualify you from receiving financial aid from other sources as well.

    However, you do need to disclose the amount your company is giving you when you apply for FAFSA and other scholarships.

  4. If your company doesn’t offer a reimbursement program, you can present your case about why it would be valuable for them to offer one to you. Your employer wants to get as much as possible out of their investment in you as an employee.

    If you truly believe you could add more to the organization with further education and can communicate that to your superiors, chances are they’ll be willing to help you.

    Ask if you can present your case, and when you do, make sure it’s focused on helping the company as a whole.

    Be specific about how the particular classes you want to take will help you in your work, and be ready for some give and take on what they’ll do for you.

Three Reasons Why Companies Offer Tuition Reimbursement

It’s useful to know why companies offer tuition reimbursement if you are presenting your case and need ways to convince your boss or if you’re simply curious about why companies offer these programs.

To begin with, there are some benefits to these organizations that are important to understand:

  1. These programs get them more qualified employees. It costs a lot of money for companies to hire, onboard, train, and retain workers, and if they have the chance for their current workers to become more qualified instead of having to go through the process of finding and hiring new ones all over again, they’re likely to take it.

    It’s often less expensive for employers to pay for some classes than it is to undergo the hiring process again. Plus, they get the advantage of having someone who understands the company move into more advanced roles instead of an outside hire.

  2. Helps attract and retain highly top employees. It’s easy to forget that companies are competing for high-quality employees just as much as employees are competing for those same positions.

    Offering valuable benefits allows organizations to attract the types of employees they want, and tuition reimbursement programs are often highly sought after by workers who have a drive to improve and grow, something that is very valuable to an organization.

  3. The tuition is tax-deductible. Companies have to pay payroll taxes on all of their employees’ paychecks, so the opportunity to put their money into something that makes their employees more effective and is tax-deductible is attractive to many of them.

13 Companies That Offer Tuition Reimbursement

This is by no means an exhaustive list of the companies that offer tuition reimbursement programs, but it will give you a good place to start if you’re looking for a position that offers this.

  1. Colleges or universities. Many colleges and universities give their full-time staff members either highly discounted or completely free tuition. Depending on the school, they might also pay your fees and room and board.

    There is even a group of universities that participates in a Tuition Exchange program that extends this offer to their staff even if they attend other schools in the network.

  2. Home Depot. Whether you are a full-time or part-time employee, the Home Depot wants to support its workers in getting any degree, including technical degrees.

    Employees can choose to receive a discounted rate from one of the schools that Home Depot has partnered with, or they can choose their own school and be reimbursed for tuition there, as long as the company approves their class choice.

  3. Lowe’s. For their full-time employees who have worked there for at least one year, Lowe’s offers up to $2,500 per fiscal year in tuition reimbursement.

    Employees can choose any program they want if they’re pursuing an associate’s or bachelor’s degree, but the program has to be relevant for their current or future work at Lowe’s if they are pursuing a master’s or doctoral degree.

  4. UPS. No matter how long they’ve been working for the company, part-time UPS employees can earn up to $25,000 in tuition reimbursement.

    UPS also offers many training programs designed to help entry-level employees move up in the company in the future.

  5. KFC. One of many fast-food chains that offer some kind of tuition reimbursement program to its employees, the KFC Foundation runs the REACH Educational Grant Program, which allows all of their workers to apply for money to put toward their college education.

  6. Geico. Geico’s tuition reimbursement program is generous, offering eligible, full-time employees up to $5,250 each year to go toward tuition, fees, and textbooks.

    They also offer a number of training and licensing programs to their employees for free, ranging from business management to Microsoft Office.

  7. Starbucks. For those employees who haven’t received a bachelor’s degree before, Starbucks offers full tuition coverage at Arizona State University. This is an online program, which means workers won’t have to worry about relocating.

  8. Amazon. Whether the degree you want to pursue has anything to do with Amazon or not, if you’re an hourly employee who has worked at Amazon for a year or more and you want to pursue a degree in a high-demand occupation, the company will cover 95% (up to $12,000 over four years) of your tuition, fees, and textbooks upfront.

    Their approved degree programs can and do change, as Amazon uses the U.S. Bureau of Labor Statistics’ list of high-demand careers as its reference point. Amazon also offers the classes at its own facilities, making it all the more convenient for employees to participate.

  9. Walmart. Walmart and Sam’s Club employees are eligible for a tuition reimbursement program starting on their first day of employment. This program covers all tuition, fees, and textbooks for employees who choose to attend a school within Walmart’s network.

    Employees are only asked to pay $1 a day, and they can pursue a university degree, skilled trade education, or professional certificate for that amount. The company also provides free high school programs to its employees, as well as support systems for everyone who chooses to further their education in any of these ways.

  10. Disney. Disney’s reimbursement program is unique since they house students in their facilities and hold the classes in-house.

    The courses are more general in nature, aimed toward helping people pursue any career, but they can count toward college credit, making this a great gap year option or opportunity to improve your professional skills.

    Students will also be paid as interns at Disneyland or Disney World, where they’ll be able to put their new skills to work. As interns, they’ll have to work weekends and nights whenever necessary, but they won’t have to worry about coordinating their work and class schedules since Disney creates them all.

  11. Boeing. This company’s program has no annual limit on how much tuition assistance they’ll provide for their employees, as long as they’re taking courses in science, technology, engineering, or mathematics. They do have many options for schools where you can take those classes, though.

  12. T-Mobile. T-Mobile, like many other carrier services, pays for its employees’ courses that they pass. They offer up to $5,250 a year in assistance for eligible full-time employees and up to $2,500 for eligible part-time workers.

    The company has even partnered with a handful of schools that offer T-Mobile employees full tuition, so be sure to look into that if you want to take advantage of this program.

  13. BP. BP pays 90% of the cost of their employees’ courses, as long as the school and classes have been approved and the employee passes the class. The program includes both vocational and educational courses, opening up a world of opportunities for employees who want to better themselves and advance in their careers.

Never miss an opportunity that’s right for you.
Chris Kolmar

Author

Chris Kolmar

Chris Kolmar is a co-founder of Zippia and the editor-in-chief of the Zippia career advice blog. He has hired over 50 people in his career, been hired five times, and wants to help you land your next job. His research has been featured on the New York Times, Thrillist, VOX, The Atlantic, and a host of local news. More recently, he's been quoted on USA Today, BusinessInsider, and CNBC.

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