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April 19th, 2024 · 3 min read

A simple guide to employee education benefits

What are education benefits for employees?

Types of education benefits

  • Loan repayment assistance
    Loan repayment programs help employees pay off outstanding student debt. Employers may provide direct payments toward employees' student loans, offer matching contributions or implement other forms of assistance. This type of education benefit is aimed at attracting and retaining talent, rather than promoting skills development.
  • Tuition reimbursement
    Tuition reimbursement is a type of benefit where employees get reimbursed for tuition so that they can pursue education while working. This is a popular choice among employers as it helps to attract and retain talent while also encouraging employees to develop their skills while on the job.

    Despite its popularity, the impact of tuition reimbursement is often limited due to lack of accessibility. Requiring employees to pay for tuition upfront presents a financial barrier that can deter them from participating. 
  • Scholarship programs
    Scholarship programs provide financial assistance for employees to pursue career-relevant continuing education and develop their skills. A company might award scholarships based on employee performance, financial need or other criteria. This benefit can help attract and retain talent and support upskilling and reskilling. However, since scholarships are awarded to select individuals, the impact of this type of program may be limited compared to other benefits that are offered to a larger pool of employees.
  • Career-aligned workforce education
    A growing number of leading organizations are transitioning to workforce education, which is a more accessible and strategic approach to employee education benefits. Managed through a third-party provider, workforce education solutions provide employees with access to debt-free education, without the limitations of traditional education benefit programs. 

cta button for tuition assistance report

The tax implications of employee education benefits

The business impact of employee education benefits

Attract growth-minded talent

  • Six out of ten workers at all levels say that the COVID-19 pandemic and its impact on the economy accelerated their need to acquire new skills.
  • 46% of employees say that they are likely to leave their current jobs for another opportunity if their employers don’t invest in upskilling and reskilling opportunities.

Boost employee engagement and retention

Encourage continuous skills development

Advance workplace diversity, equity and inclusion 

Optimizing your employee education benefits

  • Curate education offerings that are career-oriented
    Simply providing access to education isn’t always enough to reap the business benefits. That’s why it’s important to carefully assess the courses and programs available through your employee education program and ensure that they are relevant to the skills needed within your organization. This way, employees can develop their skills in a way that helps them move up or laterally within your organization.
  • Implement direct billing
    Direct billing is a payment model that allows academic institutions to bill companies directly for tuition. This is in contrast to the reimbursement model, which requires employees to pay for tuition upfront and wait for reimbursement from their employer. Direct billing provides a more accessible option that takes the financial burden off employees and encourages greater participation.
  • Get rid of clawbacks
    Clawbacks require employees to stay with the organization for a certain period of time, or risk having to pay back money that's been awarded towards their education. This can discourage employee participation in education programs. Consider removing clawback rules to foster a more positive employee learning experience.
  • Prioritize employee accessibility
    Education might help you attract talent, but long-term business outcomes like retention won’t materialize unless employees take advantage of the benefit. When strategizing your education benefits, consider eliminating common barriers to participation and learning.

    This includes things like simplifying the application process for education benefits, implementing direct billing to ease financial stressors or making sure you offer online learning options so employees can have more flexibility to participate.
  • Measure, measure, measure
    Many employee education benefits lack sufficient performance-tracking capabilities. Now more than ever, HR teams face increasing pressure to demonstrate the value of their investments. Consider how you can leverage technology in your favor to help track KPIs such as employee participation, completion rates and impact on retention. 

Beyond a benefit: Career-aligned workforce education

You can address talent development challenges