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February 29th, 2024 · 5 min read

The basics of employee tuition reimbursement

What is employee tuition reimbursement?

Tuition assistance vs tuition reimbursement

How does employee tuition reimbursement work?

  • The company reimburses the employee only up to a certain amount of money per calendar year, and the amount is sometimes based on grades earned. For example, if the employee receives an A average, the company will pay 100% of the maximum reimbursement amount. If they receive a B, the company will pay 80% and so on.
  • Tuition reimbursement benefits might apply only to specific courses or programs, which may need to be completed within a specific timeframe.
  • The employee receiving tuition assistance may be required to stay with the company for an allotted period of time before changing positions or leaving the organization altogether.
  • Offerings may differ depending on employee status. Some companies only offer tuition assistance to full-time employees. 
  • Offerings may be limited or tied to specific work. At some places, employees are required to enroll in courses or programs that are related to their work.

Does tuition reimbursement get taxed?

Can you make employees pay back tuition reimbursement?

The benefits of employee tuition reimbursement

  • Continuing education boosts employee performance
    A recent report found that 93% of CEOs who introduce upskilling programs see increased productivity, improved talent acquisition and retention, and a more resilient workforce.
  • Workforce education can improve retention and foster internal career mobility
    In one study, 76% of employees said that they were more likely to stay with their employer because of their tuition reimbursement benefit. Allowing employees to pursue debt-free education shows value in their long-term growth, which in turn encourages them to stay and grow with their employer. 
  • Attract growth-minded talent
    Education benefits signal to prospective job candidates that your organization values its employees and is committed to their long-term professional development. This can be a powerful tool for attracting qualified job-seekers who are eager to learn and grow with your organization.

The challenges of employee tuition reimbursement

  • Policy restrictions
    The employee tuition reimbursement policy might have stipulations that are too difficult for employees to meet, discouraging them from taking advantage of the program.
  • Financial barriers
    A tuition reimbursement program might not actually make education more affordable for the employees – this is especially true if there’s a cap on the amount that the employee can be reimbursed. Educational expenses go far beyond tuition and often exclude costs like textbooks, obligatory school fees and loan interest, posing significant financial barriers for many employee learners.
  • Only applicable to the current position
    Employees pursue continuing education to make meaningful advancements or shifts in their careers. But some reimbursement policies will only fund education that is specific to the employee’s current position instead of the one they’re looking to grow into. This offers little incentive for the employee to commit to upskilling to advance or reskilling into an entirely different role within the company.
  • Lack of support for employees
    Providing access to reimbursable education is a great benefit, but many tuition reimbursement programs lack support to help employees make decisions. Without built-in support, employees might be overwhelmed by the range of options, or even lack guidance about applying academic credit they might already have to a new program.  

Going beyond tuition reimbursement

  • Direct billing
    We remove the financial burden from the employee by having academic institutions bill your company directly.
  • Employee learner support
    Employees have access to live, on-demand education advisors who answer questions and offer unbiased support based on their individual learning needs.
  • Easily measurable
    InStride’s user-friendly platform provides HR admins with access to real-time program performance insights and analytics.
  • Accommodates all types of educational backgrounds
    We offer programs and courses that accommodate previous learning experience across all educational backgrounds.
  • User-friendly learner platform
    Our easy-to-use technology platform allows learners to browse available academic courses and programs, as well as navigate eligibility requirements.

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