Tuition reimbursement is a benefit offered by employers to pay back employees for continuing education expenses. Benefit eligibility and program details vary, and it is up to your organization to design and administer the program. The return on investment of a tuition reimbursement program can be significant. Tuition reimbursement drives higher levels of employee engagement, increases the knowledge base of an organization’s workforce, improves overall employee retention and rewards employees for hard work and loyalty. Tuition reimbursement promotes the shared responsibility between the organization and employee for professional development. Additionally, significant tax benefits are available by offering a tuition reimbursement benefit. When thinking about rolling out a tuition reimbursement program, consider the following things:

Employee Eligibility It is important to communicate program eligibility to employees. Eligibility factors vary and can include:

• Length of service

• Benefit program eligibility

• Employment status

• Position/Role

Benefit Level Determine a dollar amount of maximum reimbursement. Benefit levels can vary based on eligibility factors. This can be a fixed dollar amount or percentage of total expense. Note that maximum benefit levels for director level positions and above are restricted by IRS regulations.

Expenses Eligible for Reimbursement Decide what expenses are eligible for reimbursement. Some organizations reimburse only tuition while others reimburse books, class-required supplies, fees, and computers for online courses. Expenses typically not eligible for reimbursement can include parking, late registration fees and general school supplies. It is up to the organization to determine the eligibility of various expenses.

Educational Program Eligibility Most organizations stipulate that educational programs must directly correlate with the goals of the organization, an individual’s specific role or preparation for advancement within the organization. Eligible programs may include:

• Higher education degree programs (Associates’, Bachelors’, Masters’ and Doctoral degrees).

• Adult Basic Education (ABE) General Education Development (GED) and English as a Second Language (ESL) programs.

• Professional certification programs.

Eligible Educational Providers Organizations should determine which educational providers are eligible for reimbursement. For degree programs and individual courses, some organizations require that programs be offered by a regionally or nationally accredited educational provider, while others do not require accreditation for reimbursement. For certification reimbursement, some organizations require that the certification be provided by an agency that is authorized to grant certification.

Administration When administering a tuition reimbursement program, consider the following things:

• Who will administer the program?

  • There are several third-party administrators who will do this for a fee.

• How will eligible employees apply for the program?

• What is the application approval process?

• How do employees file a request for reimbursement?

• How will payment be processed?

• What happens if an employee separates from the organization?

If you are interested in developing a tuition reimbursement program, the first step is to explore what type of program will be the best fit for your organization’s budget, culture and goals. Once decisions are made, the program should be designed, documented as a benefit program and communicated to employees.

-SARAH HALL