Introduction

Key Highlights:

  • Tuition reimbursement (TR) is a benefit some companies offer to help their employees pay for college or continuing education.
  • Through TR, employers cover part or ALL of the tuition costs after employees complete their desired college program. 
  • It benefits both, employees (career growth) and employers (skilled workforce, plus certain tax benefits).

Tuition reimbursement is an employer-funded benefit designed to help employees pay for their education. Employers cover part or all of the costs associated with tuition, typically after the employee has completed an approved degree program or certificate courses. This policy aims to encourage employees to advance their skills and education while improving their contributions to the company.

Note: Tuition reimbursement (TR) differs from tuition assistance (TA). With tuition reimbursement, employees typically pay for approved educational programs upfront and are reimbursed by the employer after completing the course. On the other hand, tuition assistance provides funds directly from the employer to the academic institution at the start of the program; these funds can be used to cover costs as they occur. For both forms of financial aid, the amount of funds offered can vary greatly with each employer.

A 2022 survey by Willis Tower Watson found that about 80% of large companies in the country offer some form of tuition reimbursement. Eligibility for tuition reimbursement can vary significantly by employer, but here are some general criteria:

Full-time vs. Part-time Employees

Most companies offer TR to full-time employees, but some may also extend the benefit to part-time workers. Full-time employees are more likely to receive higher reimbursement amounts or more comprehensive coverage.

Length of Employment Required to Qualify

Many employers require that an employee be with the company for a set period—usually six months to a year—before becoming eligible for reimbursement programs. This ensures the company invests in employees who are likely to stay longer.

Type of Courses or Degrees Covered

Employers typically limit tuition reimbursement to specific types of education:

Job-related Courses:
These are courses directly related to your current position or career path within the company, such as leadership training, business development, or technology skills.

Example: A senior team manager could be reimbursed for pursuing a specialized degree in leadership or management.

Degree Programs that Benefit the Company:
Employers often reimburse for degree programs that can benefit the organization, such as business administration, information technology, or engineering. Programs that align with the company’s industry or long-term goals are more likely to qualify.

Some employers may also mandate a certain attendance score or grade-point average.

Be sure to check your company’s policy and eligibility criteria for tuition reimbursement.

Tuition reimbursement programs usually follow a few basic steps, although each company may have specific policies. Here’s a general overview of how it works:

Enroll in Approved Courses

Employees must first choose courses or a degree program that meets the employer’s criteria. Typically, the program must be job-related or beneficial to the company in some way. For instance: A senior marketing professional may be reimbursed for pursuing a certificate program in digital marketing. 

In some companies, there may be a fixed budget in place for reimbursement. In this case, you would need to find an academic program within this budget or bear any additional expenses yourself. 

Pay for Tuition Upfront

After enrolling, employees pay for tuition and related costs. This often includes textbooks or lab fees but usually excludes other expenses like transportation, housing, meal plans, etc. The method of reimbursement payouts can vary with each employer.

Submit Proof of Completion

Once the program is finished, the employee is expected to share proof with their employer, such as transcripts or certificates of completion. Some companies require employees to meet certain grades or maintain a certain minimum attendance. 

Receive Reimbursement

If all requirements are met, the employer reimburses the employee for the agreed-upon portion of the tuition cost.

Most companies reimburse a percentage of tuition costs, with caps on how much an employee can receive annually. Reimbursement amounts can vary, and some employers cover 50% to 100% of the tuition fees.

Tuition reimbursement is a great form of financial aid that is often underutilized. Many employees aren’t even aware that their employers offer this aid. If you’re looking to make the most of tuition reimbursement, here are some pros and cons to consider: 

Benefits of Tuition Reimbursement (Pros)

Increased Earning Potential 

One of the biggest advantages of tuition reimbursement is the potential for career advancement, and higher earnings to boot. With additional education, employees can qualify for promotions and higher-paying positions, leading to long-term financial benefits. 

Enhanced Skill Set

Tuition reimbursement allows employees to gain new skills and knowledge relevant to their field, making them more valuable to their employer and increasing job security.

Reduced Financial Burden

By having tuition costs covered, employees can pursue education without taking on significant debt, allowing them to focus more on learning rather than the financial strain of paying for school.


Drawbacks of Tuition Reimbursement (Cons)

Might Have to Pay Additional Tax

In some cases, TR over a certain amount may be considered taxable income, which means employees could owe additional taxes at the end of the year. Consider discussing these possibilities with your employer or a financial advisor, especially if your company offers generous reimbursement amounts. 

Employment Commitments

Many companies require employees to stay with the company for a certain period after completing their education. If an employee leaves before that time, they may have to repay the tuition costs.

Limited Educational Options

Some employers may limit the courses or degrees that qualify for reimbursement, meaning employees may not have complete freedom to pursue the education they truly want.

Upfront Costs

Even with reimbursement, employees may still need to pay for tuition upfront and wait for the company to pay them back, which can create a temporary financial burden.

  • 76% of employees reported feeling more likely to stay with their employers because of tuition reimbursement benefits being offered. (Bright Horizons)
  • Most companies offer reimbursements after an employee has completed an approved educational program. The most common tuition reimbursement amounts fall within the $5,000 to $5,999 range. (IFEBP)
  • 47% of employers offered tuition reimbursement options to eligible employees in 2020. (Society for Human Resource Management)

Today, several companies offer some form of tuition reimbursement, although the criteria for eligibility and disbursement methods and amounts vary significantly. Here are 25 popular companies that are known to have tuition reimbursement programs:

Tuition reimbursement is a valuable benefit that helps employees advance their education while minimizing financial strain. For companies, it’s a smart investment that attracts talent, boosts employee satisfaction, and develops a more skilled workforce. So, whether you’re looking to enhance your current role or move up in your field, tuition reimbursement is a win-win for both employees and employers.

If you’re looking for a job, but still have academic goals you want to fulfill, check if the companies in your field offer TR programs.

What does ‘per calendar year’ mean for tuition reimbursement?

“Per calendar year” refers to the annual limit a company will reimburse for tuition costs. For example, if an employer offers $5,000 per calendar year, it means you can receive up to $5,000 in reimbursement from January 1 to December 31.

What is an example of tuition reimbursement?

An employee at Amazon could enroll in a business management program. After paying for the class, the employee completes it, submits proof to Amazon, and is reimbursed 95% of the program cost through Amazon’s “Career Choice” program.

What are the cons of tuition reimbursement?

Some downsides include:
– Employees often have to pay upfront and wait for reimbursement.
– There may be limits on how much an employer will cover per year.
– Some programs require employees to stay with the company for a set time after receiving reimbursement, or they must pay the money back.

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