What is Tuition Reimbursement? - Definition & Overview

Instructor: Elisha Madison

Elisha is a writer, editor, and aspiring novelist. She has a Master's degree in Ancient Celtic History & Mythology and another Masters in Museum Studies.

Tuition reimbursement is a benefit that many large employers have for their employees. This lesson explains what tuition reimbursement is and how it is used.

Tuition Reimbursement

Have you recently started to look into college or business school? Like many, you may be surprised by how expensive higher education can be. Tuition costs can make it difficult to afford school, which is why many companies are looking into helping their employees. Companies like Starbucks, Chick-Fil-A, and Sheetz are just a few that have started doing this. Tuition reimbursement is usually a benefit that is offered by larger companies. Companies that offer this benefit will either have a set amount or percentage they will pay for your education per year.

How It Works

Tuition reimbursement policies can vary from company to company, but most companies reimburse your tuition costs, which means you pay for the tuition and then receive reimbursement after course credits are completed or a degree is earned. It is very rare for a company to pay for the course or degree out of pocket before you complete it. However, some companies will pay for books. So you will have to take the course first and pass, before you will be reimbursed.

Reimbursement policies also vary. Some companies cut a check for the percentage or amount they are willing to pay, some add it to your paycheck amount, and others can give it back to you in stock shares, so make sure you know what your company offers. Every company works differently, so reimbursement plans will also have different requirements and obstacles to overcome.

Remember that tuition reimbursement is taxable income, so make sure to keep this in mind just in case you have concerns about your personal tax bracket. Additionally, also make sure to check with your employer to see if you pay a small amount out of your paycheck for this benefit. Much like dental insurance, some companies will charge you a monthly amount for the benefit.

Standard Requirements

Tuition reimbursement takes some work to get. It is usually not as simple as taking a full load of classes barely skimming by with D's and C's and then giving your grade report to your office. The following are some of the standard requirements.

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