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How Does Tuition Reimbursement Benefit the Employer?

Instructor: Ori Gold
Many employers profit from offering tuition reimbursement or tuition assistance programs for their employees. Learn about these advantages and get information about how Study.com can help.

Tuition Reimbursement Benefits for Companies

Some of the most successful companies out there (Apple, Google, and Starbucks to name a few) have one thing in common: tuition reimbursement programs. This might seem contradictory. After all, why would companies benefit from spending money on their employees' education? In fact, employers benefit just as much as employees do from tuition reimbursement programs. But what are these benefits, exactly?

Attract Top Talent

It's no secret that smart, capable employees are highly coveted by employers. These talented workers have lots of opportunities when seeking employment, which means they can be more selective in which companies they work for. Competitive benefits such as tuition reimbursement can attract and entice job seekers. Offering tuition reimbursement shows high-value candidates that your company is invested in their professional and educational growth, and it might be the deciding factor between your company's job offer and a competing employer's offer.

Reduce Turnover

Since tuition reimbursement is such a valuable benefit for employees, they won't want to part with it. It fosters a sense of loyalty between the employee and the employer; since the employer is invested in the employee's development and success, the employee feels more invested in the company's success. This means employees stick around longer, reducing turnover and saving your company the costs of finding and training new hires.

As the employer, you also have the option of contractually enforcing this loyalty. Some companies require employees receiving tuition reimbursement to remain at the company for a specified length of time during or after their studies (e.g., 3-5 years), and if an employee fails to meet this requirement, they will be held responsible for the cost of tuition. While not suitable for all companies, it's a viable way to ensure low turnover.

Increase Productivity

Tuition reimbursement not only encourages employees to stay with your company for longer, but you'll have a more educated workforce as well. Depending on the types educational programs offered, employers could see development of their employees' soft skills (e.g., communication, critical thinking) or more specialized skills (e.g., statistical analysis, software development). Either way, you'll see improved performance and increased productivity from employees who are more knowledgeable, which translates to more value for your company.

Additionally, most tuition reimbursement programs are optional, meaning that it's up to the employees to take advantage of these benefits. This gives the company more insight into which employees are proactive about their own professional development, helping managers and executives make more informed decisions when it comes to growth paths for their direct reports.

Tax Breaks

Companies with tuition reimbursement policies for their employees also get tax benefits. Assuming the policies satisfy the Internal Revenue Service's educational assistance program requirements, the U.S. government will reimburse companies for up to $5,250 per employee per year in educational expenses. Additional government reimbursement may apply for employees taking courses specifically geared toward their job duties. These tax breaks allow companies to offer valuable benefits for their employees for a reduced and sometimes negligible cost.

How Study.com Can Help

With the rising price of education, corporations are looking for cost-effective and efficient ways to provide tuition reimbursement programs to their employees. While traditional brick-and-mortar colleges work for some companies, more and more are turning to online non-traditional providers like Study.com.

Study.com's Workforce College Accelerator membership offers online courses that your employees can take for real college credit. These courses are recommended for credit through the American Council on Education (ACE), and are accepted at over 2,000 colleges and universities nationwide. Course subjects range from business and computer applications to biology and history, and are divided into bite-size video lessons perfect for working professionals. Our success coaching enhances this experience, making it easy for students to determine and reach their educational goals. This amounts to an affordable and effective way for your institution to provide a compelling tuition reimbursement program.

For more information about how Study.com can help your company and employees succeed, reach out to us at sales@email.study.com.

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