How Does Tuition Reimbursement Work with Financial Aid?

Instructor: Jordan White

Jordan has been a writer, editor and Web researcher for educational publications since 2010. He holds a bachelor's in English from Western Michigan University.

Tuition reimbursement is a benefit some employers offer that can help employees pay for their college education. Learn how this benefit works and how it can be used alongside financial aid.

Tuition Reimbursement and Financial Aid

Tuition reimbursement is a benefit some employers offer in which the employer agrees to pay for a certain amount of the employee's tuition. The amount offered by the employer will vary, but because the federally allowed maximum for tax-free reimbursement annually is $5,250, many employers will not offer more than this amount. So, can students use financial aid to help cover additional costs that exceed what the typical employer may offer? The answer is yes, tuition reimbursement and financial aid can be used together. However, there are a few things that every student should know when using both tuition reimbursement and financial aid.

It's important to note that the amount of tuition reimbursement a student receives from his or her employer must be reported when the student applies for financial aid. Tuition reimbursement counts toward the total financial sources of the student, so this amount will be considered when the amount of aid to be awarded is determined. As a result, tuition reimbursement could mean that a student receives a lower amount of aid than they would have without it. In some cases, tuition reimbursement could also mean that students do not receive financial aid benefits at all, and if students receive an excess of financial aid, it could even result in having to pay back some portion of already received funds.

How Tuition Reimbursement Works

There are three primary ways that a student will be able to set up payment through tuition reimbursement.

  • The student may arrange for the school to charge the employer directly.
  • The student may supply the school with an official document from the employer stating the employer's intent to pay at a later time, such as the end of the semester or end of the academic year. This would defer the payment of an agreed-upon portion of the tuition until that time.
  • The student may pay the tuition out of pocket and be reimbursed by the employer at a later time.

It is important to consider that some employers might only reimburse students under specific circumstances, such as the successful completion of a course or entire academic year, or only for courses where a certain grade level is achieved.

It is also important to note that many financial aid programs will only grant aid to students who are enrolled at least half-time in college courses. This could affect the number of courses that the student enrolls in, and could therefore affect the amount of the tuition and possible out-of-pocket expenses.

Alternative Affordable Education Solutions

Tuition can be costly, and even with tuition reimbursement and financial aid, students may end up paying thousands of dollars to further their education. Study.com offers a wide variety of online education resources, including credit-granting courses that can allow students to transfer credit to thousands of universities. This credit can be earned at the student's own pace and for a fraction of the cost of a traditional college or university tuition.

Learning About Financial Aid

Have questions about where to start with financial aid? Learn about financial aid and answer questions you might have with these Study.com resources.

What is Financial Aid? - Requirements & Sources

Do I Qualify for Scholarships or Financial Aid?

FAFSA Tips: How to Apply for Financial Aid

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