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How Does Employer Tuition Reimbursement Work?

Key Takeaways

  • Tuition reimbursement is when an employer agrees to cover a portion of an employee’s education expenses, such as grad school.
  • Your grades could impact how much your company reimburses you for tuition.
  • Some companies also require that you stay there for a certain number of years after receiving your degree.

By Stephen Sellner | Citizens Bank Staff

Do you have aspirations to go to grad school? If so, then you might be eligible for financial assistance, courtesy of your current employer, through their tuition reimbursement program.

Generally speaking, tuition reimbursement is an agreement between an employer and an employee where the employer reimburses a portion of that employee’s education expenses — tuition, books, or other expenses. This is particularly common in business when employees pursue an MBA. Tuition reimbursement can work in concert with any supplemental scholarships or financial aid you receive from the school or other sources.

Seems pretty great, right? It can be, but there’s more to know about tuition reimbursement. Check out the answers to some frequently asked questions below.

Why would an employer offer tuition reimbursement?

Companies see tuition reimbursement as an investment in their employees.

The thinking is simple: By continuing your educational development, you, the employee, will improve your job performance. In turn, the employer will be getting an individual with an increased skillset who's ready to deliver better results.

It’s a win-win for you and your employer.

What stipulations are there?

There are usually two stipulations. First, companies could require a passing grade to receive reimbursement, while others tie the amount of tuition assistance to the grades you get in your classes. For example, your company might provide 90% tuition reimbursement for an A, 80% for a B, and 70% for a C.

Second, in return for tuition reimbursement, your employer might require you to stay for a certain number of years. That makes a lot of sense: Your employer just made a financial investment in your education; they want to reap some of the rewards. They don’t want you darting off to another company — especially a competitor — with all the knowledge you gleaned from your graduate program.

Your company could require a passing grade to receive tuition reimbursement for those courses.

Does your company offer tuition reimbursement?

The best place to find that answer is your Human Resources (HR) department. Some larger companies have partnerships with local colleges or universities, which could personalize your education to fit your company’s work. You might also be required to work at your company for a certain amount of time before you’re eligible for assistance.

If your company does offer tuition reimbursement, but there’s not a direct tie between your work and the degree or courses you want to pursue, you may have to do some negotiating with HR. For example, if you work as a paralegal, then it might be hard to sell HR on covering the psychology degree you’re pursuing.

Should you ask about tuition reimbursement programs when interviewing?

Of course! It can’t hurt to ask.

In fact, the availability of tuition reimbursement could be a major differentiator between one job or another, especially if a master’s degree is critical in your industry. It also shows your interviewer that you’re serious about the job and improving yourself.

What to remember

Tuition reimbursement is designed as a win-win for both the employer and employee. You get to expand your education and skillset while your company gets a more adept employee to help improve their business. Look at this benefit as a huge financial opportunity that can potentially fund your continued education and help progress your career.

And remember that tuition reimbursement is just that — reimbursement. This could mean you have to shell out the money first and then request reimbursement. So plan accordingly!

More information

Tuition assistance can only cover so much of your graduate school expenses. Need help covering the rest? Learn more about Citizens Bank’s student loan options for graduate students.

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