July 5, 2017
According to Business Insider, the cost of a college education has increased 260% over the past 34 years. This steep increase has made it difficult for families to pay for an undergraduate degree without taking on costly loans. This means there is often even less money available for an advanced degree. However, loans may not be the only option.
Does your company offer education benefits? Tuition reimbursement? According to a survey conducted by the International Foundation of Employee Benefits Plans, as cited in Fortune Magazine, 83% of companies offer some type of educational reimbursement benefit. Companies include this in their benefits packages to entice talent and keep it. In fact, in a 2015 survey conducted by EdAssist, 60% of respondents noted they would choose a company that offered professional development over one that offers consistent pay raises. In drilling down a bit more, one in two Millennials said they “expected an employer’s financial support in paying for further education.”
If you have this benefit, and you have not earned an advanced degree, then you should heavily consider it! There are a few things you should know:
The IRS caps tuition reimbursement at $5250 per year. This means that any tuition dollars reimbursed over that amount must be taxed as compensation, therefore plan accordingly.
- Many employers restrict the types of courses and programs they will consider for reimbursement. For example, if you are a Benefits Manager, it is unlikely your company will pay for you to earn an MFA in Creative Writing.
- Some companies may require a minimum grade to reimburse you, i.e. you can’t earn a D and expect to get reimbursed.
- There may be a time worked requirement, i.e. you must have worked for the company for a minimum of one-year before you are eligible for tuition reimbursement.
The Human Resources Department will be able to outline the company’s policy and answer your specific questions about your benefits.
Education reimbursement is a great benefit – one you should heavily consider. Even with the tax implications, you can earn an advanced degree for about 25% of the posted tuition rate (could be less depending on your individual tax filing status). Earning an advanced degree will help you to empower your future!
Anne Converse Willkomm
Director of Graduate Studies