The Ins and Outs of Tuition Reimbursement and Loan Forgiveness
Are you dying to go back to school, but can’t see how you can afford it? You may want to begin your college education, finish up a degree, or perhaps take a few Spanish or Computer Science courses you know will help you in your personal and work life. It may sound surprising, but some employers might give you a raise just so you can begin attending classes again. Other government employers might take some or even all of your student loans off of your hands and leave you debt free. It may sound like wishful thinking, but in fact, these are some of the incredible perks many companies offer their employees. Alongside health care and retirement benefits, Tuition Reimbursement and Loan Forgiveness are two major employer perks you need to be aware of when job hunting!
What is Tuition Reimbursement?
Simply put, Tuition Reimbursement is a program many companies offer to their employees in which the company reimburses some or all of the tuition fees their employees spend on education. Tuition Reimbursement is a classic win-win scenario. The company gets a better trained, more educated, and often more loyal employee, while the employee receives a subsidized education that may achieve a personal goal and without doubt makes them more marketable in the workforce.
"Being a part of a Tuition Reimbursement plan at work is like getting a raise two times over."
Not only is it extra, tax-free money (the IRS allows up to $5,250 of tax-free tuition reimbursement a year), but it results in a more educated and more qualified employee, which gives grounds for additional raises during a worker’s career.
How Does Tuition Reimbursement Work?
Every company that has a Tuition Reimbursement program offers different amounts of money towards school and different conditions for participation in the program. Make sure to ask these three questions when considering the different Tuition Reimbursement programs companies offer:
- When and how will your tuition be refunded? Will your company pay your school directly or will you be responsible for up-front tuition payments, with your company reimbursing you at a later date? Schools are often very accommodating for students on Tuition Reimbursement plans. For example, University of Phoenix defers student tuition payments for up to 60 days before classes start, while USC requires that 25% of tuition be paid at the beginning of classes, with the rest being paid at the semester’s end. This buys students a little time to pay their tuition up front and gives employers time to review and reimburse tuition payments.
- What academic standards must you fulfill in order to be reimbursed for your tuition costs? Often, there is a minimum GPA or course grade that must be achieved in order to qualify for reimbursement. Depending on the circumstances, if you stop attending, drop a class, or receive a poor grade, your employer may not reimburse your tuition. In addition, some employers cover the costs of all classes at all levels (any associates, undergraduate, or graduate classes), while some companies only cover specific classes that are relevant to their business.
- What standing must you have with your company in order to qualify for Tuition Reimbursement? Some companies begin reimbursing your tuition on day one. Others require that you have been employed with the company for a short period of time (for example, a year) before qualifying. Non-salaried employees, such as part-time or hourly workers, may or may not be eligible for Tuition Reimbursement. Finally, most companies will require that an employee sign a contract to stay with the company for a certain amount of time after graduating (to prevent employees from receiving a free education and then negotiating a higher salary with a competitor or different employer). Tuition Reimbursement is one of the greatest employee perks around, but be sure to understand the ins and outs of your particular plan before signing on the dotted line; talk to both your HR rep and your Financial Aid Officer before enrolling in a Tuition Reimbursement plan!
Watch: Example of How
Tuition Reimbursement Works
Big Companies, Big Benefits
Check out the way Tuition Reimbursement works at a few top employers:
|Best Buy: the electronic outlet reimburses 100% of tuition on approved coursework with a maximum of $3500 per year for full time employees|
|Home Depot: the home improvement superstore reimburses 50% of tuition on approved coursework with a maximum of $5000 per year for all employees (starts on day one!)|
|Google: the internet pioneer reimburses tuition on approved coursework with a maximum of $12,000 per year for employees who are full-time students and carry a “B” average|
|Bank of America: the national banking giant reimburses tuition on approved coursework with a maximum of $5,250 per year for employees|
|Publix– the employee-owned grocery chain reimburses tuition on approved undergraduate major classes with a maximum of $2,250 per year for employees|
The above summaries of tuition reimbursement programs at cited companies are for explanatory purposes only and may be subject to change or error. Contact respective HR departments for further details.
But I Already Graduated!
What if you’ve already graduated, before learning of Tuition Reimbursment, and have a pile of loans just staring you down? Or, what if your current employer doesn’t offer a Tuition Reimbursement program? Well, there’s still plenty of good news on your horizon. Depending on where you decide to work, the government just might take those student loans right off of your hands with a Loan Forgiveness program.
What is Loan Forgiveness?
Loan Forgiveness is a program under which the government may cancel all or part of your student loans, depending on a few conditions. Usually, loan forgiveness is available to students who graduated with a specific degree and/or:
- Work full-time for a government agency,
- Begin a sustained career with a non-profit,
- Enlist in the military or volunteer program,
- Teach or provide health services in low-income/distressed communities,
- Or meet certain other criteria
Watch Some Of Your Loans Disappear
|Check out the Public Service Loan Forgiveness Fact Sheet!|
Because of your service in one of the aforementioned areas, under certain conditions, Uncle Sam will wipe your “loan slate” clean. Click on the loan forgiveness fact sheet to your right, then check out these great opportunities, which may offer loan forgiveness:
- Volunteer Work: Serving in AmeriCorps or the Peace Corps may result in partial loan forgiveness.
- Teaching: Teachers working in schools that serve students from low income families may qualify for loan forgiveness.
- Medicine: If you happen to be conducting clinical medical research or are a veterinarian working in an underserviced area, you may qualify for loan forgiveness.
- Other Opportunities: The Department of Education has all the latest details on employment tracks that may allow you to have your loans forgiven.
Check out iGrad's Resources to Pay For College
iGrad's got plenty of other resources you can use to find money to pay for college. As always, stay tuned to iGrad for all your financial needs, during and after school!
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