Considering going back to school, but aren't quite sure how you're going to pay for it all? The solution may be closer than you think. Many employers now sponsor tuition assistance programs. Typically managed through a company's human resources department, tuition-assistance programs can do more than save you money. They also offer you the chance to integrate your formal education with your future career plans.
So what help can you expect from your company? Support is often determined by government guidelines. According to IRS regulations, employers can provide up to $5,250 to each employee per year on a tax-free basis. Any additional employer tuition assistance is taxed, so many employers stay within the IRS limit.
To make the most of this assistance, however, it's important to know exactly how your employer's program works. Here are some common elements of employer tuition assistance programs:
GPA requirements. Most employers will require you to maintain a certain grade point average (GPA) in order to benefit from the tuition assistance program. Keep this in mind when considering how you will organize your class schedule. "Some employers will even manage their tuition reimbursements according to the student's semester or quarterly GPA," says Hilary Ward Schnadt, associate dean of University Center of Lake County. "They may pay 100 percent for an 'A' and lower percentages for lower grades."
Tuition payment / reimbursement programs. While some companies will pay your tuition bill directly, others will ask you to make the initial payment, reimbursing you at the quarter or the semester – after you have received your grades.
This means that your budget should be flexible enough so that you can pay that tuition money up front, without missing it. "We usually recommend that students in this situation save enough so that they can pay up to two semesters of tuition," Schnadt says. "That way they don't have to interrupt their coursework if their reimbursement checks are delayed. Some students even pay their tuition via credit card, collecting frequent flyer miles and then paying off the balance when they get reimbursed."
Major requirements. In addition to requiring that you maintain a certain GPA, your employer may restrict your choice of major to something related to your current or future position with the company.
Post-degree work. Thinking of changing jobs? Some employers may stipulate that you work for their company for a certain length of time after completion of the degree. If you don't, you may be required to repay their tuition investment in your education.
Company policies on books and materials. Some companies may foot some or all of the bill for your books and materials. This can save you a few hundred dollars over the course of the year.
Completion schedules. Your company might require you to finish your degree within a certain time frame. Be sure that you are aware of your company's degree deadlines as well as your school's.
Your employer's tuition limits and completion schedule might have you looking for ways that you can get through school a little more quickly and with less drain on your pocketbook. Alternative credit programs can be a good way to speed the degree process while staying within budget. Find out your school's transfer policies and check out your options. "University College will accept up to 60 credit hours from CLEP® (College Level Examination Program) tests or community college," Schnadt says. "This can sometimes be a good way for students to save both time and money."
So if you're looking to further your education, be sure to check all your options. You may find your employer is willing to invest in your future!