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What is a Tuition Reimbursement Program?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 27 November 2016
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A tuition reimbursement program (TAP) is a program through which a company pays for part or all of an employee's tuition. There are usually a few strings attached to the program, since the company wants to make sure that it is making a sound and sensible investment in an employee's education. Such programs may be offered at large companies and government agencies, and sometimes a company which lacks a formal program for tuition reimbursement may agree to help out an employee by special arrangement or by providing scholarships to worthy employees.

In a company which has a tuition reimbursement program, the company wants to encourage employees to pursue professional development. Some companies limit the types of education they will pay for, expecting employees to take training and classes relevant to the type of work the company does, or to take classes which can lead to a higher position in the company. For example, a company might pay for someone to get an MBA with the goal of retaining that person and creating an opportunity for advancement.

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Other companies may feel that education in general is enriching, and they may provide tuition reimbursement for any reasonable scholastic pursuit. These workplaces may feel that having an educated workplace is valuable and important, and that they will be able to provide better service with more educated workers. Companies may also pay for things like language training to provide bilingual services, or training on specific types of equipment to add new skills to the working environment.

Employees enrolled in a tuition reimbursement program usually need to make a certain grade point average, and they cannot drop out of school. If they fail to meet these standards, they will be expected to repay the company, and they may also be required to pay if they quit working while school is in session or if they quit shortly after school ends.

Some of the money provided under a tuition reimbursement program is not taxable. In the United States, for example, up to $5,250 United States Dollars (USD) is not taxable. Some companies cap their contributions at the taxable limit, while others will pay more, with employees understanding that they will need to pay taxes on funds in excess of the limit. The tax-free status of funds under a tuition reimbursement program is designed to act as an incentive for both employees and companies who wish to engage in such programs.

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drtroubles
Post 4

@lonelygod - At my company taking the tuition reimbursement program comes with a bit of a catch. For every class your helped with you have to agree to stay with the company on contract for so many years. For a reimbursement on a full degree program, you're looking to stay with the company for at least seven years.

I think if you sign up for a tuition reimbursement program you really need to read all the fine details on the conditions on what you're expected to give back to the company. Nothing is free in life, so I think if you remember that you'll do OK.

lonelygod
Post 3

The company I work for has been offering to cover student tuition if the course you are taking directly relates to your job and will benefit you in the office. I think this is a great way to help employees improve their skills as without it many would not want to get into a student loan program.

I think one of the biggest problems with student tuition, especially if you are already in the workforce, is that it is expensive and no one wants to accumulate more debt.

I feel that smart employers offer tuition reimbursement for their employees, as they encourage them to improve and do a better job for the company.

oasis11
Post 2

@Suntan12 - These tuition assistance programs are a good option for some people; however, if you are a teacher you are forced to work in the public school system which may not be where the student would like to work.

I think that you really have to consider that three years is a long time and it may be better to forgo this loan forgiveness in order to have a choice of places to work. I say this because a friend of mine regretted taking this option because as a new teacher she was placed in a really tough school that was in a bad neighborhood and was also far away from her home.

She hated every minute of it and to her if she had to do it all over again she would not have participated in the program. It is a good idea, but it is not for everyone.

suntan12
Post 1

I wanted to say that many government programs offer tuition assistance programs for people interested in the teaching. I know in Florida there is a loan forgiveness plan that allows a student that has graduated from an accredited college or university with a BA in education that also agrees to work in the public school system for three consecutive years will get a tuition waiver and will not need to repay their student loans.

I know that a local hospital also offers a tuition assistance program that is similar for students that successfully graduate from a nursing program. The hospital not only offers placement upon graduation, but they will also pay for the nursing student’s junior and senior

year of college tuition.

This really is in response to the nursing shortage that many hospitals are experiencing. I also think that a similar program should be offered for doctors because there is a huge shortage of doctors and a tuition assistance program like this might make more students consider the profession.

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