Tuition assistance is a more common work perk than you might think: Eighty-five percent of large U.S. companies offer some kind of program to help workers cut higher educations costs, according to a 2017 study from human resources management association WorldatWork. Employers provide a median of $5,250 per year for undergrads and $10,500 for graduate students.
If you're taking a class or two each year while working full time, that could be enough to cover most of your college expenses.
"More and more universities are looking to create strategic partnerships with companies and organizations as part of a fellowship program or something similar," says Rutgers University professor Mark Beal, author of three books, including "101 Lessons They Never Taught You in College."
Starbucks, for example, started a tuition reimbursement program through a partnership with Arizona State University. Likewise, Amazon has pledged to help employees with up to $12,000 in education costs for employees who study certain fields, like machine tool technologies and aircraft mechanics.
There are also platforms that help companies contribute to student debt repayment plans, though those are less common. The Society for Human Resource Management estimates that only around 8% of employers contribute to student loan financial aid programs—although that's twice as many as a few years ago.
Experts say more employers are jumping on board because college assistance can be a win-win for both the employer and the employee. Companies get more qualified employees, and workers can position themselves for higher salaries and better roles.
"Workers who use tuition assistance have productivity that is above market levels," writes Peter Cappelli, a professor at the University of Pennsylvania's Wharton School, whose 2002 paper looked at the relationship between employers paying for tuition and productivity.
"Workers stay with firms longer in order to make full use of tuition assistance plans," he adds—and "lower turnover in itself is a source of cost savings for employers by reducing search and hiring costs."
Tuition assistance programs can make it possible for you as an employee to get a degree without shelling out a lot of money or taking on a ton of student loan debt.
Under IRS rules, the first $5,250 you receive each year in employer-provided educational assistance is excluded from your income. You'll pay tax on any benefit above that amount.
Whether you've already graduated or are looking for ways to pay for a degree before you start, here are some tactics you can try:
- Get details on existing benefits. If your company is among those that offer some kind of college partnership or tuition assistance, dig into the terms and conditions. You may be limited to certain courses of study or colleges. Pay particular attention to details around repayment: The company may not reimburse you for the cost of classes if you don't get good grades. And if you leave the company for a job elsewhere shortly after completing your coursework, they may demand that you repay them any tuition assistance you received.
- Sell your boss (or school) on the idea. If you can connect your current role to some sort of education program, try and marry the two. Even if you're already enrolled in school, Beal says you can approach the administrators and ask "if there is something you can create with them to serve up to your employer." Again, they may say no, but it's worth a shot to potentially save you thousands of dollars. If the school won't go for it, ask your employer instead.
- Negotiate for it. Many job seekers forget that everything is negotiable. So, what's the harm in asking for tuition assistance, or help paying for existing loans, when discussing your compensation? It may not fatten your paycheck, but it can reduce your monthly expenses.
- Apply to companies with existing programs. Tuition assistance can be worth tens of thousands of dollars over the course of a degree. That's a big incentive to find a job that can help you out. Companies are using tuition reimbursement and assistant programs as a recruiting tool, and there are hundreds out there with student debt programs.
Remember: The most important thing is to make sure it's explicitly clear, when trying to get some sort of aid out of your employer, that they will get something out of the deal, too.
The "critical element is to communicate to your employer the value and benefits they will receive in return," Beal says.
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