June 16, 2016
Graduate school is expensive. That said, not everyone has the luxury of being able to be a full-time student. If you’ve made the decision to go for a higher degree while continuing to work full-time, you should see if your employer offers tuition assistance or tuition reimbursement. If your company does have a tuition reimbursement plan, or if you’ve talked them into offering you one, the next step is knowing your rights.
There are very few laws that govern employers when it comes to offering tuition assistance or tuition reimbursement to their employees—and any laws out there largely concerns taxes.
* For those that are curious, employers can take a tax deduction of up to $5,250 per employee. That amount is not considered income for the employee — anything above and beyond that amount is considered taxable income for the employee.
The rest of the federal law on Educational assistance programs gives broad discretion to employers when it comes to creating tuition assistance programs. However, it prohibits discrimination in determining eligibility.
So what will you typically find in a tuition assistance/reimbursement plans offered by your employer?
Many companies will limit who is eligible for tuition assistance to employees that have worked for the company for a set period or, in the case of a company with a wide-range of positions, the tuition assistance will be limited to certain employees (i.e. the company offers tuition assistance for those seeking MBAs only or those in a specific department). As long as the policy doesn’t violate any state or federal nondiscrimination laws, the company is free to determine eligibility as they wish.
Basically, your employer wants a promise to get a return on their investment. If they’re paying for you to pad your resume, they want to see the benefits of that, for at least a while. You’ll be offered the reimbursement in exchange for years. You’ll have to determine for yourself if the offer is fair.
If you agree to work for your company for at least two years after completing your degree but leave after one, the agreement you sign to get tuition assistance/reimbursement is probably going to include terms detailing how much you’ll be paying back. How much will vary. Some companies could ask for 100% and others might set up a per diem based on how long you stayed.
You’ll need to read your agreement with your employer because while your school may require electives, your employer might not reimburse you for non-required courses as you pursue your MBA. It’s important to check exactly what courses you are eligible to be reimbursed for under your agreement.
Some companies may require you to get an A to get 100% reimbursement for the course. They may set up different reimbursement levels based on the grade achieved. You should know these details when determining how heavy a course load you want to take on while also working full-time.
You can see an example of a detailed tuition assistance policy that is offered by the University System of Georgia for its employees here.
Taking advantage of your employer’s tuition assistance/reimbursement plan requires careful review before signing the agreement. This agreement is a contract and your employer can and will seek to enforce it if you break the terms. Because it’s a contract, federal and state laws don’t get too involved when it comes to the details— so if you agree to your employer’s terms, they’re binding.
Graduate school is a big financial undertaking. You don’t want to end up paying back student loans and your (possibly former) employer. Read your employer’s policy closely and weigh your options before agreeing to anything. If you’d like an attorney to review your employer’s policy to better inform you of your rights, contact Parks, Chesin & Walbert, P. C. today at 404-873-8048.