Did you know that some employers help their team pay off student loans? Tuition reimbursement is one of the most attractive benefits an employer can offer, especially for millennials. We live in a society where development and education are central to each person’s success.
Student debt is at an all-time high, with Time reporting $1.5 trillion in unpaid loans. While tuition reimbursement doesn’t help pay off previous student debts, it can help to encourage employees to continue their education. There are many benefits of offering tuition reimbursement, but let’s examine how it works first:
What Is Tuition Reimbursement?
Tuition reimbursement happens when an employer offers to contribute to freeing their team members of student debt by providing them with payments. This is usually on top of an employee’s salary, so you can see why this benefit attracts top talent. You can incorporate tuition reimbursement for your company’s defined benefit plan to offer a competitive package.
Many employees want to complete a degree or a specialist course but worry about the financial implications. With that, offering tuition reimbursement is an excellent way to build a stronger team and support your employees to develop.
How Does Tuition Reimbursement Work?
If an employee decides they’d like to continue their education, they can choose a course and receive a yearly payment from their employer. However, it’s important to know that as an employer, you should set guidelines in place to ensure your employees don’t take advantage of the program.
There are many organizations, such as FutureFuel, that help employers and employees work together to achieve freedom from financial debt.
You can choose whether you want to offer tuition reimbursement for courses that relate directly to an employee’s job role or concentrate on personal development. Offering your team members the chance to focus on their personal development can help to improve their productivity. When a company cares about the wants and needs of their workforce, their employees show higher levels of motivation.
What Requirements Should Be Incorporated?
When an employee continues their education, it’s important to motivate them, but also not let them take advantage of your generosity. These are a few requirements that you should consider adding to your tuition reimbursement program:
While some companies require their employees to maintain a consistent GPA, others reward them based on their grades. Working with a reward-based model can help encourage your employees to achieve high grades, without causing stress by setting a GPA requirement.
Field of Study
Yes — personal development is important but there’s no point in funding an employee’s education if their chosen course is irrelevant to their field. For example, if an individual working in IT could choose to do a Master’s degree in English Literature, it wouldn’t make sense for your company to fund it. but it would offer no benefit to your company.
If you’re willing to help your team pay for their education, then it’s fair that you expect them to offer their skills to your company for a set amount of time. If an employee leaves the company before this time, you should have a policy in place to remove your obligation to repay their funds.
Worrying about the costs involved is a common issue for employers when implementing a benefits package. This useful employee cost calculator to help you see how much money you’ll spend.
The Benefits of Offering Tuition Reimbursement
Tuition reimbursement sounds great for your employees, but how does it benefit you? The fact is: besides increasing employees’ motivation, these incentive programs have many advantages for employers.
More Prepared Employees
You can have the latest technology, and unique service but without a strong workforce, you won’t be successful. Employee experience is central growing your company, and offering tuition reimbursement shows that you care about your team and want to support their growth.
Investing in your staff’s education is one of the best things you can do as an employer. Introducing a tuition reimbursement program can help you build a workforce with a strong skill set, which will help to achieve your company goals more efficiently. Employee retention will improve, which means you can recruit less and spend time building your company.
If you are worried about the costs involved with the implementation of a tuition reimbursement program, I’ve got great news for you:
There are tax incentives in place to reduce the costs for employers. Most employers can offer reimbursement of up to $5,250 a year and can claim deductions on that amount. This means that with the tax breaks, you’ll only pay a small amount of money towards your employee’s education.
Should You Offer Tuition Reimbursement?
Taking all the benefits of tuition reimbursement into consideration, it’s clear that the advantages outweigh the disadvantages. In today’s competitive market, companies with talented staff members can move forward and work with their team to secure their stability within each industry.
It’s proven that companies that encourage their employees to think creatively can reap the rewards, so further education can help your team develop both professionally. Make sure you offer reimbursement for courses that are relevant to your field and encourage your employees with grading incentives.
It can take time to put a comprehensive program in place, but with the right guidance, you can create a plan that rewards your employees for their commitment to professional development. Work with your HR team to ensure you protect the company against students dropping out of college or leaving their job role and you can benefit from tuition reimbursement.