If you work, you (or your children) may be eligible for financial aid from your current employer in the form of tuition assistance. The IRS specifies that employers can set aside $5,250 in tax-free funds each year for every employee. However, different companies work in a variety of ways, if they offer tuition assistance at all. Make sure that you ask Human Resources the right questions and know their rules about financial aid before diving into your education.

Tuition Assistance for Employees

Some employers offer educational benefits to their employees and/or their children. They may subsidize their bachelor’s or master’s degrees or certificate programs. To receive these benefits, your current employer (or your family member’s employer) must offer a tuition assistance program. After being accepted into a program, you’ll have to begin paying tuition. Some employers will directly pay the tuition bill, while others require the employee to make an initial payment and file for reimbursement after grades come in. Many have GPA requirements, and tuition reimbursement may be based on grades (in case you needed an extra incentive to get A’s).

Not only may good grades be required for full reimbursement (up to $5,250), but employees using tuition assistance for themselves may also have to pick a major or classes that are related to their current field of employment. Be aware, also, that an employer may require you (or your parent) to stay with the company for a certain amount of time after providing tuition assistance. This is the employer’s safety net since it will be spending company money on tuition. It wants to reap the benefits of an employee’s higher education (or lasting commitment to the company) just as much as you do. Contact your (or your parent’s) human resources department to learn if employer tuition assistance is an option for you. Be sure to also ask about employer-sponsored scholarships.

Questions to Ask a Human Resources Representative

  • Who is eligible for tuition assistance benefits? Are children of employees eligible?
  • Are these benefits applicable to undergraduate and graduate courses?
  • Can the courses be taken online?
  • Must the courses be taken at a certain participating school, or can they be taken anywhere?
  • What is the maximum amount of tuition assistance that an employee and/or his or her family can receive?
  • What percentage or lump sum does the employer pay? Is the employee responsible for the rest?
  • How is tuition assistance paid out? Does the employer pay the school’s bursar or financial aid office directly? Does the employee pay the school upfront and apply for a reimbursement from work? If so, with whom does the employee put in a reimbursement request?
  • Must the employee maintain full-time employment status while participating in the tuition assistance program?
  • For how long do employees need to work at the company to receive these benefits?
  • Are employees required to resign their contracts or continue working at the company for a certain number of months or years after participating in the program?
  • What are the consequences of leaving the job before you complete the program? Who pays?
  • What grade or GPA is necessary to continue receiving tuition assistance?
  • What happens—and who pays—if you don’t pass a class or if you don’t meet the GPA requirement?
  • How long do you have to complete the class(es) or degree? What happens—and who pays—if you don’t meet these requirements?

Page last updated: 12/2016