Get a Degree on the Boss's Dime
Employers are offering tuition perks to get and keep workers.
A tighter job market is bringing a valuable but often-overlooked benefit to a growing number of workers: the chance to head back to school on the boss’s tab. As the economy and labor market continue to improve, employers are facing stiff competition to attract and retain the best talent. As a result, some companies are ramping up tuition assistance programs in order to help employees pay for classes, certificates and degrees.
In June, health insurer Anthem announced a program that offers its 55,000 full- and part-time workers free tuition for an associate’s or a bachelor’s degree through College for America at Southern New Hampshire University. Fiat Chrysler Automobiles recently announced that it would pay for employees to earn their associate’s, bachelor’s or master’s degree through Strayer University. And earlier this year, Starbucks expanded its program to cover four years of undergraduate studies at Arizona State University, rather than just two years.
You may get more bang for your buck when your employer writes the tuition checks. Most companies still limit annual contributions per employee to $5,250, the IRS maximum for tax-free employer-provided educational assistance. But in an effort to stretch those dollars further, benefits managers are negotiating with large universities for a better deal on tuition than you would get if you were paying for classes on your own.
For example, Starbucks’ agreement with Arizona State University knocks 42% off the price of online classes. College for America, which has partnerships with more than 65 employers nationwide, including Anthem, offers online degree programs designed specifically for working adults for $2,500 a year or less, often covered in full or in part by the employers. “As universities roll out their online programs, more companies are going to create these partnerships,” says Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management.
Some of the newer tuition benefit programs ease the rules and restrictions of traditional assistance plans. For example, although many programs limit employees to career-related coursework, Fiat Chrysler and Starbucks both allow employees to select from a wide range of majors, including information technology and nursing. In most cases, employees must pay their own way and wait until the end of the semester to be reimbursed. But Fiat Chrysler and Verizon will pay tuition up front.
Still, potential students should study the fine print before stocking up on school supplies. Many programs reimburse employees only if they meet the company’s definition of academic success (often a B average or better), and some require employees who pursue an advanced degree to repay the money if they leave the company within a few years of receiving the benefit.
Just because your company’s not making headlines with a new program doesn’t mean it doesn’t have a tuition benefit. According to SHRM, 56% of employers offer financial assistance for undergraduate programs, and 52% have programs for graduate-level studies. So if you’re interested in taking a course or working toward a degree, it pays to ask your company’s benefits manager about resources that may be available.