If you’ve chosen to go to school to get a new career, or to increase your job skills in your current career, there are many companies that offer tuition reimbursement benefits. Below, we answer the top questions students have when it comes to getting reimbursed for their school tuition!
What is tuition reimbursement?
A tuition reimbursement is money provided from an employer to an employee, so the employee can pay for eligible education costs. Many businesses have added this as a company benefit for full-time employees.
Students often ask: are tuition reimbursements taxable? If the repayment does not exceed $5,250 annually, that money is tax-free to the employee. Any amount over $5,250 annually can be taxed by the IRS. Tuition reimbursements vary based on your company.
When is it available?
Education reimbursement benefits can be received either when you start working for a new company, or if you take an eligible course while employed at your current company. Sometimes reimbursements are provided up-front up to the eligible amount of tuition, but often they’re provided as monthly payments over the course of the year.
For example: in the commercial truck driving industry, it’s common for employers to offer tuition reimbursement to drivers as they begin work after completing their training. In this industry, disbursements are usually monthly, as long as drivers remain employed. In the event drivers separate from a company, the tuition reimbursement benefit ceases.
If your company offers tuition reimbursement, make sure you review the eligibility requirements, terms and conditions, and details of the company’s tuition reimbursement plan.
Which companies offer these benefits?
More and more companies are choosing to offer education benefits to employees. If employees are gaining new skills and feeling valued at work, it’s good for everyone involved!
To see if your company offers tuition reimbursement, contact your human resources department. You can also view a list of all the companies we’ve found that offer tuition reimbursement through the link below!
How can I apply a tuition reimbursement to my loan or school?
This process varies slightly depending on the company, so it’s important to speak directly with the human resources department where you work.
At most companies, the tuition reimbursement process usually goes something like this:
- Step 1: At orientation or on your first day, ask your employer if they will apply the tuition reimbursement or education benefits to a specific loan account.
Note: some companies will not link reimbursements directly to the your loan. In that case, it is best to set up auto-payments from your account to ensure that your loan is paid on time each month!
- Step 2: Provide a copy of your certificate of completion for the program, as well as the name of the company that provided your student loan, your loan reference number or account number, and your loan documents (Master Promissory Note, Final Truth in Lending Disclosure).
Hint: If you have a Climb loan, you can find your reference number as well as the loan documents in the Student Portal under “My Applications.”
Note: In some cases, companies who provide tuition reimbursement will request information directly from the school — like an account ledger and training completion certificate.
- Step 3: Sign a form where you agree that the reimbursement will be sent directly to your lender to be applied to your loan balance.
- Step 4: Focus on starting your new career, and let your employer and lender handle the rest!
At this point, your employer and lender will work together to apply the reimbursement to your account.
- Step 5: Make sure you still check in with your lender and monitor your account every month to ensure everything is working well.