Waiting for tuition aid benefit

Q: My new employer offers a tuition reimbursement program. I started working here in January, 2013. I was under the impression that this program will start immediately. Now, two weeks in, I discovered that the program has a six-month waiting period. I have just enrolled in classes expecting to be reimbursed for these classes. Do you know if this is typical?

A: Congratulations on furthering your education. Usually employers have some type of waiting period for tuition reimbursement programs. Six months is not unusual.

Employers often have other requirements for this type of benefit. Some employers limit this benefit to full-time employees. It is also common for employers to have a passing grade requirement for reimbursement. Other employers reimburse based on the grade received; 100% for an A, 90% for a B, 80% for a C and so forth. Then there are some employers who will reimburse a percentage of the tuition paid regardless of the grade earned (although it must be a passing grade). There are a few employers who will pay for the courses up-front and directly to the school. Maintaining a certain grade point average (GPA) in order to participate in the tuition reimbursement program may also be a requirement. Many employers will not reimburse an employee for the cost of books, lab fees or other fees. Some employers require that the courses must be job-related. Most employers who offer such a plan will permit reimbursement for certificate programs and courses for either an undergraduate or graduate program.

One other piece of related information to share: employers can provide up to $5250 per year to each employee on a tax-free basis for tuition benefits. Any additional tuition aid dollars reimbursed will be taxed. This is often the reason why many employers will have an annual cap on their tuition assistance program.

I am sorry that you misunderstood the tuition reimbursement program offered by your new employer. Consider yourself lucky though. Not all employers include such a program as part of their employee benefits program.


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