International Student’s Guide to Tuition Reimbursement

International Student’s Guide to Tuition Reimbursement

You dream of finishing your undergraduate degree. However, public universities often charge up to $35,000 a year. For private colleges, the number increases to $45,000. So, how are you supposed to pay for your education?

Tuition reimbursement offers a solution.

Never heard of the program? Neither did 43% of working adults in the U.S. However, companies pay $28 billion every year for tuition reimbursement.

How can you apply for tuition reimbursement? What are the eligibility criteria? How much do companies pay?

If you are asking these questions, this guide is for you. In the next five minutes, you will read a complete guide on tuition reimbursement for international students.  

Note: the information is true at the time of writing. That is August 2021.

How much money do companies offer for tuition reimbursement?

The amount varies for each company. Let us consider a few examples.

Starbucks reimburses the full tuition fee for a bachelor’s degree, and both full-time and part-time employees receive the benefit. However, you must enroll into Arizona State University’s online program.

UPS offers up to $25,000 per student, while Home Depot reimburses up to $5,000 for a year.

Companies including Amazon and Target offer tuition reimbursement for specific degrees. Amazon reimburses up to 95% of the tuition fees for any in-demand degree. Target offers up to $5,250 for each student pursuing an MBA degree.   

Companies can limit which universities you can attend and what you can study in order to be eligible for tuition reimbursements.

What are the eligibility criteria for tuition reimbursement?

Each company has a separate list of criteria. However, here is a set of general standards you can keep in mind.

1. Nature of the course

Amazon and Target offer tuition reimbursement for specific degrees, such as an MBA. However, Starbucks and UPS offer tuition reimbursement for any degree. 

If you work at a smaller company, chances are you will receive reimbursement only for work-related courses. For example, if you work at a digital marketing agency, but want to pursue creative writing, your employer won’t reimburse you.

2. Cost of the program

Most small companies offer tuition reimbursement up to $5,250. The reason? That’s the amount companies can show as tax-deductible. Anything higher and your employer can choose not to reimburse you.

However, the scenario is different with many big companies. Amazon offers up to 95% tuition reimbursement for in-demand degrees, while UPS offers up to $25,000 for any degree. 

3. Grades needed

The minimum grade you must score varies for each company. UPS wants its employees to score at least a ‘D-’ to qualify for reimbursements. John Hopkins University asks the employees to get at least a ‘C.’

Check your company’s tuition reimbursement policy to know what you must score.

4. Number of years you must stay at the company before you become eligible  

Each company has a different timeline.

If you work at Amazon, you must work at least a year before you become eligible. If you are an employee of Chipotle, you must work for at least four months, and at least 15 hours a week for those four months. 

You will find further details on your company’s tuition reimbursement policy.

What is the process to receive tuition reimbursement?

The process varies for every company. However, take note of these general guidelines you should follow.

Ask human resources for a copy of the tuition reimbursement policy, and be sure to read the fine print. Check if the company restricts you to specific courses in order to qualify for the reimbursement. Also check if the company has a partnership with an educational institution. For example, Starbucks offers tuition reimbursement only if you enroll in the online program of the University of Arizona.

You must submit a tuition statement to HR. The statement should include your name and the name or initials of the university. The tuition statement should show an itemized breakdown of each charge, and the statement must include how you paid for these expenses.

Submit a transcript with your course name and codes. The transcript must show your number of credits and final grades for the term. The transcript should also include your name, as well as the name or initials of the university.

If your company reimburses textbook costs, you must submit an itemized receipt for every textbook. Furthermore, you should also submit the syllabus for each course, as the syllabus proves you needed those books. 

Your company can ask you to submit a Free Application for Federal Student Aid (FAFSA) as well.

You should receive the tuition reimbursement within 6 weeks.

Questions you should ask

1. Covered expenses

Ask if the employer covers only tuition fees, or for associated costs as well. If yes, which costs does the employer cover?  

Associated costs include textbooks, lab fees, internet connection charges, and late registration fees, among others.

2. Employee eligibility

Your employer can ask you to work for the company for a specific timeframe before you become eligible for tuition reimbursement. The timeframe varies for each company. For example, Amazon asks its employees to work for a year before the employees are eligible for tuition reimbursements.

Companies can also require you to work a specific number of hours per week to qualify for the program.

Check to verify if you need a manager’s approval before enrolling in a course.

3. Payment and processing

Ask HR if they want you to sign an education contract. The contract has a clause asking you to stay with the company for a specific length of time after you finish your degree. The amount of time differs among companies. 

Ask if you must score a certain grade to qualify for the reimbursement.

Confirm with HR how you will receive tuition reimbursement. Will you receive the reimbursement when you enroll, or after your complete your degree? Furthermore, establish if the company will pay the money to you or to the university.

What if you fall sick and cannot complete the course? Should you need to repay the tuition fee that the company has reimbursed already?

These are questions you need answers to before you sign up for the tuition reimbursement.

4. What are the tax implications?

The Internal Revenue Service (IRS) offers a cap of $5,250 for tax-free tuition reimbursements. This means that you won’t have to declare the reimbursement amount on your income taxes up to $5,250. However, your company must have a written policy, and the reimbursement policy must meet all the federal tax guidelines.

Your company can show the same amount of money as tax deductible as well, making the situation a win-win for both parties.

A win-win for both employee and employer

You can improve your skills with the courses you want to pursue, and therefore you become eligible for promotions and salary increases. Furthermore, companies won’t need to hire new staff, so they will save on their budget, too.

Therefore, tuition reimbursement offers a win-win situation for both parties.

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