Employer Provided Educational Assistance

College Benefits from Your Boss

Companies and businesses have a vested interest in their employees higher education goals. When you add to your knowledge and augment your skills you become an even more valuable asset to your employer. Companies benefit when their employees complete a college education, and in many cases are eligible for substantial tax credits in return for offering an Employee Education Program.

Whether you are attending college as an undergraduate, or are returning to complete your graduate degree, your employer may offer benefits and programs that will provide much needed financial assistance.

Qualified Educational Expenses employer assistance programs

Education assistance benefits from your employer can be used to defray the total costs of your college education. Funds can be put toward the price of tuition, books, supplies and college fees. Employer education benefits can not be used for living expenses or transportation costs.

Employers Education Programs provide incentives and assistance for both undergraduate and graduate level students. In some cases extra funds may be available for those students pursuing a Master's or PhD. Consult your company's human resources department to find the types of educational benefits that are available to you.

Different Types of Education Assistance Programs

Depending on your employer, and the type of business or company you are currently working for, you may have access to one of the following types of education assistance programs.

Assistance for Improving Career Skills

The most common Education Assistance Programs are devoted to providing financial aid to employees attending a college or vocational school in order to expand and augment their career specific skills. These newly acquired skills make an employee more productive and more valuable in the workplace, which in turn benefits the company at large. Oftentimes these skills will be needed for an employee to advance to the next level in their career.

To find out if your employee educational assistance program is limited to degree seekers, or if you may pursue standalone skills courses and certificate programs, consult your human resources administrator for details.

Assistance for Earning a Higher Degree

Some Employer Education Programs, particularly in white collar companies, provide for students enrolled in formal degree programs. In most cases these will include undergraduate and graduate students pursuing a degree that will specifically benefit the company in question. For those students looking to continue their education at a higher level, and intending to put that education to use in the marketplace, Employer Education Programs may provide much needed funds to offset their college costs.

Again, it will be necessary to consult with your company's human resources department to learn what programs may be available to you.

Limitations and Requirements for Employer Education Programs

In many cases your employer has stipulations attached to an EEP and may include:

All Employer Education Programs will come with a set of strict requirements and specific stipulations. Some will be specific to the company or business offering the program, others will be tied to government regulation concerning tax credits and income allowances. The most common stipulations attached to Employer Education Programs include:

  • Employees/students may be required to maintain a particular GPA to continue to qualify for employer assistance.
  • Employees may be responsible to pay the tuition bill up front and submit all itemized bills for reimbursement..
  • Employees/students may be required to pursue a degree, as opposed to coursework or certificates.
  • Online programs may be excluded.
  • Employees may be required to work full-time and to have been employed by the company for a certain period of time before being eligible for any EEP benefits.
  • EEP agreement may make stipulations that you must remain in your job, or department, for a period of time post receipt of EEP benefits.
  • EEP may only cover a percentage of tuition.

When it comes tax time, the IRS allows your employer to deduct up to $5,250 each year in employee assistance aid. If your employer provides more than $5,250, it may not qualify for any tax relief. It’s important to keep accurate records of your expenses, and to provide them to your employer so that they will be available at tax time.

If your employer provides you with educational assistance, you cannot claim the HOPE Scholarship Tax Credit or the Lifetime Learning Credit during the same tax year. So make sure you understand the limits, and take whichever credit program works best for you financially.