How Does a Tuition Assistance Program Work?
An employer-sponsored tuition assistance program allows eligible employees to enroll in relevant coursework at an accredited university or college, and it helps cover the cost of tuition and fees.
A tuition assistance program can work in a few different ways — the benefit might offer tuition reductions or discounts, tuition reimbursement from the employer after course completion, or up-front tuition payments from the employer.
Employers can cap the amount of tuition assistance available for employees. Typically, this means establishing a number of classes the company will pay for annually per employee, or setting a limit in terms of the dollar amount available per employee per year. Either way, a tuition assistance program can give employees the ability to enhance their skills and offer employers a powerful employee retention tool.
Advantages of an Employer-Backed Tuition Assistance Program
A tuition assistance program is one of the most heavily sought-after employee benefits, but there are incredible advantages for employers, too.
First, more productive employees. Building new skills makes it easier for your employees to complete certain tasks — and that means a boost in productivity and a competitive edge for your organization.
Next, a key factor in retaining and attracting top talent. Tuition assistance can be a huge part of a comprehensive employee wellness program designed to keep valuable employees and recruit new ones. Plus, when employees choose to stay with your organization and build new skills while they’re there, you’ll also have the opportunity to promote from within to fill higher-level positions. This approach can boost employee morale by providing genuine advancement opportunities.
Nearly 60% of employers offer some form of tuition assistance or reimbursement to employees, according to the Lumina Foundation. And a series of studies conducted by Accenture and Lumina show that businesses see an extraordinarily high ROI from tuition assistance programs.
Finally, employers can also enjoy tax breaks when they invest in their employees. Organizations can count up to $5,250 per employee as tax-deductible for the year.
Improving Employee Satisfaction
As far as employer benefits go, a tuition assistance program is one of the most valuable — and it has a huge impact on employee satisfaction. This, in turn, benefits employers, too, as it leads to lower turnover rates.
When employees feel valued and appreciated, and are given the chance to grow and reach their goals within their organization, they’re more likely to stick around.