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Tuition Assistance Programs

The ‘skills gap’ dilemma has plagued a variety of industries in recent years. Why? Many jobs require rapidly changing, more advanced skills that employees struggle to keep up with. In fact, according to an Adecco State of the Economy Survey, a whopping 92% of executives and business leaders think Americans aren’t as skilled as they need to be.

Simply put, a skills gap means that employee skillsets don’t align with the skills necessary to perform their jobs.

Bring Employee Benefits to Your Company
What’s the solution? One major aspect is to help existing employees build new skills — and organizations can do so by offering a tuition assistance program.

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.


FAQS on Tuition Assistance Programs

Is tuition reimbursement from a tuition assistance program tax-deductible for employers?

OPEN
Yes, a tuition assistance program is tax-deductible for employers. Under section 127 of the tax code, the IRS allows employers to deduct the expense from taxes — up to $5,250 per employee per year in tuition reimbursement.

What do tuition reimbursement programs do?

OPEN
Tuition reimbursement is a type of tuition assistance program that reimburses employees for education costs after they’ve successfully completed their coursework — it allows organizations to cover all or some of the expenses that employees incur while continuing their education.

Employees’ programs of study and related costs must fall within the guidelines of their organization’s specific policies — typically, coursework must be relevant to their industry or their specific role/department.

EXPLORE SOLUTIONS FOR YOUR EMPLOYEES

Family care benefits have never been more important. See how Bright Horizons can support your team.

Bright Horizons offers more than a traditional daycare. It helps parents looking for education-based Boston daycare, NYC daycare, Chicago daycare, Washington, DC daycare, Los Angeles daycare, San Francisco daycare, Seattle daycare and local daycares in other cities. It also provides back-up daycare and elder care, employer-sponsored child care, employer tuition assistance, workforce education, and student loan repayment programs. Bright Horizons Global Headquarters is located in Newton, Massachusetts, USA.