What Tuition Reimbursement Is & How It Works

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Employee tuition reimbursement is an employee benefit where your company agrees to repay you for eligible college courses after you’ve successfully completed them. This benefit supports professional development and can significantly reduce the cost of higher education – but only after you pay the expenses upfront.

Unlike tuition assistance, which is paid directly to the school by the employer prior to classes starting, reimbursement programs require you to cover the cost first and then submit proof of completion and passing grades to get reimbursed. While not all companies offer employee tuition reimbursement, it’s worth checking with your HR department — or even pitching a program if one doesn’t exist since it can provide your employer with a tax benefit as well.

How does tuition reimbursement work?

While every employer’s process differs, here’s a general step-by-step overview on how tuition reimbursement typically works:

1. Check with HR to confirm if your employer offers tuition reimbursement and what the policy includes. 
2. Ensure eligibility – some employers require a minimum tenure or full-time status. 
3. Choose an approved program or course that aligns with your role or company guidelines.
4. Check what the requirements for reimbursement are, such as minimum grades or how long you have to stay with the company upon completion.
5. Pay upfront for tuition, books and other educational expenses. 
6. Complete the course successfully with passing grades.
7. Submit documentation – receipts, transcripts and reimbursement form.
8. Receive reimbursement, typically as a lump sum. 
9. Remain employed for a certain period post-course, or risk repaying the funds.

What are the requirements for tuition reimbursement?

Each company has its own rules for tuition reimbursement. In general, to qualify you typically must:

• Be a full-time or part-time employee with a certain length of service (e.g., 6-12 months). 
• Take courses at an accredited institution, either online or in person.
• Maintain a minimum GPA, often a B or higher.
• Enroll in preapproved coursework related to your current job or career growth.
• Agree to remain with the company for a set period after reimbursement (e.g., 6-24 months).

Covered expenses may include tuition, fees, books and sometimes supplies.

What are some companies that offer tuition reimbursement?

Looking for some companies that offer education benefits? Here are five companies known for their tuition reimbursement programs:

1. Amazon – Career Choice program: Pays 100% of college tuition and fees for front-line employees at eligible schools.
2. Target – Debt-free education assistance benefit: Covers tuition, fees and textbooks for select degrees and certificates.
3. Starbucks – Starbucks College Achievement Plan: Offers 100 percent upfront tuition coverage for first-time bachelor’s degree seekers through Arizona State University’s online program.
4. Walmart – Live Better U: Covers tuition and fees for select degrees and colleges. There’s no obligation to work for Walmart upon graduation.
5. Chipotle – Cultivate Education benefits program: After 120 days of employment, employees are eligible to take advantage of Chipotle’s education assistance. This covers 100% if tuition costs up front for 75 different business and technology degrees at a shortlist of schools including the University of Arizona, Bellevue University and Brandman University.

What to do if your employer does not offer tuition reimbursement

If your company currently doesn’t offer tuition reimbursement, you can take initiative and propose options:

• Start a conversation with HR or your manager about potential programs that could benefit employees and the company. 
• Emphasize the pros to your employer: improved skills, higher retention, better engagement and potential tax deductions. 
• Provide examples of other companies with successful programs. 
• Offer to track outcomes like GPA, retentions or performance upon course completion.

Being proactive could help you — and your colleagues — unlock valuable support for continued learning.

Bottom line

Tuition reimbursement is a powerful way to save money on college while advancing your career — especially if your employer is willing to invest in your growth. While you’ll typically pay upfront, getting reimbursed for eligible coursework can make higher education far more accessible.

To get started, check with your employer’s human resources department to inquire about education-related benefits. Ask about whether tuition reimbursement is available, and if so, whether any limitations apply.

Frequently asked questions

• Does tuition reimbursement affect my taxes?
  

  In most cases, you can receive up to $5,250 per year in tuition reimbursement tax-free. Amounts above this are typically considered taxable income, unless:

  • The education is required by the employer or by law to maintain their salary, status or job.
  • The education maintains or improves the skills needed in the employee’s current job.

• Does tuition reimbursement affect financial aid?
  

  Yes — in some cases. Here’s how:

  • You’ll be asked to include your employee tuition reimbursement when you apply for the Free Application for Federal Student Aid (FAFSA). This may affect how much federal aid you’re eligible to receive.
  • Most tuition reimbursement programs don’t cover the full cost of attendance, so it’s still worthwhile to submit a FAFSA and explore all financial aid options, such as student loans or grants.