Your employer offers a tuition assistance program. Excellent! But do you know how it works? Failing to plan in advance could end up costing you unused dollars for your MBA.
If you aren’t sure if your company offers tuition assistance, reach out to your manager/HR/benefits department to find out. You don’t want to leave any of your employer’s funds on the table.
If you have been admitted to multiple MBA programs, you’ll want to map out how the tuition assistance will work with each to compare the overall benefit you’ll receive in addition to your out of pocket expenses at each program. Before you sit down to do this, you’ll want to know the start and end dates for each term, cost per course/term, and understand if any of the programs offer flexibility in order to stretch out your enrollment into more years for tuition assistance.
To fully understand your tuition assistance program, be sure to review your employer’s policy to answer these three questions:
1. How much can I receive?
Your annual tuition assistance amount is usually not dependent upon whether you are a full-time or part-time student. It is typically based upon your employment status. Full-time employees can receive one amount and part-time employees often receive a smaller amount. Sometimes the amount is prorated based upon FTE status. There also may be a minimum FTE required for eligibility.
Once you know the amount of assistance allowed per year, you’ll want to know what year we’re talking about—e.g. calendar, academic, fiscal, etc. Then is the year the payment is deducted from based upon the reimbursement pay date, course start date, or course end date? Which costs are covered by the tuition assistance program? Tuition only? Or are academic fees and/or books included? Are 100% of the fees covered up to the annual limit? What is the minimum grade requirement and does the grade affect the percentage of tuition reimbursed?
Tip: This is super important to consider if you are starting a program in a standard fall term that ends in December. Reimbursement is often not processed until January, so it may be deducted from the next calendar year’s tuition assistance allotment. This means you would not be taking advantage of any current year funds. Is it possible for you to enroll earlier in the year?
2. When and how to apply?
Your employer may handle the tuition assistance program in-house, or they may outsource the processing to a program administrator. Either way, you’ll want to know if the application process happens after you complete each course or if you need to apply before the term begins. In most cases, you’ll need to apply each term, as long as you have not used up your annual limit yet. Whatever you do, do not miss any deadlines. Your application may be denied if it is late or missing documentation. You’ll likely need to include course-specific information on the application, such as course name, number, cost per course, and start/end dates. Your employer may also require you to confirm the accreditation of your program. If you are new to your job, check to see if there is a waiting period before you can apply for tuition assistance.
Does your manager or someone else need to approve your application? If so, be sure to give them a heads up that you are enrolling in school so they aren’t caught off guard when the application is sent their way. Companies often will want your course of study to be related to your current position or another position in the organization. Be sure to have a conversation with your manager to confirm that your MBA program is applicable.
Many tuition assistance programs are based on the reimbursement model, where you receive the funds after you prove that you paid for and completed courses by submitting your tuition receipt and grades. Others allow you to receive the funds up front or have the funds paid directly to your school. Prepayment by your employer is easier on you since you won’t need to pay out of pocket, but you’ll certainly want to achieve the appropriate grade so that you are not required to pay the money back.
Tip: If your tuition assistance is based on the pay date in a calendar year and the application timeline allows for you to submit for reimbursement 30+ days after your fall term ends, you may be able to submit your grades on January 1st to ensure that the funds will be deducted from the next calendar year. This strategy can be particularly helpful if you’ve already used up the limit for the year. You may be able to get another year of tuition assistance for your final term if you finish in the fall.
3. Repayment obligation?
Are you planning on keeping your employment options open or actively looking for a new job once your MBA is in hand? Keep in mind that your employer may have a service requirement; often it is one or two years. If you leave your job sooner, you may need to pay back all or a percentage of the tuition assistance received.
Before you commit to an MBA program, spend the time to understand all the intricacies of your tuition assistance program and map out your tuition costs to see how they will coordinate. You’ll be much better prepared to maximize your tuition benefit and investment in business school.
Michelle Clifton is Senior Manager of College Finance at College Coach, the nation’s leading provider of educational advisory services to organizations and families. Michelle has spent the majority of her professional career in higher education. She is an active member of the Massachusetts Association of Student Financial Aid Administrators and volunteers for FAFSA Day Massachusetts.