Weighing the Benefits of a Tuition Reimbursement Program

July 06, 2022 • Keith McLemore

Weighing the Benefits of a Tuition Reimbursement Program

Tuition reimbursement programs can add value to your total compensation package, but without being strategic to an employer’s specific needs and goals, they may not provide a meaningful return on investment (ROI).

Tuition reimbursement programs are provided by employers to pay for some or all the costs of an employee’s education, within the limits of the employer’s guidelines. The primary benefits of tuition reimbursement programs include:

  • Recruitment advantage, if advertised appropriately
  • Retention tool which may result in a reduction of turnover costs
  • Deduction of up to $5,250 in reimbursements per employee from the employer’s taxes
  • Talent development
  • Employee engagement
  • Boost to an organization’s branding efforts

The 2022 employee benefits survey from the Society for Human Resource Management (SHRM) reports 48 percent of employers indicated they offer undergraduate or graduate tuition assistance as a benefit. Although it is unclear how public education entities compare with this percentage, an online search yields few examples of school districts offering such programs in Texas. 

Key considerations

Before starting or retooling a program, care should be given to a wide array of interdependent factors to provide the highest probability of success. Key considerations include:

  • Who will be eligible to receive the benefit (e.g., class of employee, full time, etc.)?
  • Which educational institutions are eligible?
  • How much and when will the benefit be paid?
  • How will the program be advertised?
  • How can eligible employees apply?
  • Will the program be managed in-house or through a third party?
  • Will the organization seek a strategic partnership with a particular educational entity?
  • Will the employee be subject to a commitment for employment following the receipt of any benefit?
  • What are the consequences if an employee doesn’t meet the required employment commitment?

Employers seeking to require reimbursement if commitments are not met should consult with local counsel.

Being strategic

Unlike a typical private company that can elevate profits through increased sales or other means, education entities operate on a static income. This means they must be more strategic. Instead of offering a broad benefit that covers any kind of degree or subject area, an entity may wish to target specific areas.

For example, one option could be to include only paraprofessionals to support the completion of a bachelor's degree with the idea that it could provide a path to teacher certification. For employees with a bachelor's degree, another option could be to support those wishing to pursue graduate degrees in shortage areas like math, science, or bilingual education. Another worthwhile option could be to provide assistance to those seeking a graduate degree in their specialty area.

Making a decision

The pros of providing employees a tuition reimbursement benefit will likely outweigh the cons for many education entities that choose to pursue it. However, factors such as employer size, management costs, and participation rates may present an unfavorable ROI.

To view information and application examples for tuition reimbursement programs in Texas school districts, see links for Elgin ISD, Plainview ISD, and Killeen ISD that were active at the time of this writing.


Keith McLemore is an HR and compensation consultant at TASB HR Services. Send Keith an email at keith.mclemore@tasb.org.


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Tagged: Benefits, Recruiting, Retention, "Teacher shortage"