Tuition Reimbursement

Dear Evil,
Love your blog! I’m curious if there are any laws governing tuition reimbursement programs. A colleague at a former company once told me that if a company offered tuition reimbursement, it had to be available to everyone for any subject of study. I didn’t fully believe him because the policy stated otherwise, but I have never been able to find any information on the topic.

Example:
My company covers 75% of the cost of tuition for approved educational courses, after completion with a C or better. The requirement for approval is this: “Courses must be associated with obtaining a degree, completing a program of study, improving technical skills required in performing current job duties, or acquiring skills and knowledge for improved performance and advancement within [organization].”

Where is the line drawn? I work at an engineering firm, so most people have BS engineering degrees or 2-yr drafting degrees. It’s reasonable that a drafter getting a BS in engineering is eligible. Management or MBA degrees are probably also slam-dunks. But what if someone gets a wild hair to pursue an English Lit degree? Or what if I get my MS in engineering but lay out a course plan that is clearly not focused on our industry (say all automotive-related courses instead of HVAC design)? Or, maybe it’s okay for the admin asst with no degree to get an English BA but not for the engineer?

My guess is that it’s the difficulty in drawing a clear line in what qualifies and what doesn’t is why an employer might choose to just let any education program of study be accepted, hence my coworker’s comment. Are there any laws about this? What do you see as common industry practice? I’d like to know before I go apply to have my Culinary Arts Assoc degree sponsored by the company ; )

Where is the line drawn? For your company, I have no idea. Call up whoever administers the plan and ask. There’s no secret language used to try to trick you into taking a class and then deny payment. Just ask. Get pre-approved before you start the class.

Tuition Reimbursement is not a requirement, nor are there restrictions on what a company must do with it. (With the usual exceptions of it being non-discriminatory. For instance, a company can’t say, “You must be under 40 to receive tuition reimbursement, as if you’ve made it to 40 without a degree you won’t stick it out anyway.”)

Some companies allow you to take any class your little heart desires. Others, require the classes to be in a degree or certification program, or to be in a subject area that relates to your job.

How I read your company’s description is that unless your company is involved in the food industry your dreams of a paid for culinary school are officially dashed. But, call and ask. Won’t hurt.

And since you didn’t ask, but I feel compelled to share, I’ll throw in my 2 cents worth on what I think a tuition reimbursement plan should include. First, I think it should be related to the business/job, but within a broad range. If your job requires writing proposals, then a degree in English would be acceptable. I’m a general fan of education and can see how [almost] any additional knowledge can be helpful in the workplace.

Second, require the person to remain at your company for a set time period after receiving the money. Generally, 3 years. If you leave in less than 1, you have to repay the full amount. 1-2 years, 2/3, 2-3 years, 1/3 and after 3 years you don’t owe anything.

Why the mean repayment plan? Because otherwise people take advantage of you. A friend worked for a company that didn’t require you to stay after receiving tuition reimbursement. They also had a generous plan that covered whatever school you wanted to go to. So, he went and got an MBA from the University of Chicago. (Cost: Lots.) That is, he and about 12 of is closest work friends. Upon finishing their pricey and valuable MBAs, all of them split for higher paying jobs.

That company made 2 mistakes: One was not requiring reimbursement if you left too soon. But the other was not actively “recruiting” their internal candidates with new degrees.

For heavens sake, companies, make provisions in your compensation guidelines to allow for big raises and promotions to newly degreed employees. If you would automatically consider a newly minted MBA from the University of Chicago–who was an outside candidate–as a candidate for a Director level position, make sure you allow your internal candidates with the same qualification access to those positions. Otherwise, they’ll take their expensive education and go to your competitor. Don’t say, “but that’s a three grade level jump and we only allow a one grade level jump without approval from a Sr. VP and then the max we can do is two levels!” Policies like that drive me CRAZY. You’ve just paid for this person’s MBA, take advantage of his new knowledge!

Take advantage of your company’s tuition reimbursement if you are interested in getting a degree or improving your skills. If you don’t have a bachelor’s degree and your company will pay, start working towards one NOW. I don’t care if you don’t think you’ll ever need it. You will. Get it, especially since you can do so cheaply. One class at a time, if need be. But, go get it.