Laws & Policies of Tuition Reimbursement

Tuition reimbursement can be a complicated procedure involving many different parties. Depending on the circumstances, either employers reimburse the cost of tuition or employers will partner with higher education institutions to structure a repayment deal. Tax laws can also be beneficial when it comes to tuition reimbursement. Regardless of your situation, inquire with your financial lender, your school and/or employer to secure an appropriate arrangement.
  1. Company Reimbursement

    • For companies, tuition reimbursement will usually not cover any grade below a "C."

      Having a company reimburse the cost of your tuition can be a major incentive for employment. Each company has its own tuition reimbursement policies but there are universal examples of how these procedures work. According to the Education Law Information Network, tuition reimbursement is typically offered for up to "six credits per semester and a maximum of 18 credits a year." Standard company policy will often reimburse a former student 100 percent for a grade of "A"; 75 percent for a grade of "B" and 50 percent for a grade of "C".

    Combination Reimbursements

    • Tuition reimbursement at UWM is often available for up to 12 credit hours.

      Tuition reimbursement can also be arranged between educational institutions and professional organizations. An example of this is the state labor agreement with the University of Western Michigan. If you are enrolled with employed by the state of Michigan, up to 25 percent of the tuition cost and fees may be covered by the school. The remaining 75 percent of the overall tuition is guaranteed to be reimbursed by the employer.

    Tax Law

    • Tax credits for tuition reimbursement are adjusted depending upon your level of income.

      Many tax laws can help with the reduction and/or reimbursement of tuition. The American Opportunity Credit (AOC) is an education tax credit made available up to $2,500 per student. According to the IRS, the AOC offers reimbursement at a rate of "100 percent of the first $2,000 and 25 percent of the next $2,000 of qualified education expenses." The AOC opportunity is available during the first four years of undergraduate or graduate education.

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