How To Avoid Student Loan Debt With Employer Funded Tuition Assistance
Student loans have been at the forefront of a lot of financial conversations in the past few years. Tuition costs have risen, student loans are hella predatory and salaries have stayed pretty stagnant. This means people are taking out more money but receiving less pay to cover loans. It puts people in a type of debt that takes years to climb out of and can even be passed on to the next of kin.
This is a huge reason why I avoided going to college at all. I couldn’t (and still can’t!) see how spending so much money on school would be worth it. Especially when so much can be learned for free. Because of this, I didn’t go to college until I was 30. But I made sure I had a secret weapon in my back pocket.
Employer-funded tuition assistance.
A lot more employers are finding that offering any kind of tuition assistance, be it reimbursement or paying for a portion of an employees’ student loans, is extremely beneficial for their companies. Everyone from mom and pop stores to massive corporations have added educational benefits to their compensation plans. How exactly does it work?
While there may be some deviation to what each company offers, the gist of it is, they will pay for a portion of your educational costs as long as,
The program you’re in is relevant to the business.
You have to have been with the company for a certain length of time. (6 months to 1 year is average.)
You maintain a certain grade point average for each class.
You stay with the company for a certain period of time after you graduate.
Y’all, it’s free money from your boss to go to school. Why aren’t we talking about this option more!?
Let me give you a good example of how it works using my own experience.
I’m currently in an AA program for accounting. I applied for FAFSA first (federal tuition funds) which is covering half of my tuition. The remaining half is split between my employer and me. So I pay ¼ and they pay ¼.
They will only cover classes that are relevant to the business. I had one international business class that I had to cover the full half of because we aren’t an international business.
After looking over the classes for the program and designating what will be covered, I agreed to maintain a B average and I have to stay with the company one year after graduating. If I leave the company or drop my program, I have to pay them back.
After each term, I print out my grade and confirmation of payment and my employer cuts me a check for their portion. Remember, it’s reimbursement. I have to pay upfront and they cut me a check once proof of payment and my grades have been submitted to HR.
At the end of this program, I will have only paid about $3,500 including books. I won’t have any debt and will have a guaranteed job after graduating for at least a year. This ain’t a bad deal at all.
Another perk of tuition assistance is that it’s a tax WRITE OFF for your employer up to $5,250. You, the recipient, are also allowed that amount to be excluded from your income so you won’t pay taxes on it either. Again, pretty sweet deal.
This is something I wish more people looked into before committing to loans. When I say more and more companies are offering educational benefits, I mean it. McDonald’s, Walmart, Chipotle, Verizon all offer it as part of their compensation packages. Even if you’re only making minimum wage, it’s still open to you.
If you’re low-income, educational opportunities may seem out of reach purely because of the price tag associated with it. Baby birds that is not true. You have an enormous amount of options open to you that don’t involve debt.
Looking for more ways to save on education? Highly suggest checking this post from Rebekah over at Blissful Wallet that covers not just tuition costs, but also how to save money on other educational costs like books, food, and housing.
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