Did you know that many employers offer Employee Educational Assistance Packages to employees interested in pursuing an associate or undergraduate degree, graduate degree or certificate? Currently, around 33 percent of employees that attend college through Employee Educational Assistance Packages (EAPs) earn an associate degree, 23 percent earn a bachelor’s degree, 22 percent pursue master’s degrees, and 15 percent pursue professional certificates. EAPs offer tuition reimbursement and reimbursement for books and program associated fees.
Employee Education Assistance Packages are common at large firms, although some smaller firms may be receptive to the idea. More on this later. Larger companies in the insurance industry, public utilities, financial, hospital care and education will almost always offer EAPs to employees. And contrary to popular belief, many plants and retailers do offer tuition packages to employees under certain circumstances. A good example is Ford Motor Company. Back in 2004, when Ford’s Edison, New Jersey and Avon Lake, Ohio plants closed leaving 1,500 workers without jobs, workers became eligible to receive up to $15,000 a year toward tuition as long as they were enrolled as full-time students.
There are two types of EAPs: job related EAPs and self-improvement EAPs. Job-related EAPs offer the most benefits for employers. They are tax deductible for employers and the training the employee receives will increase the employee’s worth (i.e. performance and productivity). Job related EAPs are also tax-free for employees. Self-improvement EAPs may or may not be tax deductible, so it’s best to consult the most current tax regulations before applying for EAP funds.
To apply for EAP funds, employees must complete the application through the Human Resources (HR) department. Depending on the company, the HR department may evaluate the application based on the institution, the program, the employees work history, salary and whether or not the course of study fits within the objectives of the company. Again, this depends on the company. Some companies may offer assistance for just about any program as long as the employee maintains a B average or better.
Approximately half of all companies that offer EAPs pay 100 percent of tuition costs. Twenty percent pay between 50 and 90 percent of tuition costs and 30 percent pay below the 50 percent mark. While most employers offer tuition reimbursement through EAPs, other plans may pay for tuition up front, but with one caveat. If the employee drops out or does not pass with a B average or better, the employee will have to reimburse the employer in full. If the employee quits his job before paying the employer back, the employer has the right to collect through the appropriate legal channels. Remember, all employees that receive money from EAPs will have to sign an agreement stating that they agree to pay the employer back if the employee fails, drops out or quits his job.
Not every employer has a formal employee education assistance program in place, but they might be open to the idea on a case-by-case basis or as a group. If the employee or group can prove that higher education will result in returns for the company, the employer may be willing to make an offer. It’s best to schedule a meeting with the boss to present your case.
Overall, EAPs are well worth the effort. They offer an excellent way for employees to finance their education. Remember, billions of dollars are readily available through employers to cover the costs of tuition. No other financial aid avenue offers a salary plus free money for higher education.
The list below represents only a fraction of the companies that currently offer Employee Educational Assistance Packages.
- -American Fidelity Insurance
- -AT&T
- -Chicago Mercantile Exchange
- -Cigna
- -Ernst & Young
- -Farmer’s Insurance
- -General Mills
- -Hilton Hotels
- -Johnson & Johnson
- -Kaiser Permanente
- -Lockheed Martin
- -Microsoft
- -Nike
- -Philip Morris
- -Starbucks
- -U.S. Bank
- -Wal-Mart
- -Wells Fargo
- -Xerox
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