Take Advantage of Education Reimbursement

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If your employer offers any tuition reimbursement and you’re not taking advantage of it, you’re leaving a tremendous amount of value on the table each year. In the two jobs I’ve had since graduating college in 2003, I’ve been lucky enough to be offered the opportunity to pursue higher education in return for sacrificing some of my time. At my first job, every educational dollar I spent was fully reimbursed (you were only allowed to take two classes a semester, or six a year) with no requirements afterwards. In my second job, I was afforded $5,000 a year with some continuation of work requirements. Through both programs I was able to get a majority of my MBA paid for (ooooh, an MBA!). In both cases, I took advantage of them to the fullest extent possible and if you have this opportunity, you should too.

Time on the Side of Youth

I can understand if you don’t take advantage of it because you have children to care for and a family to attend to, those are perfectly acceptable demands on your time. If you’re young and have an abundance of time and a limited amount of responsibility, you’re doing yourself a tremendous disservice by not taking advantage of this. After work each day, how do you spend your time? Do you spend it lounging in front of the television? Do you spend it drinking at the bar? Unless it’s volunteering or working towards a higher purpose, I would recommend swapping at least one night of drinking and lounging with a night of classes. After a couple years, you’ll have a degree instead of nothing (or a beer belly!). One night is not too much to ask in return for shifting your path.

Consider It Compensation

Give yourself a raise by taking these classes. In fact, when you’re done, you can take your more competitive resume out into the marketplace and give yourself a second raise. I took twelve classes at my first employer over the course of two years. Each class cost approximately $1,500, so I gave myself a $9,000 a raise onto my base pay each year. In my three years of working for that company, my salary when I left wasn’t even $9,000 higher than when I started! After you are awarded your degree, shop yourself around. Your job isn’t your girlfriend, you can date other jobs.

If your current employer has an attendance requirement, as in you have to stay in your job for a period of time or repay the tuition reimbursement, you can stay on until that’s fulfilled or you can ask prospective employers to give you a bonus for that amount. Good talent is extremely difficult to find, paying a few dollars more to get someone into the door is worth it for a business that’s seriously considering you.

Take Electives to Expand Your Horizons

Don’t want to commit yourself to a full blown degree? Not a problem, signing up for a full menu of classes may be too much for you right now. Consider taking a few electives in your spare time, electives that will expand your horizons and give you more breadth of understanding in your field. Oftentimes the full menu of classes for a degree contain classes that are too basic and broad. This is especially common in programs designed to generate revenue for a college (think part-time MBA!). Does an MBA student really need a remedial statistics class or a basic economics class? Taking electives should give you a laser-focused area of study that you will find immediately applicable.

Networking, Networking, Networking

While education is important, networking is more important. I had a friend whose brother went to an excellent school. It’s a top notch university that has an extensive history of extremely famous and accomplished alumni. My friend’s brother’s roommates were All-American athletes, the children of officers in the armed services or politicians, or ridiculously brilliant. Sure, the school was “tough” but there was a fair amount of grade inflation and a fair amount of intellectual and athletic competition. That institution is a little school in Boston, MA known as Harvard University. (true story, at least as told by my friend)

There are many reasons why you should take advantage of tuition reimbursement plans, I listed only a few. Many people don’t have the benefit of these programs and would give up a lot to be able to have their education partially paid for, please don’t squander the opportunity unless you have a very good reason.

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7 Responses to “Take Advantage of Education Reimbursement”

  1. Frugal Dad says:

    I used tuition reimbursement to finish up about 50% of my undergraduate degree. Unfortunately, the company I used to work for cut the plan because of financial difficulties, so I had to finance the remainder of the degree. Still, it was a great deal, and I encourage anyone to take advantage.

  2. Minimum Wage says:

    When your employer reimburses you, is that taxable?

  3. jim says:

    Up to $5,250 each year in tuition reimbursement is tax free, there are additional rules for after that dollar amount.

  4. Minimum Wage says:

    It warms the cockles of my heart to know that I’m paying a higher effective tax rate than many people with much higher incomes.

  5. jim says:

    How do you arrive at that conclusion?

  6. Minimum Wage says:

    I do the math. I calculate my effective tax rate through dividing my total tax by total compensation. I also calculate someone else’s effective tax rate the same way. Since a lot of people enjoy all sorts of yax breaks (e.g. tax-free tuition reimbursement, tax-free parking paid by employer, tax-free medical benefits paid by employer, retirement contributions, mortgage interest and other itemized deductions, child tax credits, child care tax credits, etc etc) it’s pretty easy for people with $50K-$100K income to pay a lower effective tax rate than someone earning $15K.

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