Apparently, one of our Regional HR Managers has been working along side Legal and the VP of HR to come up with an Educational Assistance Questionnaire. But before I go into this new idea, let me preview what I have seen in other companies. Having worked for several companies, I have had the privilege of utilizing a variety of educational assistance or tuition reimbursement programs. Here are the programs that I have seen:
Eligibility
This is extremely important. Some questions that drive this conclusion are: With whom do we wish to invest? Do we want to use this as a recruiting tool (ie. UPS)? While there are some other questions, the company has to decide whether they want to invest in people that have a track record with the company or not. Are there any exceptions/differentiations due to the job position to the rule/policy (ie. For hourlies, educational assistance after 1 year, but for leadership/management, educational assistance available immediately)? The basic fear is that the company will invest an extra $5,000 or whatever in a person and after they graduate, they’ll leave (however, I believe that to be a Talent Development/Management issue).
- No Educational Assistance Available.
- Educational Assistance Only Available for Managers.
- Educational Assistance Only Available after 1 Year of Service.
- Educational Assistance from Day 1 to Anyone.
- Mixture of the Above
Limitations
To me, this is a basic ROI type question. For example, do I want to pay for an employee to get a philosophy degree while they work in Accounting? Some people would say YES while others NO. To me, this needs to be much more flexible than it is. While I am not an advocate of an “any degree program” (though I did love this while I was at UPS), I am an advocate of thinking outside the box. I personally believe degrees like philosophy, theology, etc. are great degrees (though typically not covered by the business-related clauses) because they teach people how to think and write, which is priceless in a company! Especially for leaders! Look at how many people do not work in their degreed field. I’ve heard it said by many professionals, “All a college degree is good for is to show that you can finish something that you started,” or, “All a college degree is good for is to show that you can finish a long term project.” But whatever side, the employer comes down on it results in the following:
- Educational Assistance for only Business-related degree programs.
- Educational Assistance for only leadership-related degree programs (basically #1 with a caveat).
- Educational Assistance for any degree program.
- Educational Assistance for only Business-related degree programs but not for online classes.
- Educational Assistance for any degree program but not for online classes.
Monies
Usually, companies cap this at $5,000. This is because of the IRS Publication 970: “If your employer pays more than $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income.” However, the Educational Assistance could be associated with a fringe benefit: “However, if the benefits over $5,250 also qualify as a working condition fringe benefit, your employer does not have to include them in your wages. A working condition fringe benefit is a benefit which, had you paid for it, you could deduct as an employee business expense. For more information on working condition fringe benefits, see Working Condition Benefits in chapter 2 of Publication 15-B, Employer’s Tax Guide to Fringe Benefits.”
- Based on Grades: 100% for an A-B, 80% for a C, 0% for anything else up to $5,000/yr.
- Based on Grades & Graduate Level: Under-Graduate: 100% for an A-B, 80% for a C, 0% for anything else up to $5,000/yr. Graduate: 100% for an A, 90% for a B, 80% for a C, 0% for anything else up to $5,000/yr.
- Paid up front: Usually this is done with only specific schools the company has good public relations with. For example, UPS did this with certain schools in the area where you signed up for classes, notified UPS online, and payment was made (instead of reimbursement though the same rules applied for making the appropriate grades).
So now our Regional HR Manager is suggesting that we add above and beyond our current policy:
This program is available to full-time Associates with at least 1 year of full-time service. The associate must be enrolled in a degree program at an accredited institution. No Internet classes will be reimbursed. The degree being sought must be of current or future benefit to the company. Each semester, the associate must submit a completed application to the Benefits Department at least 10 days prior to the 1st day of class. The Benefits Department must approve the application prior to the start of classes. Associates must earn a grade of “C” or better and meet all course requirements. A copy of an official grade report must be submitted to the Benefits Department. The maximum reimbursable amount is $1,800 per calendar year for undergraduate students. For associates pursuing a master degree, the maximum is 50% of the tuition up to $2,500 per calendar year.
To me, the policy, though better than nothing, is not that great. However, it is still in effect regardless of the current economic climate while most companies have ceased their educational assistance programs. So with that being said, other situations and abuses have caused us to look at this policy a bit further. So our Regional HR Manager has worked with a team and has created a questionnaire. Here it is:
Q. Is this associate the next person you would promote to a leadership or account manager position in your location?
Yes/ No (circle one) Explain why: _____________________________________________________________________.
Q. Is this associate someone that you would recommend to a hiring manager in another location or corporate headquarters?
Yes/ No (circle one) Explain why: ______________________________________________________________________.
Q. Is this associate willing to relocate for a leadership, account manager or professional position?
Yes/No (circle one) Explain when: _________________________. Where: ___________________________________________.
Q. Are the courses this associate listed on their application relative to a career path that will benefit the company?
Yes/No (circle one) Explain how: _____________________________________________________________________________.
Q. Will the courses this associate listed on their application help them in their current position?
Yes/No (circle one) Explain how: ________________________________________________________________________.
Q. Is this a wise way to spend the company’s money?
Yes/No (circle one) Explain why: ________________________________________________________________________.
Q. Is there a ROI for investing in this associates future?
Yes/No (circle one) Explain why: ________________________________________________________________________.
Please answer/ ask these questions in addition to the above if this is a renewal application:
Q. What are some examples of why the company should continue to pay for this associate Education Assistance?
Quantifiable examples: _________________________________________________________________________________.
Non-quantifiable examples: _____________________________________________________________________________.
Q. Do the internal/ external customers of this associate see a ROI?
Yes/ No (circle one) Explain how: _________________________________________________________________________.
Q. Ask the associate how (be specific) they feel they are giving back to the company?
Explain: ________________________________________________________________________________________________.
What do you think?