Young Engineers

Will Your Boss Pay Your Tuition?

August 26, 2013

Engineering Tuition Reimbursement

By now, the problem is all too familiar:  to remain competitive, an engineer requires extensive, expensive investment in education and training, while the necessary time and money remains out of reach without taking on onerous debt or de-prioritizing one’s career.

How can you afford the time and money to continue your education, without splitting your focus or taking on debt?

Your employer’s tuition reimbursement program could be the way forward.

Is Tuition Reimbursement an Option?

The short answer is that, for an engineer, it very likely is.

Estimates vary, but a majority of US employers offer tuition reimbursement programs to employees pursuing relevant education and training. Hewett Associates once pegged the high end at 99% of surveyed employers, whereas a 2002 survey conducted by the Society for Human Resources Management suggested a figure closer to 79%. (The relatively small sample size of the latter survey – 510 companies – indicates taking this number with salt, to taste).

More recent data is somewhat harder to come by, but the BLS Employee Benefit Survey indicates that, as of 2007, 73% of “professional and technical” full-time employees were offered and qualified for tuition reimbursement through their employer (compared to 56% of full-time employees in less rigorous fields and 28% of part-time employees).

As an engineer, it is both overwhelmingly likely your current employer offers tuition reimbursement and reasonably certain you’re not taking full advantage of the program. While the majority of engineering and technical roles qualify, far fewer individuals take full advantage of the programs on offer; the American Council of Education once estimated that as few as one-third of engineering students use tuition reimbursement to cover a portion of their educational expenditures, accounting for a similar overall percentage of annual costs in post-secondary tuition and fees. Looking back to the 1993 Hewett Associates study, only 6% of qualifying employees took proper advantage of their employer’s tuition reimbursement programs, with the number remaining fairly stable in the intervening decade.

Tuition Reimbursement Basics

Details vary, but a tuition reimbursement program is essentially a commitment from your employer to pay part or all of the expenses incurred pursuing further education in a relevant field. Employers provide this benefit for a number of reasons, but primarily to continue honing the capabilities of their workforce and as a retention strategy for front-line employees.

Additionally, employees who receive tuition reimbursement benefits are typically more motivated, loyal, and productive. While detailed numbers aren’t available, it’s easy to extract a few qualitative factors from HR professionals and managers which may explain some or all of this benefit: on one hand, employees who take advantage of such offerings may be more motivated individuals in general, but on the other, their employers investment in their education leads to an employee feeling more valued, more loyal, and more kindly disposed to their employer. (The fact that most plans require employees complete a set interval of employment after completion of education and training, or the investment must be repaid, is not usually mentioned as a factor.)

The amount of tuition and related expenses covered by an employer vary, as do the conditions under which you qualify or may receive promised funds. The common points of variance are:

  • Eligible Course Material
  • Reimbursement Cap (Either Percentage or Total)
  • Exams, Textbooks, and Related Fees
  • Minimum Performance Requirements
  • Duration of Employment

Programs offering complete coverage of all continuing education costs are comparatively rare. The most common plans either pay up to a set amount, or a fixed percentage of tuition costs, in relevant coursework areas; a few employers will go so far as to specify exact schools and courses, but this is relatively uncommon in professional and technical fields.

Some employers cover exams fees, textbooks, or other related costs, but these programs are exceptional.

Almost all plans set performance targets employees must meet in order to qualify for reimbursement, usually a grade level or, in the case of exams, scoring target. Almost universally, you need to earn a B or above, though a C may be acceptable for certain programs or courses.

The point where reimbursement programs differ is over the question of duration of employment, before and after reimbursement. You may need to “prove out” before becoming eligible for your employer’s program and you must almost always agree to continue working for them for a fixed interval after completing your coursework. The latter is just good business sense; if your continuing education or advanced qualifications make you more marketable, why should your employer pay to train you to work elsewhere? Leaving early usually involves settling up for all or some of your employer’s investment.

Smarter companies will promote continuing education students from within to capitalize on the investment in and increased loyalty generated by their tuition dollars.

Regardless, the consistent point across all reimbursement programs is that you must register before beginning the applicable coursework. Speak to your employer’s HR or Development staff and those at your school to familiarize yourself with the relevant procedures.

 

Boeing vs Amazon: A Tuition Reimbursement Case Study

To help you evaluate a prospective employer’s tuition reimbursement benefits, let’s consider Boeing’s tuition reimbursement plan. Their program – before and after its 2009 overhaul – provides a useful point of comparison for examining benefits offered by competing firms.

For many years, Boeing (jobs) maintained one of the most comprehensive and, frankly, generous tuition reimbursement plan in the business. Employees could pursue any course of study – from engineering-relevant advanced degrees and certifications to hobby programs and art – with Boeing picking up the entire tab. Further, there was no contractual obligation attached; an individual could complete their coursework and jump the next day, leaving Boeing stuck with the bill. We have no figures on how often this happened at Boeing, or more generally, and don’t want to imply that engineers were abusing the system. What’s relevant to the discussion is the complete freedom afforded to employees under the previous tuition reimbursement program.

Beginning in 2009, however, Boeing moved to tighten access to educational benefits by limiting the range of applicable coursework to those of strategic value to the company – i.e., technical and engineering roles generally, with other areas such as law, foreign languages, or business management approved if immediate value could be demonstrated to the company. Further, benefits were capped at $15,000 annually and the company cultivated specific relationships with educational institutions under its Learning Together program.

How does the post-2009 tuition reimbursement plan compare with others in the industry?

Amazon’s Career Choice Program, for example, will cover coursework in any high-paying, in-demand field (according to BLS statistics) undertaken by full-time, hourly employees of three years service or more… but only up to $3,000 per year.

This is not to pick on Amazon (jobs), or single out their reimbursement program for criticism. Their Career Choice Program is close to the national average for tuition reimbursement benefits paid per employee, which hovers around the $3,700 mark, with the added advantages of preferentially targeting individuals most in need of educational assistance and broadening their range of applicable certifications and programs to those in strategic economic demand more broadly, rather than solely within the company. Still, the Career Choice Program is an appropriate example of how, while Boeing exercises tighter control over course selection, their benefit caps are substantially more generous.

Moving forward, this may provide the model for broad comparison of tuition reimbursement plans between companies. Those who base their plans on an internal, strategic assessment of required talent and training will more comfortably offer higher caps for selected coursework, while companies which treat tuition reimbursement as a more general employee benefit can be expected to adhere to the national average. As in the original days of employer-provided health insurance, only increased competition for available talent will incentivize a general move towards higher benefit caps.

 

Share your tuition reimbursement stories, tips, and tricks with the next generation of engineers by tweeting @EngineerJobs or leaving a comment, below.


Related Posts