Advantages of Education Assistance Programs

One of the best ways to increase business performance is to improve the knowledge and skills of your workforce. Offering Education Assistance is an effective means for advancing the talent driving your results. Factors to keep in mind when considering a program include:


Growth-oriented organizations want to ensure that employees have the skills to grow in their work. By advancing skills and knowledge related to their jobs, employees become more capable at their assigned responsibilities. 

This increases efficiency and competitiveness making the organization more successful in the long run. Education Assistance is an investment in the future.


Employee turnover is a cost as well as a drag on growth. Consider the cost of hiring new employees: advertising open positions, screening, interviewing, bonuses, relocation expenses, background checks, employee benefit setup and the significant training and development expenses for new employees. Supporting growth and education can help an employer retain top performers. 

Most programs specify a tenure commitment, for example an employee who takes advantage of the program agrees to remain employed for a minimum of two years after reimbursement. If you offer education assistance which takes two years to complete, you can be assured that those employees will be around for a while.


Education Assistance is one way to show that the employer values its employees. Ambitious employees will be drawn to an organization that wants to improve their employees' skills and capabilities through external coursework.

Tax Advantages

Education Assistance is a Fringe Benefit (IRC §127) exempt from Income Tax, Social Security and Medical and Federal Unemployment (FUTA) withholding.

Exclusion from Wages

Employers can exclude up to $5,250 provided to an employee each year (can be higher under certain circumstances). 

Eligible Expenses

Expenses can include the cost of tuition, equipment, fees, supplies, and books. 
Education expenses do not include the cost of tools or supplies (other than textbooks) an employee is allowed to keep at the end of the course. Nor do they include the cost of lodging, meals, or transportation. 

Program Requirements

The program qualifies if all of the following tests are met: 
  1. Program benefits do not favor highly compensated employees. 
  2. Program does not provide more than 5% of the benefits to significant shareholders or owners. 
  3. Program does not allow employees to choose to receive cash (or other benefits that must be included in gross income) instead of Educational Assistance. 
  4. Employer gives reasonable notice of the program to eligible employees.


Employees of clients using our BeneScholar™ services are eligible for tuition discounts at participating schools. Discounts vary by degree or course type, so employees should visit the individual landing pages or contact the school directly for details.