Morgan Breese
Most high school senior students are starting to apply to college or will be in near future. When deciding where to go to college, cost can be a huge deciding factor. Most people these days consider going to college the norm as it is essential to earning a good salary, and improving one's quality of life. College however continues to be more expensive. One can attend a university or a tech school and still be potentially thousands of dollars in debt after graduation from college. As you can see in the graph, the average amount of student debt is around 35 thousand dollars. Additionally, over time the number of students graduating with student loans has increased. In 2014, 70.9 % of college students had graduated with some amount of debt.
With college tuition cost being a huge concern, employers began offering tuition reimbursement to employees to not only help minimize the amount of debt students graduate with, but to also retain good working employees. Under section 127 of the IRC (Internal Revenue Code) employers can provide a program that provides up to $5,250 per year in educational assistance to each employee on a non-taxable basis. Although, under this section of the IRC an employer can set a maximum reimbursement amount lower than $5,250. It can also reimburse more than that set amount, but the excess money supplied must be reported as taxable compensation to the employee. The only way it does not need to be reported is if the coursework is related to the employee’s current job description. Thus being said with this section of the economic growth and tax relief reconciliation act, more employers are offering such an opportunity. These opportunities are great looking forward for the economy.
When students are trying to save money, most are trying to seek these types of opportunities. Some companies that offer such an opportunity are Cigna Health Insurance, Aurora Health Care, Wells Fargo, UPS, Verizon, and many more. For full time employees Aurora offers $4,000 a year for any accredited program, and $7,500 a year for a BSN. Additionally, any employee that works over a .5 (20 hours a week) is eligible for reimbursement. UPS offers $5,350 a year, Wells Fargo offers $5,000 year, and Verizon offers $8,000 a per year. Cigna on the other hand offers the lowest amount of reimbursement being $5,250 for undergraduate courses. You can file for a federal tax deduction and up to $8,000 for graduate ones with Cigna. This program has been so successful that the company has raised their price ceilings to $10,000 and $12,000. Thus being said, with such great opportunities more people are working to help pay off college. Most companies require a one year commitment after graduation as a “thank you” for the significant amount of money each individual has received.
Unfortunately, people working while going to college does not affect the unemployment rate like when people are solely in college studying as then they are considered institutionalized. Although, when they are out of college and still working to pay their commitment to the company, they are considered within the employment rate. With more working as they have received an education, the unemployment rate will decrease. This projects great economic growth in our economy. With more working, less state funding will be necessary and people will be able to live a higher standard of living with more money and a stable job.
Works Cited
“Aurora Health Care Employee Benefit: Tuition Assistance.” Glassdoor, www.glassdoor.com/Benefits/Aurora-Health-Care-Tuition-Assistance-US-BNFT41_E121528_N1.htm.
Marcus, Jon. “The Reason Employers Help Workers Pay for College, | Money.” Time, Time, 7 June 2016, time.com/money/4353997/employers-helping-workers-pay-college-tuition/.
“Student Loan Finder.” 10 Companies That Offer Tuition Reimbursement To Pay For College, www.estudentloan.com/blog/10-companies-will-help-pay-college.
The fact that some employers offer tuition assistance is very helpful for the new employees fresh out of college, and in my opinion, will make the employees much more loyal to that company. If a job helped pay off my tuition, I wouldn’t want to leave that job so I think this method is creating loyal and hardworking employees while also helping students out.
ReplyDeleteI think it’s very interesting and awesome that companies are starting to provide these great opportunities for their workers. Personally a big deciding factor in my college decision making process was in fact the cost. A school that I was accepted into has crazy high tuition and an academic scholarship only brought it down to $40 k instead of $60 k a year. How crazy is that tuition? It’s a beautiful school and a great location full of many opportunities, but I would rather not be in debt the rest of my life...Therefore I think it’s very smart for employers to offer these programs in which they will pay of employees education it will give them the opportunity to gain these highly skilled workers with updates to their technology skills into their work field after graduation!
ReplyDelete-Anika King
I agree with Anika. That's insane tuition by the way I mean 20k a year is a big difference in the long run though. I one hundred percent agree that this is a good opportunity for people and will help benefit them all around. It will increase employees to be more loyal and want to work so they can pay off tuition and bills sooner than later. Ive never heard of this until now and its actually super cool.
ReplyDeleteThe one downfall to an agreement like this with an employer is that you are forced to work for them initially after receiving your degree, which could limit some opportunities that you may be presented with while in college. I do agree however that the price tag on college is extremely high today and having help from an employer that would bring the cost down would be nice. I think it would have to be a personal preference to choose to take part in a program like this because the positives may not always out weight the downfalls. Personally, in college I think that working a job in a hospital may be too much to handle while going to school full time since it is very important to not overwhelm yourself with work, but rather really take a lot of time to study. I think this is a great program for the right individual who is in need of the aid, but not for everyone.
ReplyDeleteAs our economy grows, so is the cost of college. College is so much that there are people that cannot afford to go. This is such a great opportunity for kids to be able to obtain financial aid for college and while also learning the responsibility of having a job. It takes a lot of time for someone to be working and also going to school so being able to commit and be able to continue to succeed in school while also having a job that you get ideas about what you will be doing once you have completed school is even better. Not only does this help companies ensure that they have workers but also ensures that they are trained well enough in order to be at the highest level of education they want to be and be in the job role they want. This is such a great option for students in order to become and thrive in what they were meant to do.
ReplyDeleteI agree with the fact that this will lead to a decrease in the unemployment rate and help everyone in the long run. The fact that you can leave college with all of that debt, but be helped out by your employer in paying it back? That is a great incentive for more people to work at these places, which could also help the companies as well, so it would not surprise me if we see more and more companies getting involved in this and providing people with money after college.
ReplyDeleteIt is a very nice and good deed that people do things like this for other people. Because people think oh 5,000 dollars is nothing but in fact there wrong because free money towards paying off a debt is the best thing. For that the person that got the tuition would be a lot happier towards that company and so you would have a loyal person and you company. With that its better to have that than a person that doesn't like his or her job.
ReplyDeleteThis builds the loyalty of the employees they get straight out of college. By helping them pay of their debts, the employers get a fresh out of college employee who will stay with the company for at least a year after their graduation and is likely to continue with the company afterward. This could help companies, as straight out of college students generally work at lower wages because they have little experience and the companies are likely going to save money training new hires because the college students will likely have a continued loyalty with the company.
ReplyDeleteCollege is practically essential in order to get a well paying job in today's society, and they know that. Due to the inelasticity of college, they can charge almost anything they want and leave students paying off student loans for years. Reimbursement makes the decision to go to college for jobs that require more years of college than usual, like jobs that require masters or doctorates.
ReplyDeleteI think it's important that more companies adopt these tuition reimbursement practices as it provides incentives for students to get a higher education. Ultimately, citizens that are educated to a higher degree will only result in a society full of informed, qualified professionals that can contribute to the economy. When students' have the incentive to go to school because they know a job is avaliable to them, they do not have to fear unemployment. As a student myself, I am wary of investing in education because of the fear of paying for this degree and having difficulty finding a paying job. In this day and age it is essential to get an education or a degree if you want a job that pays the bills. I think tuition reimbursement is contributing to an increase in education because individuals that could previously not afford education now have an oppurtunitity to continue their learning without having to go into debt. All in all, I think this practice will allow the workforce to benefit as more educated people join and are encouraged to continually earn higher degrees through the support of their employer.
ReplyDeleteThis new tactic that companies are using to help pay off student debt seems very helpful and will give more of an incentive to continue education or to seek a post-graduate degree. Because of the increase in percentage in student debt, every penny matters when paying it off. Offering this to freshly graduating students will contribute to decreasing the unemployment rate, as many new employees will be more loyal to their employers.
ReplyDelete