Education Reimbursement Benefit Options for Employers

You’ve heard the phrase “attract and retain top talent” probably more times than you can count, and for good reason. Employers need to differentiate themselves from their competitors and are often looking for ways to do it affordably. A great solution is to offer more benefits that address the needs of your staff and potential job candidates, specifically benefits that help pay for education costs. But what are the education reimbursement benefit options out there?

Education Reimbursement Benefit Options

As part of our Consumer Driven Accounts (CDA) benefit offerings, BASIC Education Accounts includes two types of plan designs: the Tuition Reimbursement Account and the Student Loan Reimbursement Account. Each one can help boost your benefits package for the top job candidates.

Tuition Reimbursement Account

This account is tax-advantaged and allows for reimbursement of tuition expenses, providing high-value benefit to both entice applicants and develop talent from within your organization. The first $5,250 funds (aggregated with Student Loan Reimbursement Account) are non-taxable to the employee.

Student Loan Reimbursement Account

Normally this account is not a tax-advantaged account. However, thanks to the 2020 CARES Act and the Consolidated Appropriations Act of 2021, employers can contribute up to $5,250 (until January 1, 2026, aggregated with Tuition Reimbursement Accounts) per employee per year tax-free to employees’ student loans. Student loan reimbursement remains one of the most sought after benefits that employers can offer. It’s a powerful recruiting tool that will reimburse a predetermined cap or percentage of an employee’s monthly loan payment.

Each account has parameters that can be customized. For example, choose to reimburse tuition for specific programs and require a minimum GPA, or choose to reimburse student loans after a commitment of employment and unlock higher reimbursement amounts over time to encourage staying with the company. These are only a handful of the custom options available!