From the May 2001 issue of Entrepreneur

Looking for an employee benefit that delivers a big bang for the buck? Consider tuition reimbursement.

"If you invest in your employees, it comes back," says Michelle Lemmons-Poscente, 39, president and CEO of International Speakers Bureau Inc. in Dallas. Lemmons-Poscente's 30-employee company pays 50 percent of the cost of any personal or business development course taken by employees who have been on board at least six months. "We only pay 50 percent because we want the employee to be 100 percent committed, and we believe that if they have skin in the game, they are much more so," she explains.

Tuition reimbursement works as a benefit employees appreciate while enhancing their value to the company as their knowledge and skills increase. Before setting up your own tuition-reimbursement program, consider the following points:

  • What you'll pay for. Will you reimburse strictly for college-level degree courses, or will you also pay for personal enrichment programs or noncredit courses? If you have an employee working toward a degree, will you pay for things that get him or her closer to that goal without actually enrolling in classes, such as skill-level testing?
  • How much you'll pay. Will you reimburse all or a portion of the tuition? What about books? Will there be an annual cap on the amount you'll pay for each employee? Consult with your accountant about the tax ramifications for both the company and the employee before making this decision.
  • The employee's obligation. Will employees be required to complete their classes with a certain grade level to receive reimbursement? What will happen if they fail? Are employees required to stay with the company for a specific length of time after they receive the benefits or pay back the money if they leave too soon?
  • Scheduling flexibility. Will you structure working hours to accommodate school schedules?

Though tuition reimbursement can be a significant investment, it shows your workers you're interested in their self-improvement-and that can pay off big in employee retention and enthusiasm.


Jacquelyn Lynn left the corporate world more than 14 years ago and has been writing about business and management from her home office in Winter Park, Florida, ever since.