There is a tax law most employees never know about. Under IRS Code Section 127, your employer can give you up to $5,250 per year for education expenses completely tax-free. You do not pay income tax on it. They get a tax deduction for offering it. And you walk away with money for school.
The problem is that most companies offer this benefit but most employees never ask about it.
Which Companies Offer Tuition Reimbursement
You might be surprised how many do. Large companies are the most likely to have formal programs, but some medium-sized employers have them too. Some well-known ones:
| Employer | Program Name | Benefit |
|---|---|---|
| Amazon | Career Choice | Up to $5,250/year for in-demand fields |
| Walmart | Live Better U | Full tuition at partner schools for $1/day |
| Target | Dream to Be | Up to $5,250/year |
| Starbucks | Starbucks College Achievement Plan | Full tuition at Arizona State Online |
| UPS | Earn and Learn | Up to $5,250/year |
| Home Depot | Tuition Reimbursement | Up to $3,000 to $5,000/year |
| Bank of America | Education Assistance Program | Up to $5,250/year |
| Chipotle | Cultivate Education | Up to $5,250/year |
If your employer is not on this list, that does not mean they do not have a program. It means you need to ask.
How to Find Out If Your Employer Has a Program
Check your employee handbook first. Look for sections labeled "educational assistance," "tuition reimbursement," "tuition assistance," or "learning and development." If it is there, it will describe the eligibility requirements, how to apply internally, and what courses or degrees qualify.
If the handbook does not mention it, call or email your HR department directly. Ask: "Does our company have an educational assistance or tuition reimbursement benefit?" Be direct. HR staff answer this question regularly and will give you a yes or no quickly.
Common Program Requirements
Programs vary, but here are the most common requirements you will encounter:
- Minimum tenure: Most programs require you to have been employed for at least 6 to 12 months before applying.
- Grade requirement: Many programs require a B or higher to receive reimbursement. Some require a C or better for passing credit.
- Relevant coursework: Some employers only pay for courses related to your current role or a role within the company. Others allow any accredited degree program.
- Repayment clause: If you leave the company within one to two years of receiving tuition reimbursement, some employers require you to pay it back. Read this section carefully.
- Approval in advance: Most programs require you to get manager or HR approval before enrolling. Do not assume you can start a class and ask for reimbursement afterward.
Find More Ways to Fund Your Education
Employer reimbursement is one piece. My free grant finder shows you every other source of funding you qualify for on top of it.
Find My GrantsHow to Stack Employer Reimbursement with Other Grants
Employer reimbursement counts as a resource on the FAFSA, which can reduce your Pell Grant eligibility. But there are ways to structure this so you benefit from both.
If your employer pays $5,250 per year and your total cost of attendance is $12,000, you still have $6,750 in unmet cost that grants, scholarships, and other aid can cover. File the FAFSA and report your employer assistance. Your aid package will reflect the remaining need.
Some women use employer assistance for tuition and Pell Grant money for books, fees, and living expenses. Both serve different parts of your budget.
What If You Work Part Time or Are a Seasonal Employee
Part-time employees are eligible for tuition assistance at some companies. Amazon's Career Choice program is open to hourly associates. Starbucks requires an average of 20 hours per week. Chipotle's program is available to all crew members.
If your employer does not offer it to part-time workers, consider whether moving to a company that does makes sense for your situation. For women returning to school, an employer with strong education benefits can be worth a lateral career move.
How to Make the Internal Request
Once you know the program exists and you meet the requirements, the process is usually:
- Fill out your company's internal application or request form (HR will have this).
- Get your manager's approval signature if required.
- Submit proof of enrollment and the course cost.
- After completing the course with the required grade, submit your transcript and paid receipt for reimbursement.
Keep copies of everything. Reimbursement paperwork sometimes gets lost in large companies. Having your own records prevents delays.
Last reviewed: July 2026. Employer benefit details may change. Confirm directly with your HR department for current terms.
Frequently Asked Questions
Is employer tuition reimbursement taxable income?
No, up to $5,250 per year. Under IRS Code Section 127, educational assistance up to that amount is excluded from your taxable income. Any amount your employer pays above $5,250 is taxable as regular income.
Can I use employer reimbursement for an online degree?
Most programs accept accredited online programs. Some employers have preferred school partners. Check whether your program is on an approved list before enrolling.
What if my employer says no?
Some smaller employers do not have formal programs. You can still ask whether a one-time arrangement is possible. Frame it as an investment in skills that directly benefit your role. Some managers have discretionary budgets for professional development. It is worth a direct conversation.
Does my employer's tuition reimbursement affect my FAFSA?
Yes, it counts as a financial resource and may reduce your Pell Grant. Report it honestly on your FAFSA. In most cases, your total aid including employer reimbursement is still less than your total cost of attendance, so you will still receive some grant funding.
