When does it make financial sense to take advantage of employer's tuition reimbursement program?
"If you have decided to do the degree, and are simply deciding whether to accept employer funding for it or not, take the funding. I see no difference between ""my employer doesn't pay my tuition"" and ""my employer paid my tuition but I had to pay it back because I moved on"". Therefore there is no downside to letting them pay the tuition. If you want to move on before the two years (or whatever) is up, you pay back that interest free loan. You are still ahead over self funding the degree. If you have not decided to do the degree, and are letting the employer-funded tuition figure into your decision process, stop that right now. Doing a degree is hard work. You will either work much longer hours than you do now, or live on a lower salary, or more likely both. You might enjoy it, you might be worth more afterwards, and it might open the door to a raft of careers available only to those with the degree. The actual cost of the tuition is unlikely to be significant in this decision process. Removing it (by assuming the employer pays it) should still not be done. If it's worth doing when you self fund, then do it and relax knowing you won't feel trapped at your employer even if you let them pay it (or lend you the money for it if you end up leaving.)" If you know that you want that advanced degree; And there is a way to have your employer pay for some of it or all of it; And you are reasonably certain that you will not be quitting for X years after completing the degree; Then it is financially sound to consider having the company pay for it. If you are interested in finding out if an advanced degree in that field is possible/feasible for you; but you aren't 100% sure; And it is possible for your company to pay for the first few classes; then it is financially sound to consider having them pay for the first semesters worth of classes. The key is to determine if the company has a requirement that you must complete the degree, or you will owe them the money. In many cases you are not committed to having them pay for all semesters. I have known employees who used the company to pay for the early classes, then paid for the last few on their own.  Keep in mind that most employers only pay you for the classes that you have good grades; they require you to submit paperwork before the semester; but don't pay you back until after the semester. Because of a rolling time frame you can protect yourself by keeping in reserve the maximum amount that you would have to repay the employer if you quit. For the companies I have worked for you only had to stay an extra year, you would only have owed them for that last year if you quit. Keeping a years tuition in reserve allows you to mitigate the risk of having to quit. If the question is about risk, then hedging make sense.
This very topic was the subject of a question on workplace SE https://workplace.stackexchange.com/questions/8996/what-can-relocation-assistance-entail TL/DR;  From tax publication 521 - Moving expenses table regarding how to report IF your Form W-2 shows... your entire reimbursement reported   as   wages in box 1         AND you have... moving expenses    THEN... file Form 3903 showing all allowable  expenses,* but do not   show any   reimbursements. There are tax implications Covered in tax publication 521 - Moving expenses and Employers tax guide to Fringe Benefits related to moving expenses. From the Employers View: Moving Expense Reimbursements This exclusion applies to any amount you directly or indirectly give to an employee, (including services furnished in kind) as payment for, or reimbursement of, moving expenses. You must make the reimbursement under rules similar to those described in chapter 11 of Publication 535 for reimbursement of expenses for travel, meals, and entertainment under accountable plans. The exclusion applies only to reimbursement of moving expenses that the employee could deduct if he or she had paid or incurred them without reimbursement. However, it does not apply if the employee actually deducted the expenses in a previous year.   Deductible moving expenses.   Deductible moving expenses include only the reasonable expenses of: Moving household goods and personal effects from the former home to the new home, and Traveling (including lodging) from the former home to the new home. Deductible moving expenses do not include any expenses for meals and must meet both the distance test and the time test. The distance test is met if the new job location is at least 50 miles farther from the employee's old home than the old job location was. The time test is met if the employee works at least 39 weeks during the first 12 months after arriving in the general area of the new job location. For more information on deductible moving expenses, see Publication 521, Moving Expenses. Employee.   For this exclusion, treat the following individuals as employees. A current employee. A leased employee who has provided services to you on a substantially full-time basis for at least a year if the services are performed under your primary direction or control. Exception for S corporation shareholders.   Do not treat a 2% shareholder of an S corporation as an employee of the corporation for this purpose. A 2% shareholder is someone who directly or indirectly owns (at any time during the year) more than 2% of the corporation's stock or stock with more than 2% of the voting power. Treat a 2% shareholder as you would a partner in a partnership for fringe benefit purposes, but do not treat the benefit as a reduction in distributions to the 2% shareholder. Exclusion from wages.   Generally, you can exclude qualifying moving expense reimbursement you provide to an employee from the employee's wages. If you paid the reimbursement directly to the employee, report the amount in box 12 of Form W-2 with the code “P.” Do not report payments to a third party for the employee's moving expenses or the value of moving services you provided in kind.  From the employees view: The not be included as income the expenses must be from an accountable plan: Accountable Plans To be an accountable plan, your employer's reimbursement arrangement must require you to meet all three of the following rules. Your expenses must have a business connection – that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer. Two examples of this are the reasonable expenses of moving your possessions from your former home to your new home, and traveling from your former home to your new home. You must adequately account to your employer for these expenses within a reasonable period of time. You must return any excess reimbursement or allowance within a reasonable period of time. Also what is interesting is the table regarding how to report IF your Form W-2 shows... your entire reimbursement reported   as   wages in box 1         AND you have... moving expenses    THEN... file Form 3903 showing all allowable  expenses,* but do not   show any   reimbursements. "There is not one right way. It depends on the level of detail that you need. One way would be: Create the following accounts: When you pay the phone bill: When you are paid with the reimbursement: That is, when you pay the phone bill, you must debit BOTH phone expense to record the expense, and also reimbursements due to record the fact that someone now owes you money. If it's useful you could add another layer of complexity: When you receive the bill you have a liability, and when you pay it you discharge that liability. Whether that's worth keeping track of depends. I never do for month-to-month bills. Afterthought: I see another poster says that your method is incorrect because a reimbursement is not salary. Technically true, though that problem could be fixed by renaming the account to something like ""income from employer"". The more serious problem I see is that you are reversing the phone expense when you are reimbursed. So at the end of the year you will show total phone expense as $0. This is clearly not correct -- you did have phone expenses, they were just reimbursed. You really are treating the expense account as an asset account -- ""phone expenses due to be reimbursed by employer""." "I speak from a position of experience, My BS and MS are both in Comp Sci. I know very little about loans or finances. That is very unfortunate as you are obviously an intelligent human being.  Perhaps this is a good time to pause your formal education and get educated in personal finance.  To me, it is that important. I study computer science, and am thus confident that I will be able to find work after I finish school. This kind of attitude can lead to trouble.  You will likely have a high salary, but that does not always translate into prosperity.  Personal finance is more about behavior then mathematics.  I currently work with people that have high salaries in a low cost of living area.  Some have lost homes due to foreclosure some are very limited in their options because of high student loan balances.  Some are millionaires without hitting the IPO/startup lotto.  The difference is behavior. It's possible that someone in my family will be able to cosign and help me out with this loan. This is indicative of lack of knowledge and poor financial behavior.  This kind of thing can lead to strained relationships to the point where people don't talk to each other.  Never co-sign for anyone, and if you value the relationship with a person never ask them to co-sign. I'll be working as a TA again for a $1000 stipend. Yikes!  Why in the world would you work for 1K when you need 4K?  You should find a way to earn 6K this semester so you can save some and put some toward the loans you already acquired.  Accepting this kind of situation ""raises red flags"" on your attitude towards personal finance.  And yes it is possible, you can earn that waiting tables and if you can find a part time programming gig you can make a lot more then that.  Consider working as a TA and wait tables until you find that first programming gig. I am just about done with my undergraduate degree, and will be starting graduate school at the same university next semester. To me this is a recipe for failure in most cases.  You have expended all your financing options to date and are planning to go backwards even more.  Why not get out of school with your BS, and go to work?  You can save up some of your MS tuition and most companies will provide tuition reimbursement.   Computer Science/Software Engineering can be a fickle market.  Right now things are going crazy and times are really good.  However that was not always the case during my career and unlikely for yours.  For example, Just this year I bypassed my highest rate of pay that occurred in 2003.  I was out of work most of 2004, and for part of 2005 I actually made less then when I was working while in college.  In 2009 my company cut our salaries by 5%, but the net cost to me was more like a 27% cut.  In 2001 I worked as a contractor for a company that had a 10% reduction in full time employees, yet they kept us contractors working.   Recently I talked with a recruiter about a position doing J2EE, which is what I am doing now.  It required a high level security clearance which is not an easy thing to get.  The rub was that it was located in a higher cost of living area and only paid about 70% of what I am making now.  They required more and paid less, but such is the market.  You need to learn about these things! Good luck." Must pay your bill at least 6 months consecutively for the benefit to take effect. Confirmed by customer service.  The rep did tell me that she didn't know much about the new program when I asked her other questions (like is it in a form of a reimbursement or does WF pay the vendor directly). I am hoping the cellphone protection takes effect immediately.   Can anyone confirm that 6 consecutive payments is a requirement? Perhaps business actually like this expenditure then? I guess it would be beneficial for them in that they, in a way, coerce employees from not leaving. Trying to find another job with equal insurance can be rather rough. "Reimbursements for business expenses are generally not taxable, but the commute from home to the job and back is not considered business travel and if they're paying for that it is taxable income. I don't think carpooling changes that, but I am not a tax lawyer or accountant. The rest of your questions seem to be company policy issues. There is no ""should"" here. You aren't required to pick up the other guys, but he isn't required to reimburse those miles (or employ you) so think carefully about your priorities before pushing back. Never invoke what thou canst not banish." Having been in the situation of commuting and working long hours at a low wage to just scrape by, I faced the following dilemma: I used all my income to pay bills and taxes and could not afford to go back to college to get another degree (or pay for distance learning). Even if I could afford to pay for classes, I couldn't figure out when I'd have the time to study because I was often only home 9 hours a day and needed to eat and sleep, shower and get ready for work. A wealthy friend of mine liked to read books about people who overcame great obstacles and she was sure I could figure out lot a way to improve my situation if I'd just try harder. One day I handed her a piece of paper showing my income after taxes and monthly bills and asked her to get back to me with a plan that would allow me to afford classes and give me say, an average of 6 hours of study time per week. She was happy to do it. Here was her longed for opportunity to show me it was possible to pull myself up by my bootstraps. After she studied my income, expenses and schedule, she decided she couldn't devise a plan that would work and she never again told me I wasn't trying hard enough. "I'd check the terms of the student loan. It's been a long time since I had a student loan, but when I did it had restrictions that it could only be used for educational expenses, which they pretty clear spelled out meant tuition, books, lab fees, I think some provision for living expenses. If your student loan is subsidized by the government, they're not going to let you use it to start a business or go on vacation ... nor are they likely to let you invest it. Even if it is legal and within the terms of the contract, borrowing money to invest is very risky. What if you invest in the stock market, and then the stock market goes down? You may find you don't have the money to make the payments on the loan. People do this sort of thing all the time -- that's what ""buying on margin"" is all about. And some of them lose a bundle and get in real trouble."