An employer education benefit is one of the most effective ways to fund a graduate degree. Approximately half of U.S. employers offer some form of educational assistance, and these benefits can cover a substantial portion of tuition for qualifying programs. Despite their availability, utilization rates among eligible employees remain low.
This page outlines how employer tuition assistance functions, how it differs from tuition reimbursement, and how to apply either model toward a Boston University online graduate program. It is intended to provide the information required for an informed conversation with your employer’s HR team and with us.
What employer tuition assistance covers
Employer education benefits are referred to by several names, including tuition assistance, tuition reimbursement, education assistance, and professional development benefits. The specifics are determined by each employer, but most programs are governed by three parameters:
- An annual dollar limit. Many employers cap the benefit at $5,250 per calendar year, the amount the IRS permits an employer to provide tax-free under Section 127 of the Internal Revenue Code. Some employers exceed this threshold.
- Eligibility requirements. Programs may stipulate a minimum length of service, full-time employment status, or that coursework relates to the employee’s current or prospective role.
- Performance conditions. Reimbursement may be tied to a minimum grade requirement, typically a B or better, while other employers require only a passing grade.
The most reliable source for your specific benefit is your employer. Your benefits portal, employee handbook, or HR business partner can confirm whether a benefit exists, what it covers, and what approvals are required prior to enrollment.
*Accurate as of May 2026. We advise verifying with official documentation for any subsequent updates.
How the money moves: two payment models
Once an employer confirms a benefit, the next planning consideration is how the funds reach the university. Two payment models are typically available, each with different implications for the employee’s cash flow.
Tuition reimbursement
Under tuition reimbursement, the employee pays tuition up front and the employer reimburses the employee after the course or term concludes, generally upon submission of a passing grade. Because reimbursement is issued after term completion, the employee must arrange for the cost to be covered in the interim. BU offers interest-free monthly payment plans through Student Accounting Services, and federal or private loan options can serve as a bridge.
Direct employer billing
Under direct employer billing, Boston University invoices the employer for the covered portion of tuition, removing most or all of the up-front cost to the employee. For many employees, this model offers a more straightforward experience, since it eliminates the need to front tuition and wait for reimbursement after the term. It requires a brief setup arrangement between the employer and BU Student Accounting Services. If your employer is open to direct billing, ask them to contact us and we will guide them through the setup process.
How to apply the benefit at Boston University
Applying an employer benefit to a BU online program is a routine process. We coordinate the academic and billing components on your behalf; the employee manages the documentation their employer requires. The standard steps are:
- Confirm the benefit with your employer prior to enrollment, including any pre-approval form required for each term.
- Apply and enroll in your selected BU online program with our support.
- Submit proof of enrollment to your employer. We issue enrollment verification letters upon request.
- Provide grades and payment records after each term if your employer reimburses on completion.
If your employer does not offer tuition assistance
Many BU online students fund their degrees without employer support. The following options are available to qualifying applicants:
- Federal student loans. Most BU online graduate programs are eligible. Federal Direct Unsubsidized Loans are available to students who file the FAFSA using BU’s school code, 002130.
- Private education loans. BU recommends Credible.com as a no-cost tool for comparing credit-based loan options across multiple lenders.
- Monthly payment plans. BU Student Accounting Services offers interest-free payment plans that distribute tuition costs across the term.
- Veterans benefits. Boston University is a Yellow Ribbon school and accepts most VA education benefits. BU Veterans Services can assist with mapping your benefit to your program of choice.
Please note that online students are not eligible for Boston University’s internal Tuition Remission Program, which is a separate benefit reserved for eligible BU employees and their families. Employer tuition assistance refers exclusively to benefits provided by an external employer.
Frequently asked questions
Is employer tuition assistance taxable?
Under IRS Section 127, an employer may provide up to $5,250* per calendar year in educational assistance tax-free to the employee. Amounts above that threshold are generally treated as taxable income, although some job-related coursework may qualify for additional tax-free treatment. Confirm specifics with your HR team or a tax professional.
Will I be required to remain at my company after my degree is paid for?
Some employers include a service requirement, sometimes referred to as a clawback clause, requiring repayment of part of the benefit if the employee leaves within a defined period after reimbursement. Terms vary by employer and are typically detailed in the tuition assistance policy. Review them carefully prior to enrollment.
Does my coursework have to relate to my role?
This depends on your employer’s policy. Some employers require that the program relate to the employee’s current or future role; others apply more flexible standards. Your HR team can confirm what qualifies under your specific policy.
How long does employer approval take?
Approval timelines vary by employer and may range from a few business days to several weeks. We recommend initiating the conversation with your employer well in advance of your program’s application deadline.
Calculating your personal ROI
Salary averages are a useful benchmark, but they don’t tell the whole story. What matters more is the delta between where you are now and where a degree could realistically take you — and how long it takes to recoup the investment.
BU’s ROI calculator estimates your potential salary increase based on your current role, projected earnings over time, and the point at which the degree pays for itself. It’s a more honest way to evaluate the decision than comparing yourself to a median figure.
Speak with our team
Every employer’s benefit is structured differently, and most reimbursement and direct billing arrangements at BU are routine. We can review your situation, coordinate directly with your HR or benefits contact, and help you plan how to fund your program. To get started, contact us.
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Related reading: How to Ask Your Employer to Pay for Grad School