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#1688861 - 04/13/12 09:44 PM Tuition Assistance for Masters?
HR Banker Offline
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We have a policy of providing tuition assistance to employees that take college courses that benefit them in their position with us. The question has come up of would we pay for someone to get their MBA (actually pay the cost, not just the portion we normally pay for college courses). It seems an employee has talked to another institution that does this. I'm sure there are stipulations and details I am not aware of but just wondered if this is a common practice of paying for a Masters degree.

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#1688933 - 04/16/12 01:00 PM Re: Tuition Assistance for Masters? HR Banker
AFaquir Offline
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Common... No. Definitely not unheard of though, a couple of my B-school classmates were being "sponsored" by their employer. Some full, some halfsies, some 10-25% partials... just depends.

Commonly, at least as I have ever seen it, a company that pays for an MBA usually requires a tiered reimbursement if the employee doesn't stay past X amount of years AFTER earning the degree. Or they use a tiered benefit to reduce the years of service requirement... It is also usually only available based on position in the company... AVP, VP, etc, but not always... (and to me defeats the purpose of this type of program).

For example a company that pays the full amount of tuition might require 5 years of service AFTER the degree... and completion of the program within 5 years of starting, since part-time MBA progams usually require 3-4 year commitments. So essentially they are locking that employee up for a 8-10 years in terms of covering the costs.

Alternatively a company could say, we'll go halves on an MBA with the employee and only require that they finish the program and a 2 or 3 year employment contract after graudation.

A 10% program may require completion, but no level of comittment after earning the degree.

One thing to consider if you want to get involved in this type of program is... 1 clearly describing what costs you will pay for (class tuition only? books? other class materials?). Discuss the requirements for pay back and any legal obligations (consult a K-law attorney and your HR attorney). Set your expecations to a normal level... if the employee is only fair to midland before the program, chances are they are not going to be a better employe after earning an MBA... Also make sure the employee KNOWS your expectations of their job performance during the program.

Lastly, understand the employees expectations after earning an MBA... (re: More money). For better or worse an MBA generally makes an employee, especially an experienced one, more valuable on the open market. If they make 50K when they start and 60K by the time they finish the program... they will likely want 100K+ after they graduate and they may be able to get it somewhere else. So even repaying you the tuition costs may not matter to them if someone else is willing to pay them bigger $$$... So if you are using your MBA tuition program as a way to attract and RETAIN talented individuals, be prepared to sort of over pay the price of the MBA and the salary after graduation... which isn't a bad deal in some circumstances if they are talented... but a pretty raw deal if they are the "fair to midland" employee...

Hope that sheds some light.

Cheers!







Last edited by AFaquir; 04/16/12 05:49 PM. Reason: terrible typist
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#1689015 - 04/16/12 02:53 PM Re: Tuition Assistance for Masters? HR Banker
ACBbank Offline
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Most banks in my area do not. However, there are some organizations like law firms, hedge funds, etc. which do offer this type of assistance. To avoid the employee simply leaving, they have to sign a contract stating they will stay on staff for X number of years or pay X amount back to the company. This should be detailed and well documented.

I can't imagine you want to send an employee to get an MBA and then have them walk out the door.
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#1689072 - 04/16/12 04:13 PM Re: Tuition Assistance for Masters? HR Banker
HappyGilmore Offline
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Pulling people out of the ditc...
I also don't see why you'd agree to foot any portion for a "fair to middling" employee.

The companies in my area that do this usually select the programs that are every other friday/saturday and cover 17-24 months, depending on the school...

I'm only aware of 1 bank that did this, and then they fired the guy they sent, after he had completed his degree. Since the "contract" for repayment stipulated repayment if he tendered his resignation, the bank was out a $45k investment...they tried to tell him he owed it and he said "sue me."
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#1689138 - 04/16/12 05:52 PM Re: Tuition Assistance for Masters? HR Banker
AFaquir Offline
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AFaquir
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I would never let a fair to midland employee do this, but that's the challenge with these programs. A lot of times its a "blanket" tuition policy and the only people who inquire are the ones you don't want to send.

I think it should be done on an evaluation basis to avoid the "fair to midland" employee... but do you run into "fair treatment" issues if you are too selective with who gets the tuition... etc.

They can be EXCELLENT benefit programs if you understand what it takes to run them...
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#1689202 - 04/16/12 07:44 PM Re: Tuition Assistance for Masters? HR Banker
waldensouth Offline
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I've had 2 employees obtain their MBA thru our tuition reimbursement program. The supervisor has to approve this - then it must go to HR for their review. We reimburse tuition based on grades - 100% for an "a", 90% for a "b", 80% for a "c" and nothing for anything less. They must stay for a period of time after they acquire the degree or repay the bank for the funds we reimbursed them. There is an agreement that the employee has to sign.

It can be an excellent benefit.
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#1689204 - 04/16/12 07:45 PM Re: Tuition Assistance for Masters? AFaquir
A_G Offline
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I am familiar with employers who reimburse based on grades. A = 100% reimbursement, B = 75%, etc.
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#1689810 - 04/18/12 02:13 PM Re: Tuition Assistance for Masters? waldensouth
ACBbank Offline
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Originally Posted By: waldensouth

It can be an excellent benefit.


I couldn't agree more. If more banks offered benefits such as this, I don't think employee turn over would be so high.
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#1711858 - 06/19/12 06:38 PM Re: Tuition Assistance for Masters? HR Banker
WonderWoman Offline
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gone fishin'
We offer very limited assistance for education (it's better than it was). Non graduate programs get $500 a year & Graduate programs get $1,000 per year.

However, for the Graduate programs, the employee has to pay it back if they leave within 2 years or something like that.
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