2019 was an exciting year for TuitionManager. The system had a record number of reimbursement requests, applications submitted, and participants. Below we
have put together summary data across all TuitionManager clients.
TuitionManager experienced significant improvements in 2019. We released version 5.0, which included significant design updates, enhanced functionality, and improved reporting capabilities, including the much-appreciated dashboard. Additionally, student loan assistance was added to the system so that clients can now manage both their tuition assistance and student loan assistance programs within TuitionManager. Student loan assistance continues to be one of the most sought-after benefits from new graduates and employers are taking notice, offering this new benefit in record numbers beginning in 2020.
2020 promises to be an even more exciting year with two major updates to TuitionManager: The first will be new advanced functionality to offer multiple courses on a single application, and the second will be the addition of degree planning at an employee level.
Multiple courses on an application will simplify the process for both employees submitting tuition applications for approval and program administrators reviewing & approving the applications. Multiples courses on an application will also eliminate issues and confusion when applying grants, scholarships, and other one-time fees across multiple courses.
Degree planning will allow users and administrators to see the employee’s degree progress when completing a multiple-term degree program. Degree planning will provide greater visibility and insight into the expected spend in the upcoming term and years, as well as assist employees with staying on track for degree completion. The objective is to provide greater visibility so that employees only take the necessary courses for degree completion, enabling employees to complete their degree faster, which will save tuition reimbursement money.
The new system upgrade is expected to be available in Q2 of 2020.
Finally, HostedHR will continue to build partnerships with colleges and universities to offer discounts, deferred payment programs, direct bill, and grants to TuitionManager clients.
The majority of TuitionManager clients have a two-step reimbursement process. With a two-step process the employee submits a tuition application for pre-approval
prior to taking a course. The pre-approval ensures the employee that if the course is successfully completed according to the employer's policy then the employee
can expect to be reimbursed for the course.
A two-step reimbursement process allows the employee to know prior to enrolling in a course if the employee is eligible and the educational costs are reimbursable. This eliminates questions or confusion when trying to be reimbursed after a course is completed and the educational costs paid.
Balances can be calculated in one of two ways: based on the entered date (start or end), or paid date. Paid date will more accurately enforce IRS limits. However,
since the system has no way of determining when an application will be paid in the future, the employee cannot accurately know in advance of his or her remaining balance.
The alternative to paid date is calculating based on the start or end date of the course, which allows the system to determine the employee's available balance so the employee can see his or her remaining balance as he or she fills out the tuition application. While start and end date balance calculations eliminate uncertainty regarding remaining balances, employees may have to pay tax if payment does not occur until the following year and the employee exceeds the IRS limit of $5,250 per calendar year.
Many clients offer the IRS limit of $5,250 and typically use a paid date balance configuration to enforce the IRS limit for employees. The majority of clients offer a lower limit. A minority of clients offer very generous and competitive tuition assistance programs with reimbursement limits well over the IRS $5,250 limit. A company's decision on what annual limit to offer depends on the company's budget and industry. Tuition assistance programs can provide a company with a competitive advantage when it comes to recruitment and retention. Many education partners are beginning to offer grant programs so that employees can obtain a degree debt-free by utilizing their employer's tuition assistance money.
Through the end of 2019, 6% of TuitionManager clients offered Student Loan Assistance. By the end of Q1 2020, that number is expected to rise to 18%.
1 Abbott survey conducted by YouGov
2 Employers Try a New Perk: Matching Student Loan Payments With 401(k) Contributions – WSJ, 10/10/2019
3 2017 survey by American Student Assistance
SLRAPs are growing in popularity and receiving significant attention as a result of the improved recruitment and increased retention employers are experiencing from the new benefit. SLRAPs offer employees a monthly payment towards the principal of their student loans. Typically, there is a lifetime limit on the policy. Employers offer competitive SLRAPs in order to attract and retain the best talent. All amounts paid to a SLRAP are taxable income for an employee.
Student Loan PTO Exchange is a creative solution to allow employees to elect to use accrued and unused PTO towards student loan relief. Employees are eligible to receive student loan relief based on the employee's hourly wage rate and hours earned toward PTO. Employers either offer a dollar limit to the policy so that all employees are eligible for the same annual payment amount or an hour limit, typically 40 hours, to the amount of PTO that can be exchanged for loan relief. Student Loan PTO Exchange is a substantial benefit for employees to utilize toward financial well-being.
Matching employee student loan payments with an employer contribution to the employee's 401(k) plan drastically improves the employee's ability to save for retirement at a younger age. Employees making student loan payments are eligible to receive their employer's 401(k) contribution match. Empowering employees to begin saving for retirement while still being able to pay off student debt is a significant long-term financial advantage and benefit for employees.