Tuition remission/loan payment, etc.....

[DawnM]

I may be overthinking this, but hear me out.

 

When I went to college, my parents paid for it, in full, upfront.  They didn't believe in taking loans.

 

I then went to get my first job and the school district was offering loan repayment up to $5,000 per year of service for up to 5 years (I may have the numbers a bit off, it has been a LONG time, but it was something like that, maybe a little less.)

 

I didn't qualify because I had no loans, and they didn't offer cash out, they would only pay directly to the loan company.  It stunk.  My parents could have really saved some money.

 

So, we are thinking of having some loans in place, and saving the balance in a savings account for the time being.  

 

My question is this:

 

Has anyone else worked for a company that offered loan repayment upon years of service for school?  

 

I know it works differently different places.  In NC, when they have a teacher shortage, they offer free tuition at school up front, and for every year of college they pay, you *owe* them that many years to live and work in NC.  If you don't finish or don't stay in NC, you owe the money back.

 

But I don't just want to know about teachers......any other stories you have?

 

[DawnM]

And no, i am not asking what companies do this so that my child can work for a particular company.....I am simply asking if anyone else has seen this in a company.

[MommyLiberty5013]

Some do as part of engaging and enticing new employees...my experience says it's not many companies that do it (I could be wrong), that they are typically for higher wage earning white collar jobs, and the new employee MUST legally remain in the business for a set amount of time like multiple years. They get locked in.

[QueenCat]

I've really only seen that from govt entities, such as public schools and public hospitals. With companies, I've seen tuition assistance but not where they pay for schooling you did before you worked for them. Dh used to work for a company that paid in full for degrees (including grad school) that were earned while working there.

[forty-two]

There's a federal program that offers federal loan forgiveness (so not any private loans or parental loans) after 10 years of "serving the public" kind of careers, whether employed by the government or by a non-profit. (Technically, it's after making 120 loan payments.) It can be a religious employer, but your work has to be non-religious in nature. (If, say, half of your work is non-religious in nature, then you can count that half, and after twenty years you'd have hit 10 years of non-religious public service.). I don't know how it is working in practice, since people were only eligible for forgiveness in the past year (ten years after the program started). Here's a link: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service

[DawnM]

Thanks.  I did work for the government, so that may be part of it.

 

Interesting about federal loans vs. other kinds of loans.  

[Frances]

My husband was given a set amount of loan forgiveness over five years for a hospital job. Going in to his grad program, we knew it was a strong possibility, so we did plan to do some loans. The tuition for his four year program also almost doubled from the first to the last year, so even had we not been planning on loans, we would have had some the last year because we hadn't anticipated that large of a tuition increase.

 

We did have to stretch our payments over five years to take full advantage of the hospital payments. Had it not been for the hospital program, we likely would have paid them off in a few years. After the hospital completed their payments, he still owed some additional work time before he had no obligation to repay them some $ if he left. I don't remember the exact time, but they had a formula that each hour worked counted as so much loan $. I think it was about two additional years.

 

And yes, the hospital paid the loans servicing company directly. I don't know if he could have negotiated other $ in lieu of loan payments, but I kind of doubt it, since he was also given a signing bonus.

[goldberry]

In our state we have it for teachers, but I've never seen it elsewhere.  Hospitals offer tuition assistance but not retroactive.

[Carol in Cal.]

I have only seen companies reimburse for tuition incurred while employed.

 

Also, on the loan forgiveness for public service, I think that the IRS looks at that forgiven amount as income in the year it's forgiven, so be careful of that.  It's like phantom income--you're forgiven $10,000, so they say, OK you owe income tax on $10,000.  But you don't actually have the $10,000 and of course there was no withholding on it.  So all the sudden you have to come up with that tax, and it might even push you into a higher bracket.

 

I am not sure of all the ins and outs of this, but I would suggest talking it over with a tax preparer before figuring on this strategy.  It will take some planning for sure.

Edited August 27, 2017 by Carol in Cal.

[Crimson Wife]

My last employer offered tuition reimbursement for courses related to one's job but they were fairly lenient about what counted as "related". I took several courses that were not related to the job I had at the time but were relevant to more senior-level jobs in the finance department. They would've helped to pay for a part-time MBA program if I had stayed at the company (my boss' boss had done one and was encouraging me to follow in her footsteps).

 

There was a dollar limit on the tuition reimbursed per semester, a minimum grade in the course, and employees had to stay for at least 6 months after finishing each semester or else repay the company.

 

My DH's current employer has some sort of tuition reimbursement but he's already got his MBA so I'm not sure what he could take that would be seen as related to his job.

[HSMWB]

I worked for a university that had an MBA programs - many (mostly financial and engineering) firms paid the tuition for their employees to take the classes. I am not sure what kind of agreement was in place between the firm and the student, just that the firm paid the tuition bills, and often the books as well. Every once and a while we had to send the grades to the companies as well.

[EmilyGF]

My BIL had this for his government job. He carefully kept certain student loans unpaid because he knew he'd eventually have a "hardship" relocation that would offer tuition remission.

 

Emily

[Forget-Me-Not]

Loan forgiveness and loan repayment are different. With loan forgiveness, the debt is wiped out if/when the terms are met. My husband had a forgiveable loan that was wiped (forgiven) out when he worked in an underserved area after graduation.

 

He also qualified for loan repayment for working in the same underserved area. He got varying amounts per year/two years depending on how long he'd served, how many terms he'd applied/re-applied for, how needy the area was, etc. The money was given directly to us and it was up to us to then pay the lender. We just had to prove that the same amount went to the lender during the term of the contract. The money was tax-free and NOT considered income, but it came through a government agency, not directly from his employer.

Edited August 27, 2017 by Forget-me-not

[Jean too]

I don't think NC offers the Teaching Fellows any more. It was for $6,500/year for four years (not a full ride) to be paid back by forgiveness of $6,500/year of teaching.

[catz]

In tech, I've only seen tuition reimbursement.  And in that case, only for very specialized programs.  I have a double major and the last couple classes of my 2nd degree was paid. 

 

You and your parents may have thought it stunk not to benefit from that particular program that particular employer happened to provide.  But it is still a huge gift to be able to graduate college with little to no debt.  It gives you a lot more flexibility in terms of employment and life style in general not to be strapped to huge college debt payments.  I do think planning for programs like this would be really hard to do well in advance of college graduation.  It would apply to a very narrow set of degrees and a narrow set of employers. 

 

The other thing to consider is that students can only borrow $5500 per year right now for an undergrad degree in their own name.  Any other loans are in the parents name and become the parent's responsibility.  It seems unlikely to me that an employer would take on larger loans that parents chose to take out for their child's higher education.  When you fill out financial aid info, you will get a break down of student loans vs. parent responsibility vs. financial need vs. merit money, etc.  So research that bit carefully if you are looking at programs like this.   That said, I don't necessarily think it's bad for students to utilize some money via Perkins loan.   Even if you intend to help pay off later.  It can make a student more invested in their success and education and maybe think about maximizing summer earnings, etc. 

[alisoncooks]

I don't think NC offers the Teaching Fellows any more. It was for $6,500/year for four years (not a full ride) to be paid back by forgiveness of $6,500/year of teaching.

Were you a TF? (Just curious - I was.)

[Jean too]

No, I wasn't a TF my daughter was.

[DawnM]

I don't think NC offers the Teaching Fellows any more. It was for $6,500/year for four years (not a full ride) to be paid back by forgiveness of $6,500/year of teaching.

 

 

They should.  They are losing teachers at an astounding rate.  Many refer to it as the "war on teachers in NC."

[caedmyn]

The hospital here offers nurses loan repayment if you commit to working a certain number of years. I have seen it advertised at other hospitals also.

[TechWife]

There's a federal program that offers federal loan forgiveness (so not any private loans or parental loans) after 10 years of "serving the public" kind of careers, whether employed by the government or by a non-profit. (Technically, it's after making 120 loan payments.) It can be a religious employer, but your work has to be non-religious in nature. (If, say, half of your work is non-religious in nature, then you can count that half, and after twenty years you'd have hit 10 years of non-religious public service.). I don't know how it is working in practice, since people were only eligible for forgiveness in the past year (ten years after the program started). Here's a link: https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/public-service

 

FYI: I'm not sure this program will be around for the long haul.  The Dept. of Education is asserting now that it never made any commitments to pay out on this program. There is an ongoing lawsuit regarding whether or not lawyers in some sectors of public service will qualify. The position of the Department of Education is that they only made "interim, non-binding decisions." They state they aren't obligated to make final determination until ten years of loan payments have been made. While this statement was made in an argument re: the Bar Association lawsuit, which came about due to a rule change.  They could easily apply the same rationale to everyone. The program is just now coming up on the ten year mark this fall, when the first people should qualify. It is not part of the President's proposed 2018 budget. 

 

 

http://www.npr.org/sections/ed/2017/08/05/541179373/student-loan-forgiveness-for-public-servants-up-in-the-air

Edited September 1, 2017 by TechWife

[TechWife]

I don't think NC offers the Teaching Fellows any more. It was for $6,500/year for four years (not a full ride) to be paid back by forgiveness of $6,500/year of teaching.

 

You are correct. The final class graduated in 2015. 

[gardenmom5]

dsil was at boeing when he started his MBA - they were paying for his tuition in full.   he changed jobs not long after he started his mba, and had to pay boeing back.   his current employer (the increase in pay more than made up for not having his tuition paid for.)  gave him a huge bonus when he graduated with his mba - ostensibly to pay for a decent chunk of it.   he's talking of getting another degree - and they would pay for that. since he would be starting it while employed by them.

[SparklyUnicorn]

My husband worked for a company that paid tuition, fees, and books for a degree program, but they didn't offer repayment of outstanding loans.  He got his entire master's degree paid for.  That was nice!

[DawnM]

In tech, I've only seen tuition reimbursement.  And in that case, only for very specialized programs.  I have a double major and the last couple classes of my 2nd degree was paid. 

 

You and your parents may have thought it stunk not to benefit from that particular program that particular employer happened to provide.  But it is still a huge gift to be able to graduate college with little to no debt.  It gives you a lot more flexibility in terms of employment and life style in general not to be strapped to huge college debt payments.  I do think planning for programs like this would be really hard to do well in advance of college graduation.  It would apply to a very narrow set of degrees and a narrow set of employers. 

 

The other thing to consider is that students can only borrow $5500 per year right now for an undergrad degree in their own name.  Any other loans are in the parents name and become the parent's responsibility.  It seems unlikely to me that an employer would take on larger loans that parents chose to take out for their child's higher education.  When you fill out financial aid info, you will get a break down of student loans vs. parent responsibility vs. financial need vs. merit money, etc.  So research that bit carefully if you are looking at programs like this.   That said, I don't necessarily think it's bad for students to utilize some money via Perkins loan.   Even if you intend to help pay off later.  It can make a student more invested in their success and education and maybe think about maximizing summer earnings, etc. 

 

It was, and I agree, but I also feel bad that my parents had that happen.  They could have really benefited. 

[SparklyUnicorn]

If I recall correctly, you can get loans forgiven if you work as a teacher in some urban school districts for a period of time. 

 

 

[QueenCat]

dsil was at boeing when he started his MBA - they were paying for his tuition in full.   he changed jobs not long after he started his mba, and had to pay boeing back.   his current employer (the increase in pay more than made up for not having his tuition paid for.)  gave him a huge bonus when he graduated with his mba - ostensibly to pay for a decent chunk of it.   he's talking of getting another degree - and they would pay for that. since he would be starting it while employed by them.

 

Dh's company paid for his Masters. He was required to stay two years after graduation or pay it back if he left earlier.

[gardenmom5]

Dh's company paid for his Masters. He was required to stay two years after graduation or pay it back if he left earlier.

Same for dsil. He left while he was in scholl, so he paid it back. The increase in salary more than made up for them not paying for it. He didn't expect the current employer would pay anything. That they did was a nice surprise.