Understanding Tuition Remission: A Comprehensive Guide
Tuition remission is a valuable benefit offered by many educational institutions to their employees, their spouses, and dependents, allowing them to pursue education at a reduced cost or even for free. This article delves into the intricacies of tuition remission, exploring its definition, eligibility requirements, tax implications, and various scenarios in which it applies.
What is Tuition Remission?
Tuition remission is a type of employee benefit offered by colleges and universities that allows employees, their spouses, and/or their dependent children to take courses, often at the institution where the employee works, either for free or at a significantly reduced cost. It represents a waiver or reduction of tuition fees, making higher education more accessible to those affiliated with the institution.
Saint Vincent College offers employees and their dependents and spouses the opportunity to continue their education on a reduced cost basis. The Tuition Remission Program is only through Saint Vincent College.
Eligibility Criteria
Eligibility for tuition remission programs varies depending on the institution and the specific program. However, some common requirements include:
Employment Status: Typically, the employee must be a full-time employee to qualify for tuition remission benefits. Some institutions may also offer prorated benefits to part-time employees.
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Length of Service: Some colleges and universities require a waiting period, such as two years of full-time service, before an employee and their dependents or spouse become eligible for tuition remission. However, temporary waivers of such requirements may be granted under certain circumstances, such as the one implemented by Saint Vincent College beginning October 2021.
Dependent Status: For dependents to be eligible, they must meet the definition of a dependent under the Internal Revenue Code (IRC). According to the IRS, individuals are considered dependents until the age of 24. Saint Vincent College requires employees requesting tuition remission for dependents to supply HR with the prior year filed tax return and, for the graduate program, Employees must show the last tax return year that the dependent was claimed.
Academic Standing: Dependents and spouses may be required to meet Satisfactory Academic Progress requirements at the end of each spring term to remain eligible for tuition remission.
The College of St. Scholastica recognizes the significance of continuing education for the personal growth and professional development of its employees. As a benefit to its employees, the College offers tuition remission to eligible faculty and staff and to their eligible spouse and dependent children.
Scope of Coverage
Tuition remission programs can cover a variety of educational pursuits, including:
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Undergraduate Studies: Many programs offer full tuition remission for undergraduate study at the institution. At Saint Vincent College, an employee’s dependent and spouse is eligible for a full tuition remission for undergraduate study at Saint Vincent College after the employee has completed two years of full-time service with the College. Beginning October 2021, a temporary waiver exempting the two years of full-time service has been granted for dependents and spouses who qualify for tuition remission only.
Graduate Studies: Some institutions extend tuition remission benefits to graduate programs, either fully or at a discounted rate. At Saint Vincent College, an employee’s dependent and spouse is eligible for a full tuition remission for graduate study at Saint Vincent College after the employee has completed two years of full-time service with the College. Beginning October 2021, a temporary waiver exempting the two years of full-time service has been granted for dependents and spouses who qualify for tuition remission only. If a successful applicant to one of the Saint Vincent graduate programs is a dependent of a full-time employee, and where they have not previously received any tuition remission from Saint Vincent or any tuition exchange at another university, they will be entitled to 100% tuition remission of their graduate tuition for one graduate program. Dependents of full-time employees are eligible for this graduate tuition remission benefit immediately upon the hiring of the employee on a full-time basis. If the employee voluntarily leaves the employment of Saint Vincent within two years of their hire, the College reserves to charge back all or part of the tuition remitted for their dependent or spouse.
Specific Courses: Employees may enroll for up to two courses during each semester on a space available basis. These courses may be taken at the College or the Seminary, at the undergraduate or graduate level, and the employee need not be working toward a specific degree to be eligible. Classes must be taken during hours other than the normally scheduled hours of work.
At the College of St. Scholastica, employees may receive tuition remission for a maximum of 8 credits at any given time. An employee wishing to take more than eight credits at any given time may do so only with supervisory approval and will be required to pay for the additional courses entirely at their own expense. Spouses and dependent children receive tuition remission for up to 18 credits per semester. As a first consideration, employees are encouraged to enroll in evening courses (or courses during non-working hours). An employee who wishes to take a class during the workday must obtain approval from his/her supervisor. An employee may take only one course per enrollment period during his/her normal working hours. The employee must arrange to make up time lost from work due to course attendance. Employees and spouses may enroll in courses with available capacity after tuition-paying students have completed registration. Employees or spouses may not supplant a tuition-paying student. The employee, spouse, and/or dependent children must pay for course fees, health service fees, room, board, books, supplies, and other assessed charges. Prior learning assessment, portfolio, consortium credits, and CLEP fees are not covered by the tuition remission. This benefit applies to tuition for study abroad programs in which St. Scholastica faculty serve as course instructors or coordinators.
Tax Implications
Under section 117(d) of the Internal Revenue Code, educational institutions offering a full reduction of tuition charges to employees, their spouse and dependent children for undergraduate coursework may exclude the value of this education from their employee's taxable wages.
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Free or reduced tuition provided by eligible educational institutions to its employees may be excludable from gross income as a qualified tuition reduction. IRC Section and Treas. Generally, amounts paid by an employer to or for the benefit of employees are compensatory in nature, and includible in gross income as wages. Section 117(d)(2) defines a “qualified tuition reduction” as the amount of any reduction in tuition provided to any employee of a Section 170(b)(1)(A)(ii) educational organization for the education (below the graduate level) at such organization (or other organization described in Section 170(b)(1)(A)(ii)) of such employee or any person treated as an employee under the rules of Section 132(h). The exclusion from income provided by Section 117(d) is generally limited to education “below the graduate level.” Tuition reductions for graduate education are considered qualified and are excludable only if they are provided by an eligible educational institution to a graduate student performing teaching or research activities for the educational institution. The employee must include in income any other tuition reductions received for graduate education.
Tuition remission is generally a nontaxable benefit for employees, spouses or dependent children enrolled in undergraduate courses that qualify towards a first degree. Employees are subject to federal and state taxes for tuition remission benefits exceeding IRS limits. The value of the tuition remission benefit is subject to federal and state taxes to the employee for spouses seeking undergraduate study beyond their first baccalaureate degree and/or for children qualifying as dependents under FAFSA rules but not qualifying under IRS rules.
Specific Scenarios and Considerations
Dual Enrollment: If the class is taught at the high school (or in home) it is not eligible for tuition remission and would be subject to the appropriate per credit fee. If the course is taught at Saint Vincent by College faculty with an enrollment of primarily undergraduates, tuition remission would apply.
Study Abroad: Tuition remission is not available for those dependents or spouses enrolled at Saint Vincent College who are participating in study abroad unless tuition is being billed through Saint Vincent for the study aboard program. This benefit applies to tuition for study abroad programs in which St. Scholastica faculty serve as course instructors or coordinators.
Financial Aid: For students receiving financial aid the tuition remission will be reduced by ½ of the total value of Federal and State Programs. Any additional SVC departmental scholarships or endowed awards will reduce the remission amount dollar for dollar after $1000. Tuition remission and federal and state program funding shall be limited to the number of credits necessary to obtain a first Bachelor’s Degree. If the employee, spouse, or dependent child is eligible for other St. Scholastica financial aid, they must choose between the standard financial aid package and the tuition remission benefit. Tuition remission and all sources of grant and scholarship financial aid will not exceed 100% of tuition.
Post-Retirement Benefits: After ten years of full-time service, tuition remission benefits are extended to the dependents or spouse of a full-time employee who dies or becomes totally disabled during employment with Saint Vincent. After completing ten years of full-time continuous service, tuition remission benefits are available to the dependents of an employee who retires from Saint Vincent and does not seek employment elsewhere. A Staff Member in a Continuing Appointment remains eligible for the Tuition Remission Program during the term of the post-retirement contract.
Termination of Employment: If an employee is dismissed due to modifications in curriculum, cancellation of a program or some other nonprejudicial reason, the employee, spouse, and/or dependent children will receive full tuition remission through the end of the academic year providing class attendance had started at the time of termination. Employees with twelve or more years of service will continue to be eligible for tuition remission for themselves, their spouse, and their dependents as long as these individuals are enrolled on or before the date of termination. Their enrollment going forward must be continuous, and the benefit would be provided only until they have earned a degree. If the employee has a dependent who is in the twelfth grade on the date of termination, that dependent will also qualify for tuition remission under the same conditions. The spouse and dependent children of an employee who had at least three but less than ten years of service who have commenced enrollment at the College may receive tuition remission for the remainder of his/her undergraduate work, provided there is no interruption in attendance. The spouse and dependent children of an employee who had ten or more years of service may receive tuition remission for undergraduate work, regardless of his/her enrollment status at the time of the employee's death or long-term disability.
Tuition Remission for Graduate Students with Assistantships
Tuition Remission is a benefit to graduate students holding a Research Assistant, Teaching Assistant, or Program/Project Assistant appointment to help alleviate the cost of tuition. A new tuition remission framework starts fall 2025 (FY26). The details on what is changing are described on the FY26 Changes for Tuition Remission Eligibility for RA, TA, PA, and LSA page. If tuition remission is allowed on the project, the tuition remission should not be transferred separately. Stipend should be transferred first and tuition remission will follow. Stipend and tuition remission are all part of the student’s compensation package and should remain allocated and proportioned to amount of work that the student performed on the project(s).
The Office of Research and Sponsored Programs recommends that you include the full cost of the tuition remission surcharge on each proposal. The PI/Department will be responsible for identifying alternative sources, including re-budgeting, to cover the surcharge. If re-budgeting is not an option, the overage should be transferred to non-restricted funding. If a project is overspent and tuition remission is allowable and allocable on the award, other expenses should be used. The TR surcharge will not be assessed on the January A pay period. Fall will run from September A pay period - December B, and spring will run from January B through May B. Funding changes and salary transfers will be picked up by Business Services monthly. For budgeting purposes only, include a 3% annual increase in tuition costs starting with FY27. The surcharge policy only affects graduate assistants with RA and PA appointments. The maximum allowable amount should not exceed the zero level of the Ruth L. Kirschstein National Research Service award stipend level in effect at the time of the competing award.
Application Process
All Employees that request for tuition remission for themselves or for their dependents or spouse, must complete a tuition remission form each academic year. The employee must apply for the tuition remission benefit each semester for themselves, their spouse, and/or dependent children. The application must be completed upon receipt of the first electronic Schedule/Bill and prior to the third week of each term. Undergraduate degree-seeking employees, spouses, and dependent children caking six or more credits per semester must complete the Free Application for Federal Student Aid (FAFSA) and accept all available need-based grants and scholarships from government sources. Required financial aid forms and documents must be completed within the term of enrollment.
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