Tuition reimbursement is one of the most important and generous benefits a company can offer. College tuition reimbursement is a contractual arrangement between employer and employee that outlines specific terms under which the employer may pay for the employee's continuing education. Today, tuition reimbursement benefits are often also called tuition assistance, and vary greatly from company to company.

It is important to understand that it generally takes a solid, well-established company to be able to offer what could amount to $10,000 per semester or more for eligible employees. So job hunters/college students should not look for too many startups to include tuition assistance as a regular part of their compensation package. However you should also understand that just because a company says it believes in personal development, you should not assume it offers tuition reimbursement. If this benefit is important to you, (perhaps because you want to complete a bachelor's degree or earn an advanced degree), it makes sense to clarify the scope of your intentions along with the company's capabilities up front.

Employees who want to attend college as well should understand that most companies that offer college tuition reimbursement base the amount on the employee's grade in the course or courses. Many companies won't pay if the employee earns a grade below a B. In addition, you should also understand that while some companies pay for the course at registration, others will only reimburse the cost after successful completion of the coursework. When investigating a tuition reimbursement program, you should be sure to ask about timing of reimbursement, since that could make a difference in how many classes you take at one time.

Tuition reimbursement used to be treated as taxable income to the employee but that has now changed. In 1996, Congress approved some sweeping changes that resulted in lower taxes for a number of sectors, and "employee scholars" were among the lucky ones. The tax-free status is good for up to $5,250 of annual employer-provided assistance benefits through the year 2010. Starting in 2002, it will apply to both the undergraduate and graduate levels.

Apart from using continuing education as a hiring incentive, companies are also convinced that they need it to stay up to speed in the Information Age. Remember that your odds are better at larger companies. Four in five companies say they offer the benefit, according to a national member-company survey for 2000 by the Society for Human Resource Management. But keep in mind that those are businesses big enough to have some human-relations staff. Only one in three small companies offers tuition reimbursement, says the U.S. Labor Dept.

You may be wondering if there is a list of companies that provide tuition assistance. The simple answer is no. While there does not seem to be a list you can find out, though, about companies that offer this benefit. Tuition reimbursement is such a popular recruiting tool that companies are likely to bring it up even before you do. If not, it is alright these days to ask. Remember that the amount of the benefit will vary as widely as the companies who offer tuition assistance.

A final note-When asking about the benefit, be sure that you pay attention to the fine print because generalities can be misleading. For example: Surveys show that high-tech outfits are among the least likely to give tuition reimbursement, but they do as much on-site education for their employees(workshops and seminars) as bigger more established companies do. Determine what you need from your college education and then find an employer who can help you fulfill your dream and save big at the same time.