Does your job pay for college? Check your employer’s plan

$5,250 a year, tax-free

That is the most an employer can pay toward your education each year without it counting as income, under Section 127 of the tax code (IRS Publication 5993). It covers tuition, fees, books and supplies, and since the July 2025 tax law it can cover student loan payments too. All of it shares one yearly limit.

According to SHRM, 48% of U.S. employers offer some form of tuition assistance. The checker above shows what 21 large employers publish about their plans, and what to ask if yours isn’t listed.

Three ways employer plans pay

Plans that look alike on a careers page can work very differently once you enroll.

1. Prepaid at network schools. The employer pays the school directly, but only schools in its own network. Amazon’s Career Choice prepays up to $5,250 a year this way. Starbucks pays 100% of tuition up front for an online bachelor’s degree at Arizona State University.
2. Reimbursed after you pass. You pay the school first and the employer pays you back once you finish the class, often with a minimum grade. T-Mobile, for example, pays for job-related courses passed with a C- or better.
3. Both. A short list of programs is paid in full, and other programs get a yearly amount. Chipotle, CVS Health and JPMorgan Chase run plans like this.

Which kind you have decides your cash flow. A prepaid plan means you never front the money. A reimbursement plan means you cover each term until the check arrives.

What to ask before you enroll

The checker writes a note to HR built from your answers. These are the questions in it, and why each one matters.

• Do I qualify, and which schools can I use? Waiting periods and hours rules vary. McDonald’s Archways, for example, starts after 90 days for crew averaging 15 hours a week.
• Do I need approval first? Some plans won’t pay for a class you started before HR signed off.
• Is it prepaid or reimbursed? This sets how much cash you need each term.
• What is my yearly maximum? Plans can set their own limit below $5,250, and some add a lifetime cap. UPS Earn and Learn stops at $25,000 in total.
• Would I repay anything if I left? Some employers ask for money back if you leave within a set time. Get that rule in writing before a multi-term program.

Above $5,250, the rest is usually taxed

Bank of America publishes a limit of $7,500 a year, above $5,250. Only the first $5,250 of any year is tax-free under Section 127. The rest is usually taxed as wages, unless the classes are job-related training for the work you do now. Our guide to the $5,250 employer tuition rule explains when that exception applies.

Employer money and Pell Grants are separate

A Pell Grant is federal money for undergraduates without a bachelor’s degree, up to $7,395 for 2026-27 (Federal Student Aid). You don’t repay it. Your school counts both your employer’s payments and your federal aid toward your cost of attendance, so ask its aid office how it handles employer money.

Some employer plans build grants in. Walmart’s Live Better U applies federal and state grant aid first and covers the rest, and McDonald’s Archways pays only course costs that scholarships and grants don’t cover. At either, filing the FAFSA is part of enrolling.

How we check employer plans

Every plan in the checker links to the employer’s own page or official program site, and the tool shows that source and the day we read it next to the result. We last read every page on October 4, 2026, and list a dollar figure only when that page states it. Where the newest page we could find is a few years old, the checker says so. Home Depot and Comcast were removed in October 2026 because their amounts appear only on third-party sites.

We are not affiliated with these employers. The optional school-matching form at the end of the checker belongs to our partner, not to any employer, and isn’t your employer’s school list. Plans change, so confirm the details with HR before you enroll.