Educational Benefit Policy
Unit: Human Resources
Contact: Susan Norton
Title: Senior Associate Vice President for Human Resources & Chief Human Resources Officer
Effective Date: 1/1/2012
Revision Date: 08/01/2021
Purpose
The purpose of this policy is to provide information about and establish guidelines to administer the University’s educational benefit policy. The University of Alabama offers an educational benefit to eligible employees and their eligible spouse and/or child(ren) who are enrolled at the University. In accordance with standard academic rules, admission to the University must first be obtained in order to receive educational benefits.This educational benefit applies only to enrollment at The University of Alabama. The University does not have a reciprocity agreement with The University of Alabama at Birmingham or The University of Alabama in Huntsville, nor any other higher education institution. The educational benefit does not apply to courses, such as study abroad courses, where tuition is due and payable to other higher education institutions or third-party affiliates (e.g., the educational benefit is only available for UA faculty-led or UA exchange programs where tuition is due and payable to UA; it is not applicable to affiliate, direct enroll, or non-UA affiliate programs wherein tuition is paid to a third-party provider or host university).
The benefit calculation is based on the classification of the enrolled student (e.g., undergraduate or graduate), credit hours per semester, and a percentage of the tuition costs. This calculation does not include the cost of books or fees, including but not limited to course fees, college fees or charges associated with the auditing of a course.
Policy
Eligibility for Educational Benefits
Upon employment, all regular (not temporary) full-time and part-time employees are eligible to receive the educational benefit if enrolled as a student at The University of Alabama.Spouses and unmarried children up to the age of 26 are eligible to receive the educational benefit after the employee has completed six continuous months of employment in an eligible employee class. For the benefit to apply, the continuous six-month employment period must be satisfied prior to the start of each semester. Only one educational benefit per student will be awarded even if there is more than one eligible employee in their family unit.
University retirees with at least 10 years of UA service, as well as their spouses and children, will maintain eligibility for this benefit as long as
In the event of an eligible employee's or retiree's death, dependents who are actively enrolled in courses as a degree-seeking student at the time of death will continue to receive the educational benefit until said dependent attains the degree for the program in which they are enrolled at the time of death.
The educational benefit for spouses and dependents is not chargeable to Federal grants and must be provided from other University sources. Costs associated with non-credit courses, trainings, certificate programs, etc. are not eligible for an educational benefit.
Educational Benefit for Eligible Employees
Regular Full-Time Employees
The educational benefit provides eligible, regular full-time employees an amount to assist with educational costs equal to 100% of the tuition costs for up to three (3) credit hours during the fall semester, three (3) credit hours during the spring semester, and up to six (6) credit hours during the summer semesters ("3/3/6 Rule") at the undergraduate or graduate campus resident student tuition rate. All other hours taken will result in assistance at an amount equal to 50% of the tuition costs at the undergraduate or graduate campus resident student tuition rate. The applicable rate is based on the classification of the enrolled student (e.g., undergraduate or graduate). Higher tuition rates for enrollment in specialized graduate programs, including but not limited to law school, medical school, or executive doctoral programs, do not entitle employees to amounts above the graduate campus resident student tuition rate. The educational benefit for students enrolled in distance learning courses or courses offered at the UA Gadsden Center will be applied at the lower tuition rates for these programs as specified by The University of Alabama Online.Regular Part-time Employees
The educational benefit provides eligible, regular part-time employees a prorated amount to assist with educational costs based on their full-time equivalency (FTE). For example, an eligible, regular part-time employee of .50 FTE would be eligible for an amount equal to 50% of the tuition costs for up to three (3) credit hours in the fall semester, three (3) credit hours in the spring semester, and up to six (6) credit hours in the summer semesters ("3/3/6 Rule") at the undergraduate or graduate campus resident student tuition rate.All other hours taken will result in assistance at an amount equal to 25% of the tuition costs at the undergraduate or graduate campus resident student tuition rate. The applicable rate is based on the classification of the enrolled student (e.g., undergraduate or graduate). Higher tuition rates for enrollment in specialized graduate programs, including but not limited to law school, medical school, or executive doctoral programs, do not entitle employees to amounts above the graduate campus resident student tuition rate. The educational benefit for students enrolled in distance learning courses or courses offered at the UA Gadsden Center will be applied at the lower tuition rates for these programs as specified by The University of Alabama Online.
Spouse and Child(ren) of Eligible Employee
After eligible employees have been employed six continuous months, the employee's spouse and/or children may receive an amount to assist with educational costs up to the maximum of 50% of the tuition costs at the undergraduate or graduate campus resident student tuition rate for eligible courses. The maximum assistance amount will not exceed 50% of the full-time tuition rates. The applicable rate is based on the classification of the enrolled student (e.g., undergraduate or graduate). This benefit is also applicable to the UA Early College program for high school students of eligible employees. Higher tuition rates for enrollment in specialized graduate programs, including but not limited to law school, medical school, or executive doctoral programs, do not entitle employees to amounts above the graduate campus resident student tuition rate. If the sponsoring faculty or staff is a regular part-time employee, this benefit is prorated based on the employee's FTE. The educational benefit for students enrolled in distance learning courses or courses offered at the UA Gadsden Center will be applied at the lower tuition rates for these programs as specified by The University of Alabama Online.Spousal/Child(ren) Verification
Documentation to substantiate whether an individual is a spouse and/or child of the employee is required. Such documentation includes tax returns, birth certificates, marriage certificates, etc. For the purposes of this policy, a child includes an unmarried, dependent child up to the age of 26 that is the employee's biological child, stepchild, legally adopted child, or child for whom the employee has a final custody order. If it is determined that the information provided has been intentionally falsified, the employee may forfeit the educational benefit and will be responsible for reimbursing the University for any amount paid in benefits. In addition, such falsification may result in a violation of state ethics laws. When there is any change in eligibility or tax status, the employee should notify the UA HR Service Center immediately at (205) 348-7732 or hrsvctr@ua.edu.Full-Time and Part-Time Employment Status/Termination
The employee must be in an eligible employment status through the first day of classes for the dependent to receive an educational benefit for the fall semester, spring semester or summer terms (to be eligible for summer, the employee must be in an eligible status through the first day of the summer interim term). If it is later determined that the employee was not eligible, the educational benefit will be recalled, and the appropriate charges will be billed to the student's account. Employees are responsible for notifying the HR Service Center of any information that would affect eligibility for the educational benefit by contacting (205) 348-7732 or hrsvctr@ua.edu.If the employee terminates employment with the University or an eligible dependent becomes ineligible during the course of the semester, the educational benefit will remain in effect for the remainder of that semester only. Dependent children must be unmarried and under the age of 26 on the first day of classes.
Only one educational benefit per student will be awarded even if there is more than one eligible employee in their family unit.
Class Attendance for Credit Courses during Working Hours
In order for an employee to attend a class during working hours, prior approval by the appropriate administrative official must be given. Such approval is limited to three work hours per week and will only be given in the event the time off does not interfere with the daily operation of the work unit. Time off to attend a class during working hours may be approved by using the employee's accrued compensatory time or annual leave or the time off may be made up (subject to the departmental administration's discretion).Release Time for Non-Credit Courses/Programs
The Department of Human Resources offers specific training that affords opportunities for career development of employees. This training is normally conducted during regular working hours. If the supervisor approves attendance, employees are not required to take leave or make up the time. Costs associated with non-credit courses, training, certificate programs, etc. are not eligible for an educational benefit.Submitting an Application
Eligible employees who wish to apply for an educational benefit for themselves and/or for their eligible dependent(s) should submit an educational benefit application subject to the deadlines and terms found in the Educational Benefit Procedures.
Taxation of Benefits
Educational benefits received by University employees and/or dependents may be taxable to the employee. As the employer, the University must comply with taxation requirements set forth in the Internal Revenue Code (IRC), Treasury Regulations and other guidance published by the Internal Revenue Service (IRS).When Fringe Benefits Are Considered Paid and Subject to Tax Withholding
The benefit may be considered paid on one or more dates throughout the calendar year, even if the entire benefit is acquired at one time. The taxes will be reported for the same tax period in which the benefit is considered paid. See IRC Section 3501, Treas. Reg. Section 31.3501(a)-1T, and ANN 85-113, 1985-31 IRB 31.For those educational benefits which are taxable, Federal, State, and Social Security taxes will be withheld from the employee's paychecks at the end of each semester in which the educational benefit was received. Taxes will be withheld over four pay periods for bi-weekly paid employees and over two pay periods for monthly-paid employees. Employees will be notified of the pay periods that include these tax withholdings in advance.
Refer to the University Tax Office website for details regarding the potential taxability of educational benefits.