Why Your Tuition Reimbursement Benefit Isn’t Being Utilized (and How to Fix It)

Tuition reimbursement programs (TRPs) remain one of the most underutilized employee benefits. A 2024 SHRM study found that while 92% of employers offer some form of tuition assistance, less than 10% of eligible employees use it each year. For HR and benefits leaders, this represents a critical missed opportunity to drive engagement, retention, and internal mobility.

Despite offering thousands of dollars in educational support, participation rates remain stagnant. Why? The root causes can be traced to three interlocking barriers: budget fears, limited promotion, and poor targeting.

Key Takeaways

• Fewer than 10% of employees use tuition reimbursement benefits each year.
• Main barriers: budget fears, low visibility, and poor targeting.
• Fix it with pre-pay options, year-round communication, and career-aligned programs.
• Companies that personalize and promote tuition reimbursement see 2x higher participation and stronger retention.
• Treat tuition reimbursement as a strategic talent investment, not just a perk.

1. Budget Fears: When “Free” Education Feels Risky

Many employees hesitate to use tuition reimbursement because they view it as a financial gamble. Even if an employer offers $5,000 per year in reimbursement, most employees must pay tuition upfront. According to a 2023 Bright Horizons report, 68% of employees say they can’t afford the out-of-pocket costs required to start a course before reimbursement.

Additionally, opaque reimbursement timelines and complex paperwork often deter participation. Employees—particularly those already managing student loan debt—fear being left waiting months for repayment.

How to Fix It:

• Offer pre-pay options or direct billing: Partner with academic institutions that allow the employer to pay upfront, removing employee cash-flow concerns.
• Clarify reimbursement policies: Use plain-language visuals that show timelines, approval steps, and payment details.
• Integrate financial counseling: Pair tuition assistance with employee financial wellness programs to build confidence in using the benefit.

2. Limited Promotion: “If You Build It,” They Still Might Not Come

Many companies launch their tuition reimbursement benefit with excitement—then barely mention it again. As a result, employees simply forget it exists.

A Guild Education benchmark analysis found that benefit utilization can jump 4x when companies communicate educational programs consistently throughout the year. Yet most HR teams mention tuition reimbursement only during onboarding or annual open enrollment.

How to Fix It:

• Adopt a year-round communications cadence: Send quarterly spotlights featuring employees who completed degrees or certifications using the benefit.
• Use behavioral targeting: Segment communications based on employee data—tenure, department, and career goals—to send personalized nudges.
• Promote milestones, not just policy: Highlight how the program leads to internal promotions, career transitions, and skill upgrades.

3. Poor Targeting: The One-Size-Fits-All Approach

When tuition reimbursement is framed as a blanket perk, it risks missing the employees who would value it most. For example, frontline staff or mid-career professionals may want short-term upskilling certificates—not full degrees.

LinkedIn Learning’s 2024 Workforce Report revealed that employees are 46% more likely to engage when educational benefits are tied directly to their current job or career trajectory.

How to Fix It:

• Segment by career stage: Offer degree programs for early-career employees, micro-credentials for mid-career staff, and leadership certifications for senior contributors.
• Leverage internal data: Use HR analytics to identify skill gaps and align tuition support with workforce planning.
• Connect learning to advancement: Create “education-to-promotion” pathways where completing a course qualifies employees for new roles.

The Data-Driven Communication Strategy That Works

A truly effective tuition reimbursement program doesn’t rely on a single announcement—it’s powered by data-driven storytelling and employee insights.

Consider this multi-channel approach:

• Email analytics: Track open and click-through rates on benefit communications to understand which messages resonate.
• Survey feedback loops: Ask employees what prevents them from using the benefit, then address those barriers in future campaigns.
• HRIS integration: Use workforce data to automatically prompt eligible employees—such as those with tenure milestones—to explore the benefit.

Companies that combine these tactics with internal storytelling typically see participation double within 12 months.

Success Stories: Real Companies, Real Results

1. AdventHealth — This nonprofit hospital system revamped its tuition reimbursement benefit into a career pathway strategy. By partnering with nursing schools and offering upfront payment options, AdventHealth saw a 35% increase in program participation and a measurable reduction in nurse turnover within two years.

2. Southern New Hampshire University (SNHU) — While best known as an educator, SNHU also serves as a model employer. By linking its tuition reimbursement to internal upskilling and degree completion goals, the university achieved an employee retention rate 20% higher among participants compared to non-participants.

3. Bon Secours Mercy Health — The healthcare organization tied its tuition reimbursement to nursing certifications and continuing education, leading to a 25% reduction in turnover among eligible employees.

Each of these organizations reframed tuition reimbursement not as a line item expense but as a strategic lever for retention, advancement, and equity—proof that when educational benefits align with workforce mission, everyone wins.

The Strategic Imperative: Align TRS With Workforce Goals

For HR and C-suite leaders, tuition reimbursement is no longer a “nice-to-have.” It has become a cornerstone of talent strategy—driving retention, workforce development, and internal mobility. Yet without data-driven communication and targeted messaging, even the most generous program can fail to reach its potential.

The key is to make your program visible, accessible, and relevant to your employees’ goals. By removing financial barriers, promoting real success stories, and aligning educational opportunities with career advancement, you can transform tuition reimbursement from an underused benefit into a measurable competitive advantage.

If your team is still managing TRS manually, read Part 1: When It’s Time to Scale Your Program.

As participation increases, new legislation could impact how your tuition reimbursement program operates. Learn what the One Big Beautiful Bill means for your strategy in Part 3: How the One Big Beautiful Bill Will Reshape Tuition Reimbursement.