Why Employers Should Consider Colonial Life’s College Tuition Rewards Program
One of the largest concerns for people and their families is how to pay for college. Four-year tuition and fees at private and public institutions have skyrocketed in the past decade and families and students in every state are finding it harder to afford tuition.
Paying for college has become a financial stress for families all across America and its lack of affordability pushes people deeper into debt to cover the bill. Rising prices are leading many to wonder if attaining a higher education degree is worth the cost.
Did you know there’s already a tool specifically designed to help to make college more affordable? It’s called the College Tuition Rewards Program and it’s a type of voluntary benefit offering that employers can use to help lower the financial burden of higher education for employees.
This benefit makes it possible for employers to provide their employees’ children, grandchildren, nieces and nephews with guaranteed scholarships.
About this College Tuition Rewards Program
The College Tuition Rewards Program is a type of college savings and investment plan where employees of partnering companies can earn guaranteed college scholarships for use at over 365 private colleges and universities across the United States. The network of institutions participating is called the Sage Scholars Network of colleges and includes approximately 35% of the nation’s private colleges. 60% of participating colleges are ranked by U.S. News & World Report as “America’s Best Colleges”.
Based in Columbia, South Carolina, Colonial Life and Accident Insurance Company offers disability, accident, life, cancer, critical illness and hospital confinement insurance plans in 49 states. Through Colonial Life plans, employers are able to offer their employees many types of supplemental health benefits for life insurance, accident insurance, disability insurance and more.
When an employer utilizes Colonial Life for their voluntary benefit offerings, they will offer scholarship monies equal to 5% of the employee’s 401K / 403 B balance. This can be done without disrupting the current 401K plan. Company executives and 401(k) brokers like it because it provides an opportunity for high wage earners to earn college tuition credits they can either use for their own children or gift to grandchildren, nieces or nephews. It also allows executives to invest more if their 401(k) program is not a safe harbor.
It’s similar to accruing tuition points for frequent fly miles. Each point is equal to $1 in scholarships at an in-program college or university and can later be redeemed for guaranteed discounts on college tuition. Each year, the scholarship grows by an amount equal to 5% of the employee’s 401(k)/403(b) balance. Participation helps employers to do good by encouraging employees save. It also helps to establish themselves as an employer of choice and, in some cases, can improve attraction and retention of talent.
Each tuition reward is a guaranteed $1 reduction in tuition at any participating institution, and there is no limit on how many tuition rewards an employee can accrue.
Any company with a retirement plan and 25 employees can participate in this College Tuition Rewards Program. Each year, the 401(k) balances are submitted to the program and each employee receives a statement indicating the tuition reward equal to 5% of their 401K balance. Just for enrolling, each employee receives $500 in Sage scholarship tuition awards. Married employees are eligible for $1,000.
- To be eligible for this program the employer must offer voluntary benefits through Colonial Life. There’s also an opportunity to provide similar benefits if an employer utilizes Guardian for their dental program.
- Employees must register the beneficiary prior to the end of their sophomore year in high school. This gives the participating colleges the opportunity to market themselves to the student prior to the typical student’s enrollment for the SAT.
- The maximum gift per student is no more than one year’s tuition and gifts must be related to the participant.
- The employee does not need to purchase the voluntary insurance to be eligible.
- The scholarship credits never expire – even if Colonial Life cancels the program and/or the employee leaves the company.
Employer Webinar on Tuesday December 6 Beginning at Noon
Join the KMRD team in a detailed discussion about how Colonial Life’s College Tuition Rewards Program can work with your business to improve recruitment, retention and morale and help your employees save for their children’s college tuition. Please sign up below.
Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from a KMRD risk professional before taking any action.