Benefits Strategy

Ultimate Guide to Education Stipends & 7 Reasons to Offer Employees an Education Stipend

Written by Kate

Does your company have trouble retaining the best employees despite offering great benefits, and fringe benefits? Are you looking for strategies to develop employee professional growth? How do you help your employees achieve their lifelong career goals? 

Human Resource managers worldwide are waking up to a new workplace reality. Gone are the days of the traditional bonus cheques as a primary incentive. Today’s workforce is more willing to align their career choices with companies investing in programs allowing them to learn and grow. 

Employers now realize that providing education stipends increases employee job satisfaction and productivity, which is good news. And as your company begins offering education stipends as part of its overall types of benefits offered, you will see almost immediate results like higher employee retention, improved employee work-life balance, and more legacy workers stepping up to fill skill gaps and hard-to-fill positions.  

This article will provide a background on education stipends (which are usually part of a broader employee stipend policy), the various data on their effectiveness, and explain the best strategies for developing an education stipend benefits policy for your company. 

Read on to learn more about this topic! Click on the sections below to jump right to your specific question.

What is an Education Stipend?

In layperson’s terms, an education stipend is a cash allowance companies offer employees for learning and professional development. Employees can spend their education stipend – a non-taxable benefit – on acquiring knowledge or skills that boost career growth or perhaps pursue a passion. These vary by company and may include:

  • Online or In-person classes. 
  • Books. 
  • Newsletter or industry magazine subscriptions. 
  • Online or one-on-one coaching/mentorship/wellness programs. 
  • Conferences. 

Education stipends can be monthly, quarterly, bi-annual, or yearly depending on the company’s budget. It is typical for organizations to cap the monetary value for each individual to save costs. And some companies may provide employees with specific items like books or pay for online courses every few months in lieu of a cash allowance. 

Why offer Education Stipends?

A common thread from HR teams across different industries is the difficulty in attracting and retaining workers. And the 20% of employees who quit their jobs citing a lack of professional development programs is the most compelling reason companies should offer workplace learning initiatives, aka education stipends. A LinkedIn Learning article says 94% of employees would stick around if companies invested in their careers, and 68% of employees would prefer learning on company time. 

Any self-respecting HR manager knows Millennials are a hard nut to crack because of their distinctive job expectations. A Gallup Workplace report reveals 59% of Millennials consider learning and growth and growth opportunities extremely important when applying for jobs, compared to 44% of Gen Xers and 41% of baby boomers. And they view professional development as a critical factor in remaining with an employer. 

This data is significant because, by 2025, Millennials will constitute the majority of the global workforce. Your company can get ahead of the curve and benefit from implementing an educational stipend initiative as the default employee training and learning solution instead of a traditional learning program. The benefits of creating a continuous learning program that pays workers to chase personal learning objectives are enormous, as we shall read below. 

Apple’s Education Reimbursement program is an excellent example that offers employees up to $5,250 annually for education expenses. The program is touted as one of the main secrets behind the company’s remarkable 28% employee retention rate.  Under the program, Apple employees can take personal finance, business, and software skills courses at Apple University. Employees can also attend seminars on diverse topics and learn about Apple’s company structure, including how to develop problem-solving skills like Steve Jobs. 

Other benefits of offering employees an education stipend include: 

  • An education stipend gives employees more flexibility in choosing what to learn. It allows for more personalization and lets them learn at their own pace.
  • Allowing employees to utilize their education stipend at their discretion offers more engagement, ultimately resulting in more learning and growth. It ensures that the funds are used for their intended purpose.
  • An employee-centric education stipend program results in a more fulfilled workforce and builds trust between the management and rank. 

How effective are Education Stipends?

Unique learning based company perks like education benefits are investments that pay the best interest of employers and employees. Data from HR teams, learning and development managers, and third-party research reveals that most employees favor continuous learning and personal development programs paid for by benefits like an education stipend. 

There is little doubt that education stipends encourage workers to stick around. Wyzant cofounder Andrew Geant admits that providing education stipends effectively attracts new employees and retains older workers at his company. 

What you should reimburse for with education stipends?

Your learning development program should offer employees access to the best online learning platforms. And you don’t need a huge budget to provide employees with access to these platforms. Buffer, a social management software startup in California, provides a $20 monthly education stipend per employee

Since Buffer introduced the initiative in 2017, it has been interesting to see how its employees (Bufferoos) are spending their learning stipends. 

Data Source: Buffer

You can see the data on the different learning methods and platforms Bufferoos uses. 

Data Source: Buffer

Read our guide for an extensive review of what employees can spend their education stipends on. 

  1. Online courses and classes.

Employees can register on online learning platforms for courses on diverse topics. These range from video tutorials to certificate or degree programs. Below is a list of the most popular online learning platforms. 

  • Udemy – Online courses at Udemy include over a hundred and thirty thousand video courses that cost between $20 and $200. Employees can learn digital marketing courses, register for the Python or web development boot camp program, or become proficient in MS Excel. 
  • Coursera – The curated platform is a great way for employees to acquire certificates and part-time degrees in business, science, math, arts, and engineering without leaving their current roles. Classes at Coursera are between $29 to $100. However, a Coursera Plus subscription costs $399 per annum, and you will pay between $15,000-$45,000 for one of the prestigious degrees from the learning platform.
  • Edx – Edx is a massive open online course (MOOC) learning platform created by Harvard University and Massachusetts Institute of Technology (MIT). It provides high-quality university-level programs and interactive courses taught by experts within the industry. Fees for individual courses range between $50 to $300. 
  • Masterclass – Lifelong learners will gravitate towards this excellent learning platform with classes taught by super achievers like Bog Iger and Serena Williams. Annual subscription costs for access to over a hundred classes is $180. 
  • Datacamp – You can learn technical skills at your pace from your office or home on this fantastic video tutorial platform. Datacamp offers classes on data engineering, machine learning, Python, and others. Monthly membership cost between $12 to $25. 
  1. Memberships

Registering for club and association memberships is an excellent way of spending education stipends. Employees can build their networking skills and mingle with Industry professionals. Several platforms are a great source for building professional networks and discovering organizations offering networking services.

  • Toastmasters – Employees looking to hone their public speaking skills can buy a bi-annual membership in Toastmasters for $45. And believe me, it is worth the money. You benefit from endless opportunities to meet new people and make new friends. 
  • Jobstars – Jobstars is a great source for finding networking organizations where you meet new clients, make new friendships, and attend career-changing events. Jobstars also offers resume writing services and career coaching. 
  • Linkedin Premium – LinkedIn offers unlimited access to endless networking and career development opportunities for those who don’t know. Employees also get Linkedin Learning which is a vast library of online courses. 
  1. Books and audiobooks

Spending an education stipend on books and audiobooks on professional development is a great idea. There is no shortage of brick-and-mortar and online bookstores with great titles. Access to E-book services like Amazon Audible, with over two hundred titles, can be yours for as little as $14.956 per month. 

  1. Mentorship classes and career coaching.

Employees can use education stipends to access coaching and mentorship programs. These resources remain among the most popular perks among employees who realize that hiring a career coach or having a professional mentor is a proven means of climbing the career ladder. 

  1. Magazine & newsletter subscriptions.

Industry magazines, news, and newsletter subscriptions are great information platforms and resource tools. Spending education stipends on such items offer employees leverage on information concerning the latest breakthroughs, trends, and developments in their field. 

  1. Virtual and In-person conferences.

Many employees spend a portion of their education stipend on conferences and seminars because they desire to build their hard and soft skills. No matter your field, industry-specific conferences are designed to enhance employees’ professional development and build strong networks within their industry. 

  1. Learning foreign languages

Your employees may spend their education stipend on learning new languages. Several home language learning services are committed to providing high-quality tutoring and materials for individuals. 

  • Rosetta Stone – offers resources enabling you to quickly pick and communicate in a second language for a monthly fee starting from $7.99.
  • Babbel – is a language learning resource that combines proven cognitive techniques with advanced technology. Prices start from $6.95 per month. 
  1. College tuition reimbursement

Education stipends can be spent on tuition reimbursement for an employee’s college education. Companies like Amazon offer full tuition for its front-line employees, but the program is subject to certain conditions. 

How other companies have used Education Stipends?

If we have convinced you of the importance of offering education benefits, but you think maybe it isn’t something you should implement just yet. We have a list of seven companies already offering fantastic education stipends and tuition reimbursement programs for employee professional development. 

You can click on the company’s name if you want more information about their programs. 

  1. Amazon.

Amazon has one of the most ambitious learning development initiatives for its employees. Under the Amazon Career Choice Program, employees receive up to 95% reimbursement for tuition and expenses on certificate and diploma programs in transportation, healthcare, IT, and mechanical trades. 

  1. Indico.

Indico offers its employees a $5,000 annual education stipend for career-related learning programs, including conferences and conventions. 

  1. Slack.

Slack employees are eligible for a $500 annual education stipend to spend on personal development programs and $2,000 in annual learning benefits for professional learning and development. 

  1. Balsamiq.

Balsamiq offers employees $3,000 in learning stipends for personal or professional development. 

  1. Disney

Disney’s full-time and part-time employees who attend the Disney Aspire school network for undergraduate and graduate programs get 100% of their tuition paid by the company. 

  1. Help Scout.

Help Scout’s Learn Something Stipend initiative provides a $1,800 annual education stipend per employee. 

  1. Chipotle.

Chipotle learning plan covers 100% of tuition for specific diplomas, college preparation courses, and degree programs. Employees wishing to take additional courses or programs are eligible for an extra $5,250 annual payment. 

What are the best practices for setting up education stipends?

Now you are ready to take the final step of setting up an education stipend benefits program. But how do you create a learning benefit initiative that will generate employee enthusiasm? You may also want to consider if it makes sense to offer a more robust lifestyle spending account or lifestyle benefits (some employers offer innovative benefits such as day care benefits for employees through a lifestyle spending account as well).

We have a few ideas on the best practices for building a fantastic learning stipend program that your organization and employees can benefit from. 

  1. Determine what skills you need to fill, including areas that need improving employee productivity, and tailor your learning stipends initiative to cover these gaps. 
  2. Customize your education stipend program to your employee’s needs. Receive feedback on how they choose which courses to learn and the skills most relevant to their roles. It is crucial to build a learning program encouraging employees to develop new skills that provide a new career path within the company, making them more valuable. 
  3. Ensure to communicate the details of your education stipend program and how employees can fully benefit from the initiative. Encourage employees to ask questions and clarify all issues. Simplify the process by removing any bureaucratic roadblocks preventing them from taking advantage of the initiative.
  4. Formalize your education stipend program by including it in your employee perks list. Outline the new benefit details to prevent confusion among employees about its use, how much they can access, and how to redeem the perk. 
  5. Feature your education stipend program in job postings and create a buzz among candidates about your employer-subsidized professional development program. 
  6. Embrace a continuous development culture as a critical part of your company’s corporate culture. Providing education stipends for employees should be more than taking a few classes. Encourage an environment that promotes continous learning and professional development to expand employee skills and increase productivity. 
  7. Let your employees learn at their pace to take full advantage of the education stipend program. Let them understand that it is an opportunity, not a corporate obligation. 
  8. Create a monitoring and evaluation strategy to determine if your objectives for setting up a learning initiative are successful. Also, set up a feedback program for evaluating data on usage and communicate the result to the managers and team leaders. 

7 Reasons to offer employees an education stipend

By now, you must have understood the significance between education stipends and employee performance. We have shown you how employer-funded professional development leads to employee job satisfaction. 

The reasons outlined below prove the benefits of offering your employees an education stipend. 

  1. Offering education stipends promotes a sense of pride and ‘self-worth’ among employees resulting in higher productivity and engagement levels. 
  2. Education stipends that pay for personal or professional development programs create well-informed employees with balanced viewpoints and broad interests. 
  3. Adopting an education stipend as an employee perk increases job satisfaction and promotes personal happiness. These are great recipes for high job retention and a loyal, self-motivating workforce committed to company growth. 
  4. Your company’s ability to attract and retain top talent increases, especially millennials who value career growth and development opportunities in job openings.
  5. Your company’s brand value gains extra points when it develops a reputation for investing in educational stipends for employee growth. 
  6. Offering education stipends incentivize employee learning leading to a corporate culture with a growth mindset that benefits the company. 
  7. It boosts transparency between the management and floor employees and improves communication relating to financial perks and staff feedback. 

What are the other types of employee perk stipends?

Education stipends are not the only perks available to employees. Check below for a list of other perk stipends that are popular with employees today. 

Some insurance companies offer their own wellness reimbursement program as well, such as the Cigna gym reimbursement program, humana wellness program, or the Go365 program by Humana.


Employees desire more than a paycheck from their employer, even if it raises eyebrows from a few conservative suits out there. And company-funded $20 piano lessons or coaching classes won’t disrupt your bottom line. Neither will it stop employees from wandering to other pastures. But the fulfillment from knowing that you care for their personal growth creates bonds that build teams, value respect, and support a company’s growth. If you would like to learn more about fringe benefits, check out this guide on the different types of fringe benefits you can offer.

Interested in speaking with a benefits expert, to see how you can offer an education stipend? Schedule an introductory call with IncentFit. We’ll learn a bit more about your company’s unique needs and point you in the right direction. 

Corporate Wellness Benefit Managers having a discussion while looking at an electronic tablet.

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