Career Advice Tuesday – “Indentured Servitude By Tuition Reimbursement”

February 9, 2010

Dear InfoSec Leaders:

I am looking for some advice about funding an investment in my career.  Let me explain the situation.   I am a technical information security professional that has been striving to transition my career to become more of an Information Security business leader.  I have identified getting an MBA from a good school as part of that goal.  The cost of this investment is about $75,000 plus my time.  At this point, I am willing to commit the time, but the cost is a bit prohibitive.  One way that I have thought about supplementing the cost was to find an employer that is willing to provide tuition reimbursement as part of their benefit program, since my current employer does not.

Well, after months of searching I have found an employer that has such a program and a role that is suited to help me accomplish a near term career goal.  (That is the good part.)

Here lies the catch.  First, the position is a good one for my career now, but I do not see more than a 3 year life expectancy for me in the company or the role for various reasons.  The 3 years will enable me the time to begin and complete my MBA program.   However, the tuition reimbursement program will require me to reimburse my employer the amount of the tuition if I leave the company any time within 2 years of participation. 

If my plan plays out, and I remain for 3 years, I will owe my employer about $50,000.  If I do not want to reimburse my employer, I will have to remain for an additional 2 years - which may cause me to miss out on career opportunities that my MBA and my experience will have prepared me for.

Can you advise me on how I should proceed with my career and if I should accept this new role or not?


“Indentured Servant”

Dear “Indentured Servant”:

Let me first applaud you for clearly thinking about your career and attempting to plan your career in a logical fashion.   It is great that you have taken the time to look at your new employment situation from all angles – the pros and the cons – prior to making this decision.

Here are the questions that you should ask yourself:

1) If the new employer did not offer tuition reimbursement would I accept the position? 

By removing the added benefit from the equation you can look at the job without prejudice which will provide you a good foundation for your decision.

2) Is it possible that I will remain at the company for more than 3 years?

I find it very interesting that before you have even accepted your new position you have already predetermined your exit.  I am not sure that this is fair to you, your career,  or your employer.  If you do accept the position, one of your goals could be to create a career opportunity that will provide you with leadership opportunities that go beyond three years.   Even if the role lasts 4 years, you would have saved $25,000 more than you had originally planned.

3) Would I be willing to pay $50,000 for the MBA program that you have been accepted to?

In this day and age, $50,000 for an MBA from a well respected university seems to be a good deal.  However, I think that the item that you have to make peace with is the fact that  you may be on the hook for $50,000 if you decide to leave your company during that time.  One way you can look at this, will be how quickly will this added MBA credential enable you to recoup your investment (in terms of compensation).  You may want to get outside advice so that you have a realistic expectation.   You should get comfortable with the required time frame. 

Whatever you do, do not go into this thinking that your future employer will reimburse these monies – and if they do, it will most likely be under the same “indentured servant” contract conditions.

 Here are some other things to think about:

If you do leave the employer how quickly will they require you to pay the money back? 

If you have to pay it back immediately, you will need to plan to save a certain portion of your income. 

What are the tax implications of accepting tuition reimbursement?  

Seek professional advice from your accountant. 

How will your salary increases/bonuses  be affected by this benefit? 

For example, if they know you can not afford to leave, they may take advantage of the situation (there is no real way of knowing – so you need to come to peace with this).   

In general, my belief is that if you want to pursue your MBA (or any career investment) do so because you believe in its value.  If you can find someone to pay for it – even better.  

Tuition reimbursement programs can be an excellent benefit, provided that you do not allow them to turn into an albatross that hinders your career growth.

Hope this helps,

Lee and Mike

Posted by lee | Filed Under Advice, Career Advice Tuesday 


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