SPP 505: Employee Reduced In-State Tuition

To provide reduced in-state tuition for eligible employees, retirees, and disabled employees, and their spouses, and dependent children

Arizona Board of Regents Policy Manual - 6–902

University policy

Benefits-eligible employees, their spouses and dependent children; eligible retirees and disabled employees, their spouses and dependent children; certain employees of affiliated units (e.g., member of an ROTC unit or employees of an entity that has an approved contract that grants waivers), their spouses and dependent children; and eligible spouses and dependent children of deceased employees

The Board of Regents allows reduced in-state tuition for eligible employees, retirees, disabled employees, and certain others enrolling for credit courses at Arizona State University, Northern Arizona University, or the University of Arizona. Reduced in-state tuition does not apply to noncredit or correspondence courses.

The amount of the fee to be paid, the limit on the number of credit hours (if any), and any courses that are excluded from the reduced in-state tuition are determined by the University Registrar’s Student Fee Payment Schedule for courses taken at the university. The waiving of fees under this policy does not include expenses such as library and laboratory fees, books, supplies, and other special course fees.

Under current Internal Revenue Service (IRS) regulations, the amount of tuition reduction provided to an eligible employee or family member for education below the graduate level is not taxable. “Below graduate level” means enrollment in a bachelor’s-level program. Eligible employees who are in a graduate-level program are exempt from tax on tuition-reduction benefits up to $5,250 per calendar year.

If a family member (spouse or dependent) of an eligible employee enrolls as a graduate student, the amount of the tuition discount continues to be taxable to the ASU eligible employee. If the eligible employee or family member drops a class within prescribed time limits, the taxable amount may be reduced based on the university registrar’s schedule of refunds. Human Resources will notify the employee of the taxable income and appropriate federal, state, and FICA/Medicare taxes that will be withheld. If the employee remains on the university’s payroll, the appropriate taxes will be withheld from future earnings. If the employee terminates from the university, the employee will receive a 1099 tax statement for the amount of the tuition discount at the end of the tax year.

Employees, Spouses, and Dependent Children

Eligibility Dates

Employees are eligible for reduced in-state tuition on the first day of employment and must be in a benefits-eligible status on the first day of classes. The spouse and dependent children of an eligible employee may enroll for classes that begin on or after the employee’s first day of employment. Reduced tuition forms must be presented to the Business Services Tuition Payment Office on or before the 35th day of a semester or by the end of the second week of a summer session to qualify for reduced tuition.

Leaves of Absence

Employees on approved leaves of absence, their spouses, and dependent children may continue to receive reduced in-state tuition for the duration of their approved absences.

Terminations

When employees terminate employment with the university, they are no longer eligible for reduced in-state tuition. Employees who have prepaid tuition before the start of the semester, and later terminate employment before the first day of classes, are responsible for full payment of tuition at Student Fee Payment.

Affiliated Participants

Former employees whose positions have been eliminated through a reduction in force and their spouses and dependent children are eligible to receive tuition assistance at the rates specified below. The value of reduced tuition rates received by these affiliated participants is not tax exempt, and the participant remains fully responsible for any tax consequence.

Eligibility Requirements

Laid-off employees and their spouses and dependent children may continue to receive tuition assistance, at the reduced rate specified herein, for a period not to exceed 12 months from the layoff effective date. Laid-off employees and their spouses and dependent children may continue to receive tuition assistance for any semester or summer session when registration for classes has occurred at least one day before the expiration of the 12-month period from the layoff effective date. The laid-off employee must have been employed at least five consecutive years at the university immediately prior to the effective date of lay-off and must have received a satisfactory or better performance evaluation. This option is not available to any laid-off employee who elects the buyout option under the reduction in force policy.

Retirees, Spouses, and Dependent Children

Retired employees and their spouses and dependent children may continue to receive reduced in-state tuition under the same terms and fee schedule as eligible employees (see the definition of “Retired Employee”).

Disabled Employees, Spouses, and Dependent Children

Employees whose employment terminates based on approval of long-term disability and who have at least five continuous years of employment immediately preceding termination, along with their spouses and dependent children, may continue to receive reduced in-state tuition under the same terms and fee schedule as eligible employees. This benefit terminates if the employee ceases to receive long-term disability benefits.

Certain Affiliated Employees, Spouses, and Dependent Children

An employee of an affiliated unit and his or her spouse and dependent children may qualify for reduced in-state tuition if:

1. the employee is a member of an ROTC unit

   or

2. an approved written contract exists between the university and the affiliated unit that expressly grants special registration fees to employees of the affiliated unit

   and

3. the president or designee approves.

Spouses and Dependent Children of Deceased Employees and Retirees

In the event of the death of a benefits-eligible employee or retiree with at least five years of continuous, full-time employment, his or her spouse and/or dependent children are eligible for reduced in-state tuition. The spousal benefit terminates at the time a surviving spouse remarries.

Employees may be allowed to attend university classes during working hours with the recommendation of the supervisor and approval of the administrative official. The time required to attend classes must be charged to accrued vacation time, accrued compensatory time, or be made up before or after normal working hours. All employees enrolled in classes during scheduled working hours are expected to fulfill their assigned responsibilities and obligations.

Some programs (e.g., Master of Business Administration) and academic units (e.g., College of Law) may depart from the information shown in the chart above.

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