Tuition Benefit

Who Can Use the Tuition Benefit & What They Can Study 

Employees (continuous full-time employment, completion of at least one full year of service) 

• Eligibility for the staff tuition benefit is based on active employment status and is the primary condition of the benefit not the disbursement timing of the benefit.
• Eligible for undergraduate, graduate, and PhD coursework
• All semesters/quarters, including summer, J-Term and Study Abroad
• Employee Tuition Benefit Course/credit limits:
  • Undergraduate: up to 3 courses / 9 semester hours per semester OR 2 courses / 8 quarter hours
  • Graduate: up to 2 courses / 8 semester or quarter hours. Graduate-level benefit over $5,250/year is taxable. *IRS will increase this taxable threshold after 2026. 

• Employees who take the required undergraduate prerequisites for graduate programs are subject to the graduate limits.
• If an employee reaches their one-year eligibility date in the middle of a semester or quarter, the Tuition Benefit will not apply until the next semester or quarter after the one-year requirement is met. 
• Active employment determines eligibility for the staff tuition benefit; the timing of the benefit’s disbursement does not. When an employee’s employment ends, eligibility for the tuition benefit ends for both the employee and any dependents. If employment ends before or during a term, employees and dependents are strongly encouraged to contact Benefits and Financial Aid immediately. Any tuition benefit already disbursed after employment ends will be reversed, and students are responsible for any resulting balance. 

Dependents of Eligible Employees (*Children to age 24, Spouse or One LDA) 

• Eligible for undergraduate coursework only
  • No maximum number of courses 
  • One spouse or one LDA may use the benefit, never both 
  • LDA undergraduate benefits are taxable income to the employee 
  • Dependent children’s and spouse’s undergraduate benefit is non-taxable

 Dependent Co-Pay & Billing 

• A 10% co-pay of full tuition is charged for dependents each semester/session 
  • Summer sessions each carry a separate co-pay 
  • All fees and co-pays are paid through the Bursar via the LOCUS portal 

*Dependent children are only eligible for the tuition benefit up to the age of 24. If the student turns 24 in the middle of the semester, the current semester is the last semester they will receive the benefit. If they reach the age of 24 years old and remain enrolled, parents/students are responsible for the full cost of the tuition moving forward. 

The Tuition Benefit does not apply to: 
• Arrupe College 
• Stritch School of Medicine 
• School of Law 
• Executive Education programs 
• Executive MBA / cohort-based programs 
• ESL programs 
• MBA Healthcare Management 
• Non-credit or fee-based Continuum programs* 
• Programs not conferred by Loyola University Chicago
• Some certificates (only covered if billed as credit hour tuition through LOCUS) *

Always confirm with the academic program before enrolling. There are always programs or courses being added to the university curriculum that Human Resources may not be aware of. Please inquire with the School or Program of Interest, and if they are traditional tuition-based and NOT a part of the excluded programs noted above.

*Certain certificates are covered only if the program charges tuition by the credit hour, are billed through LOCUS, and follow the other aforementioned requirements. If the courses are taught by the Continuum program or are fee-based and DO NOT CHARGE TUITION, the program will not be covered by the tuition benefit. Please contact your program of interest directly before enrollment to clarify the course structure and how the course is billed. 

The application of the tuition benefit is an automated process; therefore, no paper form or verification is needed by Human Resources.

For Employees and Dependents 

1. Meet Eligibility Requirements 
   Must satisfy the HR Tuition Benefit Policy Requirements (including one-year, full-time, benefits-eligible service requirement). 
2. Apply & Be Admitted Through Admissions 
   Admission requirements and decisions are handled by the Admissions Office. 
3. Enroll in Courses 
   The benefit cannot apply until you are registered for courses. Your school and academic advisor will provide guidance on how and when to register for courses.
4. FAFSA (Optional)
   The Free Application for Federal Student Aid (FAFSA) is not required to receive the Tuition Benefit for employees, dependent children, spouses, or legally domiciled adults (LDAs).

   However, individuals who wish to be considered for federal student loans or other federal financial aid programs must complete the FAFSA.

   General questions about the FAFSA, deadlines, school codes, scholarships, and other student aid can be directed to the Financial Aid Department. 

5. Ensure dependents are listed in Employee Self Service 
   • Spouse or LDA (only one) 
   • Children under 24 
   • SSNs required (contact Benefits if SSN is unavailable for your dependent) 
6. Automated Tuition Benefit Application 
   No form is needed. Financial Aid applies the benefit after: 
   • Eligibility requirements are met
   • Enrollment is visible in LOCUS 
   • Benefit will be added before or right after the Add/drop period closes. If you change your course enrollment after the benefit was applied, please contact the Financial Aid office to update your benefit. 
7. Pay All Costs Not Covered by the Tuition Benefit 
   • Tuition benefit covers tuition only. 
   • You must pay co-pays, fees, housing, books, and deposits. 

All faculty/staff graduate tuition benefits received in excess of $5,250 per calendar year must be taxed as non-cash compensation and added to an employee's taxable wages. Taxation also applies to Faculty and Staff who have elected to add an LDA as a dependent who is currently enrolled in undergrad courses

Undergraduate Tuition 

• Undergraduate Tuition Benefit is non-taxable for employees, spouses, and dependent children under 24.
  • Federal law currently considers the employee, spouse or dependent child undergraduate tuition benefit as a *non-taxable benefit at educational institutions as defined by the Internal Revenue Code.
• Taxable for LDAs unless the LDA is a legal tax dependent
  • Please note, any Legally Domiciled Adult (LDA) undergraduate tuition benefits received is taxable and imputed as income on the employee's paycheck. Human Resources will add the value of the benefit to the employee's bi-weekly or monthly pay, and the employee will be taxed on that amount. 

Graduate Tuition Taxation (Employees Only) 

• Taxable on amounts exceeding $5,250/year. IRS will increase this taxable threshold after 2026.
• Added as earnings/taxable income and withheld across the relevant academic term.
  If you use the Tuition Benefit for graduate-level courses, the IRS allows up to $5,250 per calendar year to be tax-free. Once your year-to-date tuition benefit exceeds $5,250, the amount above that limit becomes taxable income. 

To make this manageable, Loyola spreads the taxable amount across all pay periods in the semester/quarter in which you take the graduate courses. 
This means: 

• The portion of tuition above $5,250 is divided by the number of paychecks in that semester
• That portion is added to your earnings on each paycheck
• Normal payroll taxes are then taken out of that added amount
• Adjustment for inflation to begin after 2026. “Educational assistance” includes employer payments of principal or interest on any qualified education loan. 

So, your take-home pay (net) will decrease during the semester because you are being taxed on the taxable portion of the tuition benefit. Graduate students may experience lower taxability at the beginning of the year with an increase in the summer or fall enrollment. If you enroll in two courses each eligible semester/quarter, you will experience a steady increase in taxability and lower take-home pay.

Please note: 

• Your program cost, 
• Your individual tax situation,
• Your withholding selections,
• Timeliness of your FAFSA Submission
• When you enroll in your Courses
• And other personal financial factors, such as benefit deductions, garnishments, etc

These can all impact the exact amount of tax owed. Your tax liability can also vary from one semester/quarter to the next, depending on how much of the benefit you use, and how it overlaps with the calendar year. Employees are encouraged to take a look at the Payroll Calendar once their tuition benefit has posted to their LOCUS account to get an idea of the amount their tuition is OVER the threshold and how any pay periods occur within the same semester/quarter. 

Human Resources cannot provide the exact amount of taxation because of the various factors noted above. Employees with questions about their personal tax situation should consult a tax professional. Additional information can be found on the IRS website. http://www.irs.gov/publications/p970/ Employees may seek a course-specific tax exemption under narrow IRS rules for education related to your current duties and responsibilities.

Retirees & Deceased Employees 

• Retirees and eligible dependents may use the benefit if they met requirements before retirement or death.
• Dependents of deceased employees (with ≥10 years of benefits-eligible service) are eligible until age 24.
• Retiree families must email benefits@luc.edu and lufinaid@luc.edu at initial enrollment and each semester. 

Faculty and Staff Children Exchange (FACHEX) & Tuition Exchange Program (TEP) is administered by the Financial Aid Department, and these programs are subject to requirements and guidelines outside of our Tuition Benefit program. 

FACHEX and TEP Program Basics

• Dependent children pursuing their first bachelor’s degree may apply.
• Employees and their spouses are not eligible to utilize these programs for their studies.
• Each program has its own requirements and deadlines
• Admission and award availability vary and are highly competitive. 
• Visit Financial Aid's FACHEX/TEP website for more information.

• Financial Aid Department: FAFSA, award amounts, posting timelines, FACHEX/TEP → lufinaid@luc.edu
• HR Benefits: Eligibility and General Tuition Benefit policy questions → benefits@luc.edu
• Bursar's Office: How tuition is billed, cost, LOCUS access → bursar@luc.edu
• Admissions Office: Application process, when to enroll, program requirements → email respective program

Edited: 7/28/2016, 3/7/17, 11/08/18, 7/17/2019, 1.6.2023, 4/17/23, 8/12/24, 04/10/25, 12/09/2025, 1/8/2026, 4/7/2026