What is an educational stipend?

A professional development education stipend is money you give an employee to use toward learning expenses. Companies can offer the stipends on a yearly, quarterly or monthly basis, depending on how the program is set up. Your organization sets guidelines about how employees use the stipend, but it’s generally a flexible option that allows your team to choose their personal development opportunities.

Benefits of a growth and education stipend

Why should you consider this type of training stipend for your employees? Here are some benefits:

• Gaining new skills: Learning new skills benefits the employee and your organization. The employee learns to take on tasks more effectively, while their new knowledge can help fill the skills gaps you have in your workforce.
• Supporting employee choice: The flexibility that comes with this resource empowers employees to make the best choices for their work goals.
• Attracting new talent: When expanding your team, offering appealing benefits helps attract more applicants. An educational stipend signals to job seekers that you value learning.
• Improving job satisfaction: A training stipend shows your team you want to invest in their growth. These opportunities can increase job satisfaction for many employees.
• Bettering job performance: Gaining new skills often energizes employees and motivates them to put their new knowledge to use. You might see increased productivity and improved work quality with ongoing professional development opportunities.
• Improving work wellbeing: Learning is a driver of work wellbeing.

How to start a training stipend program

Adding an educational stipend to your training and development program takes some planning. The following steps walk you through the process.

1. Set the education stipend amount

Decide how much you plan to offer your employees for the training stipend. Several factors go into calculating this amount. Consider how much money you can put toward the training budget. Then, consider how many employees you have to determine how much each person gets.

You also need to decide how often you’ll provide the stipend. You might offer a one-time, lump-sum payment for educational purposes. If it’s an ongoing program, you may split the amount into monthly, quarterly or yearly payments. Spreading the stipend out may make it easier to budget and encourage your employees to pursue ongoing professional development opportunities.

2. Detail the guidelines for use

Determine how your employees can use the stipend. This method typically allows broad options as long as the learning opportunities relate to the work. A training stipend typically applies to:

• Online and in-person class tuition
• Books and other learning materials for classes
• Professional memberships
• Learning materials for self-learning, such as books and guides
• Coaching
• Conferences

3. Choose how to administer the stipend

You can administer the stipend or use a benefits platform that simplifies the process. Manually administering the stipend is often cost-effective because you don’t have to pay for a separate platform. However, it requires more work from the employee managing the system, and it leaves room for errors. Platforms offer streamlined processes and can save time. If you choose this route, compare various platform options to find one that fits your needs.

Best practices for growth and educational stipends

The following best practices improve the success of your training stipend program:

• Implement the program consistently. Giving all employees access to the education stipend creates an inclusive environment. Ensure all team members can participate in a way that’s meaningful for their job duties.
• Include it in the handbook. Formalize the details of the program by including it in your handbook. This creates a reference for employees so they know what to expect and how to use the program.
• Foster an environment of learning. Creating a general work environment that values education encourages your employees to use the benefit.
• Provide suggestions. Sharing the details on relevant learning opportunities, such as upcoming conferences and classes, inspires employees to take advantage of the program. You can also suggest opportunities that benefit your organization or fill your skills gaps.
• Watch the metrics. Evaluate the program’s success by looking at various metrics, such as how many people use the stipend and the increase in work performance. Over time, you can see if the educational stipend is improving skills and performance among your team. You can also see if the program is widely used.
• Listen to employee feedback. Conduct surveys regularly to gain insight into how employees feel about the program. Use that feedback to make it more effective for your team.
• Promote the program. Talk about the program to your current employees so they fully understand the benefit. It also helps to promote the benefit in your job postings to attract talent.

Frequently asked questions about training stipends

What is the difference between an education stipend and tuition reimbursement?

When you offer a stipend, you typically pay a set amount upfront. The employee uses that money for the designated expenses. Tuition reimbursement happens when you pay an employee the amount they already spent on a covered expense. For example, you might reimburse them for a $150 personal development course they took and paid for themselves. They submit the receipt and a reimbursement form before the company issues a payment for the amount.