Tuition Benefit for Dependent Children Attending the University of Pennsylvania

This benefit has been designed to assist faculty and staff in meeting the cost of tuition for their dependent children.

The faculty/staff member is responsible for managing the tuition benefit for his/her dependents in accordance with the policies and procedures below.

Click here to begin using the online tuition management system. With this easy-to-use online system you can apply for tuition benefits, as well as track the status and view the history of requested tuition benefits.

407.1 ELIGIBILITY

Children who are dependents of the following faculty and staff members, and who are qualified students* under this plan are eligible to receive tuition assistance at the University of Pennsylvania:

1. Full-time faculty in a benefits-eligible title, regular full-time staff or limited service staff who have completed at least three (3) years of regular full-time service at the University.
2. A deceased member of the faculty or regular full-time or limited service staff member, provided the parent was regular full-time on the date of death and had been so for at least seven (7) years.
3. A retired University of Pennsylvania faculty or regular full-time or limited service staff member, provided the parent meets University eligibility requirements and retirement criteria as verified by Human Resources.
4. Visiting members of the instructional staff, only if specifically authorized by the Provost.
5. All staff members affected by position discontinuation and eligible for benefits in accordance with Policy 628 whose dependent children were receiving tuition benefits in accordance with this policy at the time of notice of position discontinuation. Tuition benefits will continue through the end of the semester in which notice of separation was given.    

* A qualified student is one who is enrolled at the University of Pennsylvania as a degree candidate and meets the University's definition of a dependent child under the tuition benefit program.

In the case of faculty/staff eligible for the tuition benefit, the following special situations may affect a faculty or staff member’s continued eligibility:

• Leave of Absence without Pay: Faculty and staff on a leave of absence without pay are not eligible to receive tuition benefits during the leave.
• Workers’ Compensation: Faculty and staff on workers’ compensation will continue to be eligible for the tuition benefit for one year from the date workers' compensation began.
• Long-Term Disability (LTD): Faculty and staff on long-term disability are eligible to receive the tuition benefit for as long as the faculty/staff member continues to qualify for long-term disability per the University of Pennsylvania’s LTD policy.
• Faculty/staff who are active, but not being paid, may be considered ineligible.
• Family and Medical Leave (FML) or Short-Term Disability (STD): Faculty and staff on approved family medical leave or short-term disability are eligible to receive the tuition benefits they are normally eligible for as follows:
  
  
  • If a faculty/staff member is on approved family medical leave (FML) or short-term disability (STD) and the end date of his/her leave is before the eligibility cutoff date for the semester, the faculty/staff member must return to work on his/her approved FML or STD end date and work past the eligibility cut-off date for the term, or continue to be out on official FML or STD. If the faculty/staff member is put on an unpaid leave of absence after family medical leave or short-term disability has been exhausted, he/she will not be eligible for tuition benefits.
  • If a faculty/staff member is on approved family medical leave or short-term disability and the end date of his/her leave is after the eligibility cutoff date for the term, the faculty/staff member is eligible for the tuition benefit.

Tuition benefits for Dependent Children are administered by Human Resources, which makes final administrative determinations if any questions arise concerning an individual’s employment relationship with the University and eligibility for tuition assistance under the program.

407.2 HIRE/TERMINATION DATES

Eligible faculty/staff with a three-year anniversary date* on or before the cut-off date of a given academic term are eligible to receive tuition benefits for their dependent children during the term in which the anniversary occurs. Tuition benefits are awarded on or after the faculty/staff member’s three-year anniversary date. Faculty/staff with a three-year anniversary date after the cut-off date of a given academic term are not eligible to receive tuition benefits for their dependent children until the first academic term following the term in which the three-year anniversary occurs.

If a faculty/staff member terminates or becomes otherwise ineligible on or before the cut-off date of a semester, the University reserves the right to revoke or not award the dependent child's tuition benefit. Payments are revoked near or at the end of the term. If a faculty/staff member terminates after the cut-off date of a semester, the dependent child's tuition benefit will continue through that semester.

The cut-off dates are:

*Only time served in a regular full-time staff or limited service position, or in a full-time faculty benefits-eligible position is counted in the calculation of a faculty/staff member’s anniversary date for tuition benefits eligibility.

407.3 DEPENDENCY

The student must be the dependent child of the faculty/staff member. A child is considered a dependent when the faculty/staff member provides 50% or more of the child’s support. The child must be the faculty/staff member’s dependent at the time the benefit is awarded and for any previous three years during the child’s lifetime. The faculty/staff member must continue to provide 50% or more of the child’s support during the term(s) the benefit is received.

The dependent child must be one of the following:

• your biological child, for whom you are the legally designated parent;
• your stepchild, who is the biological or adopted child of your spouse; or
• your legally adopted child, for whom you are the legally designated parent.

407.4 TUITION AMOUNT

The tuition amount for qualified dependent children of faculty/staff in a tuition-benefits-eligible position is based on the faculty/staff member’s appointment or hire date:

1.     Children of faculty/staff who were appointed or hired on or after July 1, 1997 are eligible to receive undergraduate tuition benefits only. The amount of the tuition benefit is 75% of the tuition fee and technology fee for credit courses at the University of Pennsylvania.

2.     Children of faculty/staff who were appointed or hired into an eligible position on or before June 30, 1997 are eligible to receive undergraduate and graduate tuition benefits for credit courses at the University of Pennsylvania as follows:

a.     Faculty and staff who made a onetime irrevocable election of the OLD PLAN effective July 1, 1983, are eligible for 100% of a dependent child's tuition and technology fees.

b.     Faculty and staff who are in the NEW PLAN and have dependent children who matriculate on or after September 1, 1983, are eligible for the following tuition benefits: 

o    75%-Undergraduate tuition fee and technology fee;

o    75%-Tuition and technology fees for the Perelman School of Medicine, School of Dental Medicine, School of Veterinary Medicine, Law School and Wharton MBA

o    100%-Tuition and technology fees for all other Penn graduate schools.

If both parents are employed at the University of Pennsylvania, tuition assistance is limited to the benefit that would be provided to one faculty/staff member. If a dependent is employed in a benefits-eligible position at Penn, the faculty/staff benefit (Policy 406) supersedes the dependent tuition benefit, and the dependent is limited to tuition benefits through Policy 406 only.

Renewal of the tuition benefit is contingent upon the recipient continuing to meet Penn’s dependency and enrollment requirements and the continued eligibility of the faculty/staff member.

If any changes to the tuition fee or technology fee charges on the bill result in an overpayment of the tuition benefit, Human Resources must be notified immediately. Under no circumstances can the Penn tuition benefit payment be refunded to a student. If it is, the student must return the overpayment to Human Resources as soon as they receive the refund or the faculty/staff member will be liable. Failure to refund the University of Pennsylvania is in violation of the University’s tuition benefit policy and will result in the University taking appropriate actions to recapture the funds.

The tuition benefit is calculated and awarded on a term-by-term basis.

407.5 UNDERGRADUATE TUITION LIMIT

Payment of the benefit for undergraduate tuition is limited to a maximum of four (4) academic years, defined as eight (8) semesters. Students are not guaranteed payment of the benefit for the maximum number of terms. Students who for any reason obtain their undergraduate degree and do not use the benefit for the maximum number of terms are not eligible to receive any additional undergraduate benefits after completing their degree. Payment of the benefit for undergraduate tuition during a summer session is subject to the limitations stated in these regulations and will count as a term used toward the allowable eight (8) semesters.

407.6 STUDENTS RECEIVING OUTSIDE SCHOLARSHIPS

If the dependent of a faculty/staff member is receiving the tuition benefit and will also receive another scholarship, then one of the following must be true:

• If the other scholarship is restricted to either the line item of tuition or technology fee, the gross tuition benefit plus the scholarship cannot exceed the line item of tuition plus technology fee.
• If the other scholarship can be used for charges other than the tuition or technology fee, the recipient must make sure that the scholarship plus the Penn benefit does not exceed the total bill. If the scholarship plus the Penn benefit exceeds the bill, the recipient must make sure that the other scholarship's overpayment can be refunded to the scholarship organization.
• If the other scholarship will be used to cover the taxes that are withheld from a dependent graduate tuition benefit, the recipient must consult with the scholarship organization and/or IRS to determine if this is acceptable.

Note, loans are not considered in the calculation of the tuition benefit amount and therefore are not subject to this policy.

407.7 APPLYING FOR BENEFITS

To apply for tuition benefits, use the online tuition system. Applicants are encouraged to apply as soon as the student has been accepted into a school’s program and receives his/her Student ID or the student receives a bill. Applicants must request payment for every semester in which they wish to use the benefit.

The faculty/staff member can request payment as soon as the online tuition benefit system opens for each term. The latest you can submit a request for payment is as follows:

Tuition benefits are contingent upon timely filing of a request using the online system. Failure to file for benefits in a timely manner may result in the application of late charges to the student’s bill, for which the faculty/staff member is responsible.  Benefits will not be approved for applications that are submitted after the deadline dates listed above for a specified term.

Faculty/staff are responsible for monitoring the student bills for balances and assume full responsibility for the entire bill until the benefit payment has been applied. Resulting balances due to fees not covered by the benefit such as late fees or withholding are the responsibility of the faculty/staff member.

407.8 TAX LIABILITY

Faculty/staff are fully responsible for any tax liability incurred as a result of these benefits being treated as taxable income to the faculty/staff member at any time. If benefits are considered taxable, taxes are withheld directly from the benefit and the net amount is awarded to the student as the tuition benefit. The gross tuition amount and taxes withheld are reported to the IRS as a part of the faculty or staff member's earnings. The taxpayer is responsible for making appropriate payroll withholding adjustments, if desired. The taxpayer is also responsible for settling his/her tax liability on year-end tax filing. The University reserves the right to report benefits amount as income to any taxing authority and withhold taxes from such benefit amounts or from the faculty/staff member’s other salary income.

Under current law, undergraduate tuition benefits are generally not subject to withholding as long as the faculty/staff member’s dependent meets one of the two federal definitions of Dependent Children outlined below.  See the next paragraph for more information. Graduate tuition benefits for dependent children of faculty and staff are subject to federal income tax, FICA (Social Security tax), Medicare tax, and city wage tax.

You should be aware that recent changes in federal tax law may change the taxable nature of undergraduate tuition benefits for some children. If your dependent child does not meet one of the two federal tax law definitions described below, the tuition benefits received will be taxable to you as additional income.

If the benefit is taxable to you, appropriate taxes will be withheld from the benefit before it’s awarded. As part of the tuition benefit application process, you will be asked to declare if your child meets the federal definition of a dependent.

For purposes of any requirement that a child live in your household, temporary absences due to special circumstances, including absences due to illness, education, business, vacation or military service are not treated as absences. Special rules apply in the case of parents who are divorced or legally separated. Please contact your tax advisor for more information regarding these definitions.

Federal Definitions of Dependent Children

Your dependent children eligible to receive tuition benefits include a "qualifying child" or a "qualifying relative" under applicable federal law.

A "qualifying child" is a child who:

1.     is your biological child, adopted child or stepchild;

2.     lives with you for more than one-half of the year;

3.     has not attained age 19 as of the close of the year, or has not attained age 24 as of the close of the year if the child was a full-time student for at least five months of the year (Note: These age limits do not apply in the case of a child who is permanently and totally disabled); and

4.     does not provide over one-half of his/her own support for the year.

A "qualifying relative" is a child who:

1.     is your biological child, adopted child or stepchild;

2.     receives over one-half of his/her support for the year from you (subject to a special rule in situations where a child's support is provided by two or more individuals);

3.     does not have gross income in excess of a specified amount ($4,200 for 2019, but not including certain income earned by a disabled individual at a sheltered workshop); and

4.     is not a qualifying child (as defined above) of you or any other taxpayer for the year.

407.9 AUDITING

Faculty/staff taking advantage of the dependent tuition benefit may be randomly chosen for participation in an audit conducted each semester or at the discretion of Human Resources. This audit requires proof of dependency and accuracy of benefit requests.

Policy Number: 407
Effective Date: 01/03/2019

Last Reviewed Date:  3/15/2019

Revised Date:  7/1/2019

Supersedes Policy Number(s): 407 (08/15/1995, 07/01/1997, 05/26/2005, 04/09/2007, 11/01/2008, 4/11/2011, 04/05/2012, 05/09/2017)

Applicability:  Full-Time Faculty; Regular Full-Time Staff and Limited Service Staff
Cross-reference: Policy 406 , Policy 408 , Policy 409 , Policy 628

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