Employer agrees to sponsor Tuition but requires 10 year commitment

[escondido41]

So I was surprised that they even considered paying the tuition for my program (about $100,000) but then they require me to commit 10 years to them.  There is also no pro-rata deduction of what I have to repay if I don't stay 10 years.  The thing is the reason I applied to the program is to be able to leave this company and find work more relevant to my interests.  So it is kind of ironic.

In a way it becomes like a loan, except I have to pay lump sum when I decide to quit within 10 years and magically disappears after 10 years .  Should I even consider this if I am not fully committed to this employer?  I have never imagined there can be such a lengthy period to commit.

Edited April 7, 2021 by escondido41

[Sigaba]

48 minutes ago, escondido41 said:

 Should I even consider this if I am not fully committed to this employer?  

IMO, yes, you should think this opportunity through very carefully before making a decision.

Can you provide a little more information?

• What's the firm's overall workforce culture? Does it have a lot of "lifers" or do most people move on after a few years?
• Will you be eligible for pay raises based upon merit or cost of living?
• What does your benefits package look like (generally)?
  • Are you eligible for performance bonuses?
• Does the company have a national or international presence that would allow you to transfer once or twice?
• What are the opportunities for career growth/advancement?
• Does the required commitment translate to a high level of job security?
  • What happens if you get terminated for cause?
  • What happens if you get laid off for circumstances beyond anyone's control?
• How will the $100k "loan" impact your credit?
• What's the vibe you get from management? Do you suspect that the $100k would be used to keep you in line if SHTF?

You could run the numbers of the $100k as a zero interest loan vs loans with interest rates comparable to what you'd get as a graduate student (4.3% ish). Then figure out how you could invest the money you're not paying in interest. You can also give some thought about the opportunity costs of making regular payments on the loan versus not having that burden.

On top of that, you could figure out a plan to save $100k in three, five, or seven or nine years in the event you want to leave early. For this option--and other back up plans-- you might want to hire a financial planner.

[Were I in your shoes, I would program at least two ten-year budgets by month, if not pay period. One budget would assume accepting the agreement The other budget, would assume taking out loans and ending up at a firm that's a better fit. For both budgets, I'd include assumptions for pay raises, performance bonuses, vacations, and various flavors of discretionary spending. For the latter budget, I'd assume that I was going to change jobs at least once over the ten years after you earn your degree. This assumption would require projecting additional expenses -- job search, retraining, moving expenses, journey to work transportation costs, maybe even additional clothing expenses.]

 

[escondido41]

Thanks for the reply.  I guess you can assume that I have no plans of staying there 10 years.  So I was not even considering the questiona you mentioned.  Of course if things become interesting I'd stay, but I'd rather its because I want to stay not because I was forced.  In some sense a loan is better because I pay monthly as oppose to leaving the office where I assume I'd have to pay the full price upfront.  I am assuming they would charge interest on it as well if I were to leave.