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Employees receiving benefits under this document should be aware that education benefits for courses
at the undergraduate level are taxable and included in an employee’s gross wages unless a specific
exemption applies. The policies and procedures set forth in this document comprise a program (the
“Program”) that is intended to provide qualified tuition reduction benefits within the meaning of Section
117(d) of the Internal Revenue Code, and, as such, the gross income of an employee will not include the
tuition reduction benefits provided pursuant to this Program, other than with respect to the cost of
books, which will be a taxable benefit except where they are provided to the employee at no cost in
accordance with the policies applicable to other individuals enrolled at APUS.

To the extent that any employee receives from APUS any educational assistance benefits other than
tuition reduction benefits under this Program, such benefits shall be subject to federal income tax and
payroll tax withholding in accordance with federal and state law, unless another specific exemption
applies. An employee shall be responsible for any income tax liability arising from his or her receipt of
such benefits, whether or not APUS withheld tax on those benefits.

This Program is intended to benefit APUS’s employees in general, and shall not discriminate in favor of
highly compensated employees of APUS. This Program will not be considered discriminatory merely
because any educational assistance that is available under the Program to a non-discriminatory class of
employees is utilized to a greater degree by highly compensated employees included in that class.

An employee seeking educational assistance under this Program must comply with all applicable rules
and procedures, including but not limited to eligibility rules and approval and reimbursement procedures,
as set forth in this Program and other applicable policies and procedures of APUS.

Legal Dependents and Spouses
Legal dependents and spouses of full-time APUS employees are eligible to participate in the education
benefit at a 50% discounted rate. Undergraduate education benefits for family members may be taxable
to you if your family member is not your spouse or dependent for federal tax purposes. A family
member is your spouse for tax purposes if you are lawfully married. A family member is your dependent
for tax purposes if he or she is your natural or adopted son, daughter, stepson, or stepdaughter, or foster
child, who is not age 25 or older and is your dependent for purposes of the Child Tax Credit (or would be
but for the different age limit that applies for that purpose). An individual generally is your dependent for
this purpose if you provide over half of his or her support. See the Instructions to IRS Form 1040. Prior to
the continuing education benefit form approval, APUS employees must attest that their familial
participants are legally spouses or dependents per these IRS definitions.

APUS reserves the right to amend, revise or terminate the policies and procedures set forth herein at any
time.

Graduate Level
Full-time employees are eligible to take master’s level courses and to pursue a master’s degree at either
of the APUS institutions at no cost for tuition to the employee, and part-time employees are eligible for
the same benefit but at only a 50% tuition reduction.*

Generally speaking, employees who are utilizing APUS funds to take master’s level courses are expected
to take courses at one of the APUS institutions. However, APUS understands that certain situations may
warrant allowing an APUS employee to take courses outside of APUS. These situations include, but are
not limited to, conflicts of interest and situations where courses required for the professional
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