Employer Education Assistance Program

plmetz — Tue, 24 Feb 2026 08:23:31 GMT

Hello, my employer has a USC Section 127 educational assistance program. The first part of the program pays up to $3,000 per year for tuition assistance. In this policy, they state that any assistance over $3,000 will be taxed.

The second part of the program is for loan repayment. They give $20,000 split over 4 years in yearly payments of $2,500, $5,000, $5,000, and $7,500. These are paid directly to the loan servicer. In this policy, they also state that any assistance over $3,000 will be taxed.

When I asked why they are not using the federal maximum exclusion of $5,250 (instead of the current $3,000) I got this response:

"The Consolidated Appropriations Act passed at the end of 2020, moved employer-provided student loan repayment plans under the same education assistance tax law as tuition reimbursement. Since the non-taxable tuition reimbursement benefit is limited to $3,000 per year, that in turn becomes the non-taxable limit on the loan repayment benefit."

When I look a the relevant laws I don't see why they can't use the federal maximum exclusion of $5,250 while maintaining the same benefit payments for each program.

Am I missing something?

Thanks

Re: Employer Education Assistance Program

Hal_Al — Thu, 14 Dec 2023 16:35:33 GMT

Q. Am I missing something?

A. No. But, I can't quote you "chapter and verse".

It seems you've already done the research. I suggest you take your findings to your employer.

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Employer Education Assistance Program

Re: Employer Education Assistance Program