How Employers Can Help You Pay for College or Student Loans
Did you know your employer might help cover the cost of your education or even assist with student loan repayment? Thanks to educational assistance programs, eligible employees can receive up to $5,250 per year tax-free for tuition, fees, books, and other education-related expenses. Recently, this benefit has been expanded to include student loan payments in some cases. Here’s what you need to know about this potentially life-changing perk.
What Are Educational Assistance Programs? Educational assistance programs are benefits offered by some employers to support employees in furthering their education or managing student debt. Under the Internal Revenue Code Section 127, employers can provide up to $5,250 annually for qualifying education expenses. This amount is tax-free for employees and deductible for employers, making it a win-win situation.
The IRS has also clarified that these programs can now help with student loan repayments. Employers can apply the same $5,250 limit toward paying down an employee’s student debt—a significant boost for anyone trying to manage education costs.
Who Qualifies? Typically, eligibility depends on the employer’s specific program. However, common criteria include:
Being a full-time or part-time employee.
Enrolling in an accredited institution or program relevant to your career.
In some cases, maintaining a specific GPA or agreeing to work with the company for a set time post-graduation.
Check with your HR department to see if your employer offers this benefit and confirm the details.
Why Does This Matter? For students and employees, this program can reduce out-of-pocket expenses, minimize student loan debt, and encourage professional growth. For employers, it’s a way to invest in their workforce, improve retention, and attract top talent.
Take Action Today! If you’re a student, recent graduate, or working professional with education goals, don’t overlook this opportunity. Speak to your employer about available educational assistance programs. For more details, you can explore resources from Forbes and the IRS.
Educational assistance could be the key to unlocking your potential - without breaking the bank.
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Disclaimer: JobWorks, Inc. is relying on publicly available material to bring this information to you. Please consult with a qualified tax, financial services, or student loan professional for information about the 5250 program.
