What is the Section 127 student loan repayment benefit?

The Section 127 student loan repayment benefit lets an employer pay an employee's qualified education loan principal or interest tax-free, within the $5,250 annual educational assistance limit. Now permanent, it shares that cap with tuition and other education costs, so combined assistance cannot exceed $5,250 per year. Payments are exempt from income and payroll taxes for the employee and are deductible by the employer under a written plan; unused amounts cannot be carried forward to a later year. Offering it under a compliant plan supports the Qualified education assistance program (QEAP) strategy.