After months of deliberation, President Trump’s One Big Beautiful Bill Act was passed by Congress last week, and officially signed into law on July 4th, 2025.
While the mega-bill contains many, many provisions (and more than a handful related to student loans), one exciting provision that has received less attention, permanently includes employer student loan repayments under Section 127 of the IRC. That means that employer student loan repayments are now permanently tax-free!
That’s not all. Beginning in 2026, the annual $5,250 limit per employee on tax-free educational assistance will now be increased yearly based on inflation (rounded to the nearest multiple of $50).
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If you are an employer looking to offer a tax-free student loan benefit to your team, Highway Benefits can help you create and administer a sustainable, flexible, and fully tax-compliant benefit plan.
Highway’s turnkey platform makes it easy to launch your benefit in as little as two weeks and takes care of all the administrative lift so that you can ease the financial burden of student debt on your employees, without adding more work to your plate.
Talk to our team today to learn more!
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Disclaimer: This article is purely information and is not intended as financial or legal advice. For more in-depth questions on how to interpret US laws or tax codes, we recommend you speak to a specialized attorney.
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