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Business and Policy Areas
Business and Policy Areas

Broad Coalition Presses for Expansion of Employer-Provided Tuition Benefits

February 21, 2017

Anticipating that Congress will be assembling measures to be included in a tax bill this year, the Coalition to Preserve Employer-Provided Education Assistance—a group comprised of higher education, employer, and labor groups—sent a letter to members of the House Ways and Means and the Senate Finance Committees, urging them to maintain and strengthen tax-free tuition benefits that employers provide to workers under Section 127 of the Internal Revenue Code. NACUBO and several higher education associations participate in the coalition.

Section 127 permits employers to offer up to $5,250 per year in tax-free tuition assistance to employees for either undergraduate- or graduate-level study.

As members of the tax-writing committees examine simplification of education tax benefits, the coalition asked them to preserve Section 127. The coalition also urged the tax writers to revisit and adopt bipartisan bills introduced in the last session of Congress that would increase the $5,250 annual limit, expand the use to include loan repayment, and extend the benefit to spouses and children of employees.

With efforts to repeal and repair the Affordable Care Act still expected to happen prior to movement on any tax reform efforts, it is difficult to predict what path Congress may take on tax measures. NACUBO will keep its members apprised of Section 127 developments.


Mary Bachinger
Director, Tax Policy