Back to school season is a good time for employers to update their Code section 127 Educational Assistance Programs.  The One Big Beautiful Bill Act ("OBBBA") included two optional changes that will benefit employees:

• Exclusion of $5,250 currently in effect will be indexed beginning in 2026.  However, in order for employees to receive the maximum amount allowed under Code section 127 each year,  the Program document may need to be amended to add the term “as indexed."

• Educational Assistance Programs can pay/reimburse qualified student loan payments.  This rule was otherwise set to expire on December 31, 2025 and is now permanent.  If the Program already includes this feature but lists an expiration date, that date can be removed. If the Program does not include this feature already, it can be added now.