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ARTICLE · 01 MAY 2026

IRS Guidance Section 127 Education Assistance Programs: 2024 vs. 2026

Jackson Lewis P.C.
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The IRS has released updated guidance on Section 127 educational assistance programs, reflecting changes from the One Big Beautiful Bill Act including permanent student loan repayment benefits and future inflation indexing.

United StatesEmployment and HR
Melissa Ostrower
Melissa Ostrower
Kellie M. Thomas
Kellie M. Thomas
Kathryn W. Wheeler
Kathryn W. Wheeler

In April 2026, the IRS released updated FAQ (FS-2026-10) that supersedes the prior 2024 FAQ (FS-2024-22) addressing Section 127 educational assistance programs. While the core statutory framework remains largely unchanged, the updated guidance reflects both amendments made by the One Big Beautiful Bill Act (OBBBA) and additional IRS clarifications that may influence how employers evaluate plan design and administration going forward.

From Temporary to Ongoing—and More Flexible: What Actually Changed

Two themes emerge from the 2026 update: statutory changes tied to the OBBBA, most notably the permanent treatment of student loan repayment assistance and future inflation indexing of the exclusion limit, and related IRS clarifications that frame those benefits in a more forward-looking and flexible way.

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