Section 127 reform aims to unlock private investment in education

Section 127 reform aims to unlock private investment in education

Section 127 reform aims to unlock private investment in education

Why it matters:

An outdated $5,250 cap on tax-free employer education benefits from 1986 is limiting private investment in workforce education.

By the numbers:

  • The $5,250 cap would be worth about $15,000 today if adjusted for inflation
  • 73% of workers are interested in education benefits, but interest drops to 39% when benefits above the cap are taxed
  • U.S. student loan debt totals $1.77 trillion, with average borrowers owing $38,375

The solution:

Two bills (H.R. 6401 and 6402) propose to:

  • Raise the tax-free benefit cap
  • Index it to inflation
  • Include books and learning tools in covered expenses

What’s next:

The House Ways and Means Committee has proposed adjusting the cap for inflation starting in 2026.

Comments on Section 127 Reform

Dear Speaker Johnson,

The Presidents Forum, a collaborative network of 17 innovative higher education institutions committed to expanding access and opportunity for working learners, writes to urge reforms to Section 127 of the Internal Revenue Code. Our member institutions serve over 1 million students annually, with a particular focus on working adults seeking to advance their education and careers. Our commitment to expanding educational access and creating debt-free pathways to higher education compels us to advocate for modernizing this critical program.

The current $5,250 annual limit on tax-free employer-provided educational assistance has remained unchanged since 1986. When adjusted for inflation, this amount would be approximately $15,000 today. This outdated cap significantly limits the program’s effectiveness in supporting working learners. While 73% of workers express interest in utilizing education assistance benefits, this drops to 39% when they must pay taxes on amounts exceeding the current cap. Taxes on payments above the cap are prohibitively high and discourage students from pursuing additional coursework within the same year.

As institutions deeply invested in workforce development and career advancement, we strongly support modernizing Section 127 through three key reforms:

  • Increasing the tax-free limit to better reflect current education costs
  • Indexing the amount to inflation to maintain its value over time
  • Expanding eligible expenses to include books and educational tools

In an era of rapid technological change and increasing demand for upskilling and reskilling, modernizing Section 127 would help more Americans access the education they need without incurring substantial debt.

We applaud the House Ways and Means Committee for including language that adjusts the $5,250 cap for inflation starting in 2026. We urge Congress to support transformative legislation like the Upskilling and Retraining Assistance Act (H.R. 6401) and the Upward Mobility Enhancement Act (H.R. 6402), sponsored by Representatives Danny Davis and Randy Feenstra. Investing in America’s workforce will strengthen our economy, support working learners, and help employers attract and retain talented employees.

Sincerely,

The Presidents Forum

What a Physical Home for Online Students Says About the Future of Distance Learning

What a Physical Home for Online Students Says About the Future of Distance Learning

By Dr. Mark D. Milliron, President and CEO, National University

It might seem unusual for a university long known for online education to open a physical student support hub in San Diego, but earlier this month, that’s exactly what we did.

Called the Nest, National University’s new co-learning space is modeled after the kinds of flexible, welcoming environments remote workers use every day. It’s a place where students can access academic advising, mental health support, child care services, and career resources—all in one setting. This isn’t about making a contrarian case that the future of distance education lies in physical spaces. It’s about reimagining how we support the growing number of students whose lives make traditional college models all but unworkable. The future of distance learning depends not just on where education happens, but on how well it aligns with the realities of students’ lives.

And those lives are complex. Today’s learners are balancing far more than coursework and summer internships. They’re often working professionals, parents, or both. They’re logging into class during lunch breaks, after bedtime, or on the commute home. They’re older, more racially and economically diverse, and often navigating responsibilities that traditional approaches to higher education were not designed to accommodate. In fact, nearly one in five undergraduates today is a student-parent. Nearly half are working full time. At National, we call these students “ANDers,” because they are learners and workers, students and parents. They’re quickly on track to become the majority in higher education. Yet despite their drive, determination, and growing presence, more than half of adult learners stop out within their first year. Too often, higher education expects these students to mold their lives around traditional education, rather than designing a next-generation education that better fits their lives.

They need coursework, schedules, and student support that are flexible, adaptable, and responsive to the many competing pressures they’re juggling every day. For colleges, that means designing learning environments that optimize accessibility, deliver timely support, and make progress possible without requiring students to pause other parts of their lives that matter just as much as their education.

Institutions can better support ANDers by structuring course schedules in formats that align with working students’ lives. Faculty and staff should engage with learners on their terms, whether asynchronously or outside traditional business hours. Wraparound support like academic coaching, child care services, and career advising should be fully embedded into the student experience—even if that means creating physical touchpoints within an otherwise online model.  That is the idea behind the Nest. What we heard from our students–not all, but a big segment–was not that they wanted to come to class. What they were interested in, however, was having the option to come to learning. They wanted a learning home away from home where they would feel a sense of belonging, be able to access just-in-time support, and even take advantage of low- or no-cost childcare services.

The future of accessible education will not be defined by whether learning happens on a campus, at a center, or on a screen. It will be defined by whether universities and colleges thoughtfully design a set of policies, practices, and programs that sync with the real lives of today’s students. ANDers are not outliers. They are a vital part of the future of higher education. A system built to better serve them will make higher education on the whole more responsive and effective for every learner.

Federal Higher Education Update

Federal Higher Education Update

Federal Higher Education Update

Why it matters:

The Department of Education is launching a new negotiated rulemaking process focused on student loan programs.

The big picture:

Two main issues are being addressed:

  • Public Service Loan Forgiveness (PSLF) – reviewing qualifying employers and excluding those engaged in illegal activity
  • Income-driven repayment plans – addressing administrative bureaucracy and redefining family size calculations

Key timeline:

  • May 12: Federal Register publication opened nominations
  • June 2: Nomination deadline for nine constituency seats
  • June 30 – July 2: Committee negotiations begin

Budget reconciliation status:

  • House: Targeting $330 billion in savings
  • Senate: Aiming for $1 billion in savings
  • Goal: Complete before August recess
Excelsior: Bridging Online and In-Person Learning

Excelsior: Bridging Online and In-Person Learning

Excelsior: Bridging Online and In-Person Learning

Why it matters

Excelsior University is reimagining distance education through innovative hybrid programs that combine AI-enhanced online learning with strategic in-person experiences.

The big picture

President David Schejbal sees AI transforming course development and student experiences, while emphasizing the growing importance of faculty engagement and authentic assessment.

Key insights

  • AI will require more basic faculty-student interactions like oral exams
  • In-person components are “AI-proof” and focus on real-world application
  • Site locations chosen strategically

What’s next

Excelsior is moving toward more demonstration-based assessments and competency measurements, moving beyond traditional testing methods that could be compromised by AI.