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 This outdated cap significantly limits the program’s effectiveness in supporting working learners.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