Draw On Employer Resources
We all want to save on college costs. Whether you’re planning for your children’s education, putting yourself through school, or trying to pay off your student loans, there may be ways to take advantage of your employee benefits.
Here are a few ways you may be able to save on education with the help of your employer:
1. Consider employer educational assistance.
If you’re going back to school while working, the IRS lets employers reimburse employees for up to $5,250 in tax-free dollars for education-related expenses, including tuition and books. As long as your employer has an educational assistance program in place, it is likely you’ll be able to use this benefit.
Section 127 of the Internal Revenue Code makes that possible. Additionally, the CARES Act (Coronavirus Aid, Relief and Economic Security) expanded the definition of qualified expenses to include student loan repayment assistance, through December 31, 2025 (fingers crossed they make it permanent!).
2. Look into employer tuition reimbursement programs.
You can still get assistance even if you’ve already graduated: your employer can provide up to $5,250 per year in tax-free dollars towards your student loans.
3. Have your employer deduct contributions for a 529 plan.
If you’re contributing to a 529 College Savings Plan, talk to your employer about setting up contributions directly from your paycheck. This will simplify and automate your savings, and ensure you’re putting money away consistently.
4. Have your employer match your 529 contributions.
In some cases, employers will match your 529 contributions, and legislation is currently pending to make those contributions be tax-free for employees. Talk to your employer to find out if this is an option for you.
Have questions about how you can maximize your college savings? Use this easy calendar tool to set up a free consultation with a College Funding Planner and learn more about how we can help you save.