Among the credit unions American Banker ranked as the best workplaces this year, 12 of 70 offer tuition reimbursement and 5 offer student loan assistance. Chartway Federal Credit Union in Virginia Beach pays employees $100 a month toward their student loans, with more than 9 percent of staff enrolled, and caps tuition reimbursement at $5,250 a year. Altura Credit Union in Riverside, California, pays up to $300 a month in student debt relief depending on tenure and up to $5,000 a year in tuition reimbursement for any field of study.
The programs are real, and the credit union executives who run them describe the payoff in engagement rather than retention. Chartway's chief people and culture officer, Rebecca Riordan, says the institution gets the benefit of employees' skills while they are there and, in her words, becomes part of their story of success. That is a fine way to think about a benefit. But the most interesting fact about these numbers is not the generosity behind them. It is that the most famous one, $5,250, was not chosen by any credit union. It was chosen by the Internal Revenue Code in 1986, and it has not moved since.
The generous-sounding numbers trace back to one line of the tax code
Section 127 of the Internal Revenue Code lets employers give education assistance to employees without the value being taxed as wages, up to an annual exclusion of $5,250. The figure appears in Chartway's brochure because it is the largest amount the IRS allows an employer to provide tax-free. Go above it and the excess becomes taxable compensation, which is why almost no program does. The $5,250 is not a budget line the credit union set. It is the ceiling the tax code set, and the employer's program is, in effect, a delivery mechanism for a tax break whose size was decided in Washington.
The number's history is a small parable about how slowly the tax code moves. Before 1986 the exclusion was $5,000. It was raised to $5,250 that year, and there it stayed for four decades. A 1993 bill would have raised it to $6,000 and indexed it to inflation; the bill did not pass. The provision itself was temporary for years, expiring and being renewed retroactively, before it was eventually made permanent. Through all of it, the number stood still while tuition did not. Since 2010 alone, college costs have risen by about 37 percent, total student debt has more than doubled to $1.86 trillion, and the average borrower owes roughly $43,500. The tax code's idea of what a year of educational assistance is worth was frozen at 1986 levels, and every employer in the country has been operating inside that freeze.
The arithmetic of the benefit against the debt is worth running once, because it is not what the brochures suggest. A hundred dollars a month, Chartway's program, comes to $12,000 over a decade, against an average borrower balance of about $43,500, and interest accrues on the unpaid portion the whole way. The benefit is real money, and it is also, plainly, a signal: the employer is standing with the borrower, not retiring the loan. The same is true of the $5,250 tuition cap against a year of college that costs several times that. The tax code sized the benefit in 1986. The tuition market sized the debt in the years since. The two numbers stopped talking to each other long ago, and the programs run on the smaller one.
The employer is the distributor, not the architect
This is worth stating plainly, because the way these benefits are usually covered gets it backwards. The story reads as employer generosity: a credit union choosing to help its staff with school. The choice is real, and the money is real. But the architecture is not the employer's. The ceiling is the IRS's. The tax-free status is the IRS's. The requirement that the program be written down, that it not discriminate in favor of highly paid employees, that assistance be for the exclusive benefit of employees: all of it is statutory design. The employer decides whether to offer a program and how much to fund within the cap. Everything else was decided in 1986, or in the amendments since.
The same tax code shapes the other half of the benefit, the student loan side. For years, employer payments toward employees' student loans were taxable, which made the benefit rare. A temporary change in 2020 made those payments tax-free under the same $5,250 umbrella, and last year's tax legislation made the treatment permanent. The result is the benefit menu visible in the credit union rankings: past debt addressed on one side, future tuition on the other, both bounded by the same number. The employer is generous, and the generosity is confined to a corridor the tax code laid out, at a width that was set when the employer's newest hires were not yet born.
Which benefit you get depends on when you are
The two programs bundle into one name, education benefits, but they serve different people at different moments, and which one a worker can actually use depends on where that worker is in life. Tuition reimbursement helps the employee who is still in school or going back. Loan assistance helps the employee who is already out, carrying debt from a degree that is behind them. The distinction matters because the two groups are not interchangeable, and a workplace with one program and not the other has, in practice, selected which part of its workforce it is helping.
Altura's history illustrates the point from the inside. The credit union originally restricted its tuition program to finance-related degrees, on the theory that the credit union should pay for skills it would use. In 2019 it opened the program to all fields, after leaders asked why aspiring nurses and teachers should be excluded. The change was framed as inclusion, and it was, but notice what it revealed about the default: until someone asked, the benefit was quietly operating as an eligibility rule, sorting employees by the usefulness of their ambitions to their employer. The tax code sets the ceiling. The employer sets the eligibility. The employee sets nothing.
The market for these benefits is also, in part, a monument to the federal retreat. The pandemic payment pause expired in 2023. The Supreme Court struck down the $430 billion forgiveness plan. This year, a district court invalidated the SAVE repayment plan after the administration declined to defend it. Each withdrawal pushed more of the burden of education finance onto the people carrying it, and the employer benefit programs grew into the space the public programs left. The credit unions are not filling a gap because they discovered a new generosity. They are filling a gap because the gap arrived, and the tax code gave them the only tool it had, a $5,250 ceiling from 1986.
One structural detail worth knowing: the two programs share the ceiling. The $5,250 cap applies to the combined value of tuition reimbursement and loan assistance in a calendar year, which means an employee who uses both hits the limit sooner, and an employer that offers both is, in effect, splitting one tax break between two benefits rather than offering two. The design has consequences for who gets what. A new hire with fresh debt leans on the loan side; a mid-career employee going back to school leans on the tuition side; an employee doing both discovers the cap the hard way. The tax code does not just size the benefits. It decides how they fit together, and the fit was designed forty years ago around a single benefit that hardly anyone has heard of by its code section.
The cap finally moves next year, four decades late
There is a last twist, and it is a good one. Under the tax legislation signed in July 2025, the $5,250 cap will finally be indexed for inflation beginning in 2027, adjusted each year in $50 increments. The IRS issued clarifying guidance in April, confirming the cap stays flat through 2026 and then begins to move. Forty-one years after the number was set, it will start keeping pace with the prices it is meant to offset. The indexing is automatic from then on, which means the next time tuition doubles, the benefit ceiling will not quietly fall behind again.
The delay itself is the strongest evidence for the argument here. A benefit that depends on an indexed number was, for four decades, tethered to a fixed one, and nobody's compensation committee could do anything about it. The credit unions in the rankings could have paid their employees $10,000 a year toward school. They did not, and the reason was never stated in any brochure: above $5,250, the tax code stopped subsidizing the generosity, and the generosity stopped. That is how the architecture works. The employer holds the door. The IRS decided, in 1986, how wide the door is, and the door has been that width for as long as most of the people walking through it have been alive.
The programs themselves deserve the credit they get. Chartway and Altura are spending real money on their people, and the people using the benefits are better off for it. The story of success Riordan describes is genuine. It is also, at every point, a story with the tax code in it: the $5,250 ceiling, the temporary status, the permanent loan fix, the indexing that begins next year. Workplace generosity in education runs on rails laid down forty years ago, and the rails were sized for a different price of college. The employers are doing what they can inside them. The number is finally about to move.
Primary sources
- American Banker's report by Nathan Place for the Chartway and Altura program details, the 12 of 70 and 5 of 70 figures, the tuition and student debt statistics from the Education Data Initiative, the federal relief history, and the comments of Rebecca Riordan, Julie Bjornstad, and Jennifer Binkley.
- Ogletree Deakins' analysis of the IRS guidance for the 2027 indexing mechanics, the $50 rounding, the permanence of the student loan provision, and the mandatory disclosure requirement under the 2025 legislation.
- The Horton Group's review of the IRS FAQs for the program requirements and the combined-cap treatment of tuition and loan assistance.