Episode 3: What Changed?

Published September 24, 2026

For Employers For Brokers For Employees

Watch: Episode 3: What Changed?

Here is the transcript for the video:

(0:00) If you looked at section 127 5 years ago and passed on it, you were probably right back then. But a lot has changed since then. (0:07) July 4th, 2025, the one big beautiful bill act was passed by the US government. (0:13) Three major things happened regarding section 127 to the tax code because of the one big beautiful bill. (0:20) First, student loan repayment became a permanent qualifying use of section 127 instead of a temporary one. (0:29) Next, beginning in 2027, the $5,250 annual cap indexes for inflation every year. (0:35) This marks the first time that limit has had any growth mechanism since it was written. (0:43) Finally, the definition of what education means now includes digital delivery of education courses that do not have to be related to the employees work function. (0:53) All of those changes sound technical. They're really not. (0:57) Ultimately, these changes mean the benefits stop being a temporary perk that you have to rejustify every couple years and have now become a permanent growing part of the tax code that you can build a benefit strategy around. (1:10) Plus, the flat $5,250, it had been quietly eroding away for 40 years. (1:15) Now, let's be honest, a dollar in 1986 is not a dollar now. (1:21) Indexing stops that bleed and including digital delivery of education is now a gamecher for how employees can learn new skills in the workplace under section 127. (1:35) My name is Brett Fritz. I built a well and I would love for you to come check out how implementing a section 127 plan can now provide you with a lowmaintenance employee benefit that reduces its overall cost as your employees gain more education.

See what Section 127 could save your team — run the two-minute Fit Check