James has just completed a postgraduate degree at Expensive University. James financed his degrees using $200,000 in student loans. Major tech companies have courted James for the last several years and he has expressed interest in working for a company that is willing to provide assistance to him in repaying his student loans. James has received two offers and has come to you, a CPA, seeking to understand the tax consequences of the offers. One employer proposes to give James $10,000 per year as a cash bonus, which he may use to pay back his loans (or for other purposes if he desires). The other employer proposes that it will contribute up to $10,000 extra to James’ 401(k) plan with the company for each dollar of his student loans James pays off. You have never heard of such an arrangement. Is this a valid usage of a 401(k) plan? What are the tax consequences of the two proposals?