I think it would be better if it was offered as "the company will provide X tax-exempt dollars, you, the employee can choose how many of those dollars go to pay

I think it would be better if it was offered as "the company will provide X tax-exempt dollars, you, the employee can choose how many of those dollars go to paying student loans and how many go to a 401(k)." I would consider being more paternalistic and require some percentage to to the 401(k) because putting money aside for retirement is an important habit to develop early. I also agree that this could further exacerbate the high cost higher education.