Either the employer knows the loan does not qualify (it's not just any college or even just any loan). Or, they made a payroll mistake. You would check with the Employer.

If the employer "did it right" (from their perspective) and if the W2 calculations show it was treated as fully taxable, as if that is being treated as a Bonus, then I would treat it as if the Employee made their own payment, because it was made with their post-tax takehome pay. That seems to be what you are describing. I call this, "The employer did the banking." But paid with Employee funds.