GovernmentExecutive.com

Federal agencies significantly increased their use of student loan repayment programs in 2006, according to a report released Friday by the Office of Personnel Management.

From fiscal 2005 to fiscal 2006, there was a 31 percent increase in the number of federal employees receiving student loan repayment benefits, and a 28 percent increase in agencies' overall financial investment in the program, the report to Congress stated.

The program is designed to help agencies recruit and retain top talent, as the federal government faces a potential loss of 60 percent of its workforce due to retirements over the next decade.

"OPM has a leadership role in assisting federal agencies to recruit, retain and develop the employees they need to meet their specific missions," said OPM Director Linda Springer.

Still, 22 agencies reported that budgetary issues were a major barrier to using student loan repayments as a recruitment and retention tool. They cited the tax liability associated with the repayment benefits as another impediment.

OPM's report was based on information from 34 federal agencies. Across government, 5,755 federal employees received nearly $36 million in student loan repayment benefits in fiscal 2006. The average repayment benefit was $6,245.

By law, agencies may make payments to a loan holder of up to $10,000 per year, with a maximum payout of $60,000. In return, employees must sign a service agreement to remain with the agency for at least three years.

The report also found that more than half of agencies either made student loan repayments in fiscal 2006 or established a student loan repayment program for future use.

The five agencies to use the program the most last year were the Defense, Justice and State departments, the Government Accountability Office, and the Securities and Exchange Commission, according to the report.

The report also found that criminal investigators were the biggest group of employees to receive the repayment benefit, making up 16 percent of all recipients for the year. Of the 921 criminal investigators who received benefits, 901 were special agents with the FBI.

Max Stier, president of the nonprofit Partnership for Public Service, said he was pleased with the findings, adding that they show agencies are coming to understand the power of student loan repayments. But he said much more needs to be done to attract younger workers.

"We need to do a better job of letting talented students know that the government offers [student loan repayments] as an incentive," Stier said. "Too few students understand that this is one of the great incentives of government service."

COMMENTS

• I have been with the Department of Veterans Affairs since 2002 and I'm very grateful for the student loan repayment benefit. I have been blessed with a substantial loan reduction over the past five years. Thank You for a great program. Kent Knight Posted July 11, 2007 7:29 PM
• My agency will not participate in the program. I've been told that money comes from the individual SAC budgets. However, they are participating in the Tuition Assistance Program (TAP) for those current employees without college degrees. Management is actually telling Congress right now that they are recruiting and retaining the best employees. I have some prime waterfront land to sell in Arkansas if anyone in Congress is interested in buying. Tom Posted May 16, 2007 6:11 PM
• I have worked for a number of federal agencies and am currently employed as a full-time GS employee and I find similar issues with what the previous reader states. Sure they [federal agencies] may pay for a class here or there; but attempt to improve your marketability to move up through the grades and you are stifled by the “job related” clause that will only permit an employee to attend college level course work that directly applies to their current position. What good is that for improving the education of the existing work-force and as an incentive? Damion Smith Posted May 7, 2007 7:11 PM