Student loan repayment benefits hit $42M
- By Florence Olsen
- May 19, 2008
Federal agencies spent more on student loan repayments last year to attract and retain employees than in any previous year, according to the latest annual report to Congress on the repayment program.
The government used the repayment benefit program to substantially increase its criminal investigator workforce last year. It also used student loan repayments to hire or retain 219 information technology management specialists and 143 contract specialists.
In fiscal 2007, 33 federal agencies gave 6,619 employees more than $42 million in student loan repayment benefits, according to the Office of Personnel Management’s 2008 report on the federal student loan repayment program. That amount represents a 15 percent increase in the number of employees receiving student loan repayment benefits compared with the previous year and a 17 percent increase in agencies’ overall spending on loan repayments. The average repayment benefit last year was $6,377.
The limit on loan repayments is $10,000 per employee per year and no more $60,000 for any individual employee in the program. Employees must agree to remain at least three years at the agency that repays their loans.
The OPM report notes that the Defense Department used the student loan repayment program last year to provide nearly $6.3 million in student loan repayment benefits to 1,860 employees. DOD offered the benefit to 871 employees in engineering positions, including 262 mechanical engineers, 166 nuclear engineers, 100 electronics engineers and 72 electrical engineers. It also provided the benefit to 109 contract specialists and 75 information technology specialists.
This year’s report lists several best practices that agencies have found useful for administering the student loan repayment program. For example, the State Department recommended that agencies provide central administrative control over repayment funding and limit loans eligible for repayment to loans taken out for education already completed by the employee.
State established a Web-based application and database for its student loan repayment program. Except for lender statements, the online system has eliminated the use of paper documents.
Eighteen agencies reported that lack of funding prevented them from using student loan repayments as a recruitment or retention tool. However, some agencies said they do not use the program because positions they have are not specialized or difficult to fill.