OPM issues rules allowing student loan repayments

The Office of Personnel Management published final regulations authorizing agencies to repay employees' federal student loans for recruitment and retention purposes in the Federal Register Thursday. Under Section 5379 of U.S. Code Title 5, agencies can repay employee student loans at their discretion to "recruit or retain highly qualified professional, technical or administrative personnel." The law has been on the books for 10 years, but until now there was no authorizing language that agencies could use to implement it. In June, OPM submitted a legislative proposal to Congress that would have taken out the phrase "professional, technical or administrative." OPM's final regulations still contain that phrase, but language in the fiscal 2001 Defense authorization bill lifts the restriction, making the benefit available to more than 400,000 non-postal, full-time executive branch employees who aren't paid under the General Schedule. The authorization bill also adds reporting requirements for agencies. OPM is working on incorporating both of those changes into the rules, but until then, the student loan repayment benefit only applies to General Schedule employees. Agencies can pay up to $6,000 per year in student loans for each employee, but the total amount per employee cannot exceed $40,000. Employees participating in the program must remain with the agency for at least three years. Employees who voluntarily leave government, or who are dismissed because of misconduct or poor performance, must reimburse the agency for their loans. However, agencies have the discretion to waive that restriction. The regulations go into effect Feb. 12, 2001.
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