Proposed rules lift restriction on student loan repayments

Wage grade employees would be eligible for a federal student loan repayment benefit under draft regulations issued Friday by the Office of Personnel Management. In 1990, Congress authorized agencies to repay their employees' student loans at their discretion to "recruit or retain highly qualified professional, technical or administrative personnel." OPM's proposed rules lift that 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. About half of these employees are in wage grade positions. Language in the fiscal 2001 Defense authorization bill lifted the restriction on eligibility for the student loan repayment benefit. OPM initially published final regulations on the student loan benefit in the Federal Register in January, but those rules did not incorporate the new language allowing wage grade employees to participate. Friday's draft rules also require agencies to report annually to OPM on their use of the incentive for recruitment and retention purposes. In turn, OPM must report those findings to Congress. Agencies can pay up to $6,000 a year in student loan payments for each employee, but the total amount per employee cannot exceed $40,000. Employees who participate 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 loan payments made by the agency on their behalf. However, agencies have the discretion to waive that restriction. The comment period on the proposed regulations ends May 15. Written comments should be sent to:

Richard A. Whitford, Acting Associate Director for Employment
Office of Personnel Management, Room 6500
1900 E Street, N.W.
Washington, D.C. 20415

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