OPM raises limit on student loan reimbursements

The decision increases the amount that agencies can reimburse employees for their loans by 50 percent. Previously, agencies were able to give each worker $6,000 per year and $40,000 total. They will now be able to provide $10,000 per year and $60,000 total.

Before agencies can offer repayments, they have to write plans following OPM guidelines. Last June, OPM reported that in fiscal 2002, 16 agencies provided $3.1 million in student loan repayments to 690 federal workers.

The State Department, which assisted with payments to 407 employees, and the General Accounting Office, with 169 cases, were the biggest participants. Several agencies, including the Justice Department, took part in 2002 but helped only one employee with loan repayments.

The student loan benefit was introduced in fiscal 2001 to help agencies recruit high-quality or vitally important employees by helping them pay off existing loans. In exchange, the employees are required to commit to at least three years of employment. They must also pay taxes on the repayment assistance.

OPM Director Kay Coles James moved last week to implement the adjustment quickly, finding that "good cause exists for waiving the general notice of rulemaking" and "for making this rule effective in less than 30 days."