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Government Doled Out More Money in 2014 to Help Feds Repay Student Loans

Defense, Justice, and State are among agencies that use the benefit the most.

The federal government last year increased its investment in a popular but rare perk – the repayment of federal employees’ student loans.

Thirty-three agencies awarded more than $58.7 million in student loan repayment benefits to 8,469 federal employees in 2014. That’s more than a 15 percent increase from 2013 in the number of employees receiving the benefit, and an 11 percent boost in agencies’ overall investment in the incentive. Employees at five agencies (Defense, Justice, State, Veterans Affairs, and the Securities and Exchange Commission) accounted for nearly 75 percent of the benefit’s recipients in 2014.

Nine other agencies, including the U.S. Agency for International Development and Commodities Futures Trading Commission, created student loan repayment programs in 2014, though they did not provide any awards to employees that year.

However, the average amount agencies provided for help repaying student loans to individual in 2014 was $296 less than in 2013: $6,937 compared to $7,233.

Agencies increasingly used the perk to recruit and retain employees in STEM (Science, Technology, Engineering, and Mathematics) jobs last year. Defense alone repaid the student loans of 578 engineers in 2014.

“Employees in STEM career fields are vital to the federal government’s mission, and OPM is committed to continue working with agencies to help them attract and retain talented professionals using student loan repayments and other human resources management flexibilities,” said Office of Personnel Management acting Director Beth Cobert in the agency’s new report on 2014 federal student loan repayment data.

The federal student loan repayment program permits agencies to repay federally-insured student loans to recruit or retain highly-skilled employees, and its implementation varies widely across government. Some agencies don’t offer it at all because they don’t need to (they don’t have problems recruiting or retaining highly-skilled employees for hard-to-fill jobs), or they simply lack the funds to do so. Others agencies last year told OPM that “some job candidates or current employees are uncomfortable” committing to the minimum three-year service requirement in exchange for the benefit.

Agencies have the authority to grant up to $10,000 a year for a total of $60,000 in student loan repayments in return for a promise of three years of service from workers. The money can go to new recruits or current employees. Federal employees also technically are not prohibited from using the benefit (if it’s offered) to help repay their children’s outstanding student loans. Though it’s not clear how often the benefit is used for this purpose, and agencies probably are loath to offer it for that purpose.

House Republicans repeatedly have targeted the student loan repayment benefit for elimination as a way to save the government money. Getting rid of the incentive would not yield significant savings as far as the federal budget is concerned.

While significant use of the benefit is not widespread across government, agencies that did provide the perk told OPM it was useful in recruiting and retaining workers.

“Agencies should tailor their use of student loan repayments to meet their specific goals while ensuring that the cost is commensurate with the benefits gained,” the report recommended.

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