Report: U.S. helping more federal workers repay their student loans

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After three years of declines, more federal workers are getting help from the government in paying back their student loans.

After three years of declines, more federal workers are getting help from the government in paying back their student loans.

More than 8,000 federal workers received a combined $58.7 million in student loan repayment help in 2014, according to a new report from the federal Office of Personnel Management.


The loan repayment program — capped at $10,000 per year and $60,000 total per worker — is promoted as an important benefit to recruit and retain federal employees, particularly in science, technology, engineering and math jobs.

With student loan debt a significant burden on recent college graduates, offering help repaying student loans can give federal agencies an advantage in recruitment, according to the report.


The program, created in 1990, is one of several tools that federal agencies have to help in "recruiting and retaining a well-qualified, high-performing workforce," said Brenda Roberts, the personnel office's deputy associate director for pay and leave.

After peaking in 2010 with 11,359 employees receiving $85.7 million in loan repayment assistance, participation in the program dropped for the next three years, to 7,314 workers receiving $52.9 million in 2013, before rebounding in 2014. That year, 8,469 federal employees received an average payment of $6,937, according to the report.

The report did not address the reasons for the decline, or the recent increase in participation.

Federal employees who accept the student loan repayments must agree to work for their agency for three years. If they quit or are dismissed, they must repay the agency.

Nearly 70 percent of college graduates had student loan debt in 2013, averaging $28,400 per student, according to the latest survey from the nonprofit Institute for College Access and Success. Maryland's student debt burden was slightly below the national average, with 59 percent of students reporting loan debt of $26,349, on average.

Federal employees participating in the repayment program were spread across 33 agencies, but three-quarters of them were concentrated in five agencies: the Securities and Exchange Commission and the departments of defense, justice, state and veterans affairs.

Each agency has flexibility in how to administer its loan repayment program. Of 83 agencies surveyed by the Office of Personnel Management, 42 had loan repayment programs but only 33 gave money to employees for their loans in 2014.

The money for the programs must come from the agency's budget.


Roberts said the flexibility allows agencies to use the program to fit their own needs, such as targeting specific professions. Several agencies recently used student loan repayment assistance to help in hiring or retaining workers in science, technology, engineering and math fields.

Having different rules from agency to agency opens the door for favoritism, said Jacqueline Simon, policy director for the American Federation of Government Employees, the largest union for federal employees.

"It's one of those things that management can pick and choose who they give it to," she said.

The union supports standardizing the program, as well as increasing the amount of money that agencies can give their workers for loan repayment.

The Office of Personnel Management does not plan to make any changes to the program, Roberts said.

Despite what it considers flaws in the program, the union supports the student loan repayments as a way to make up for what it terms "inadequate salaries" for federal workers.


"Anything that's supportive of public service, we're in favor of. Anything that puts more money in our members' pockets, we're in favor of," Simon said.

In testimony submitted to a Senate committee Thursday, Anthony M. Reardon, president of the National Treasury Employees Union, said the student loan repayment program is a "commonly overlooked" benefit for federal workers.

"Student loan repayment programs can be a vital way to provide additional compensation to employees, while also assisting with improving workforce skill sets, and overall agency recruitment and retention needs," he said.

Participation among agencies varies widely.

The Department of Housing and Urban Development, for example, has high participation in another program that forgives student loan debt for employees with 10 years of public service. As a result, participation in the student loan repayment program is low, and HUD is reviewing that program.

HUD gave loan repayment help to 487 employees in 2014, none in 2013.


The Defense Department had the greatest number of employees participating, primarily nuclear engineers, mechanical engineers, electronics engineers and nurses. The department gave more than $12.1 million in loan repayment help to 1,774 employees in 2014.

The Defense Department uses the program as an incentive for interns to stay on as entry-level employees. The department "reported that the program has proven very effective, as evidenced by the number of inquiries they have received at job fairs at colleges and universities," according to the report by the Office of Personnel Management.

The Justice Department is another top user of the program, with nearly $12.9 million in loan repayment help going to 1,728 special agents, intelligence analysts and other employees.

The Defense Nuclear Facilities Safety Board gave $10,000 to one engineer in the program last year, but said the student loan repayments are a crucial recruiting tool. The board says it competes against private companies and other government agencies for "top engineering talent at all levels."

With prospective employees fielding multiple job offers, the board says it must use "all of the recruitment incentives at its disposal." The 110-employee agency says the tactic has worked: Seventy-one percent of workers who received the benefit stayed longer than the required three years and 40 percent still work there.