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Student Loan Repayment Program - More Agencies Paying Off Their Employee’s Student Loan Debt

The Office of Personnel Management released a report recently according to which the federal agencies have increased their expenditure on programs for student loan repayment for the employees by 22% from 2007 to the year 2008. John Berry, the director of OPM said that he is pleased with this increase. He said that there are several skills gaps within the federal government and all the possible ways should be adopted to bring best possible services to the public of America.

During the year 2008, 6,879 employees were provided with $51.6 million by 35 federal agencies in the student loan repayments. For the fiscal year 2007, 33 federal agencies took part in the repayment program by distributing $42.2 million of loan repayments to 6,619 employees. In the last cycle of reporting, OPM switched to collecting calendar year data from fiscal year data.

Since the fiscal 2002, the program has substantially grown. At that time, agencies were able to offer repayments of student loans as incentives for the employees for the first time to continue in the government. In 2002, only 16 federal agencies took part by spending $3.2 million loan repayments for 690 employees. The agencies are able to supply as much as $10,000 per year and a total of $60,000 for every employee, in return of which, the recipients are required to commit to 3 years in federal service.

According to the report, although there has been a recent growth within the program, only 39 out of 80 independent agencies and departments have either provided repayments of student loans or are planning to begin in near future. 17 agencies told the OPM that they are not able to spend money on the student loan repayments mainly because of the budget process.

Out of all the agencies that participated, most of the assistance is provided by the Justice Department which spent $23,420,746 on relief of loans for 2,610 employees. Some other major participants are Defense and the State departments, Securities and Exchange Commission and Government Accountability Office.

Officials of the state department told the OPM that according to an employees’ survey who received repayments of the loan, the program has a major impact on the retention. Since the beginning of the program in the year 2002, 2,300 employees of the state have received loan payments and out of these employees, only 127 have resigned before completing their 3 years of required federal service.

Max Stier, the president of non-profit Partnership for Public Service, appreciated the efforts of the agency to take part in this repayment program, especially during these tough economic times. He said that this is a very significant incentive towards recruitment. By all the means of research, this is one of the most momentous ways for encouraging talent from the university campuses to serve to the government.