Agencies seek to iron out student loan repayment details

Federal agencies appear to have differing opinions on the best way to administer the government's student loan repayment benefit.

At a forum held Wednesday at Office of Personnel Management headquarters in Washington, more than 50 representatives from various agencies met with OPM officials to share ideas and establish an ongoing discussion on how best to implement the benefit.

Employee responsibility was one area of marked divergence.

When it comes to getting loan papers in order, including weeding out employee information from consolidated marital loans and coordinating between various lenders the worker is in debt to, Justice Department administrator Deana Willis said, "I put the monkey on the employee's back to get it fixed."

Some participants, however, questioned whether extensive employee participation is appropriate-or even legal. Jo Ann Perrini, manager of OPM's Pay and Leave Administration group, noted that federal law requires that student loan repayments go directly to lenders, not employees, thereby limiting employee involvement. Another participant said loan repayment is meant as an enticement to work for the government and burdening employees with administrative tasks may be counterproductive.

OPM held the forum in response to a Government Accountability Office report that concluded OPM "could build on its efforts to help agencies administer" their student loan repayment programs. GAO reported that agencies said the program was a useful recruitment and retention tool, but was "time-consuming and cumbersome to operate."

GAO stated that 2,945 employees received student loan repayments in fiscal 2004, at a cost to the government of $16.4 million. Congress allows agencies to reimburse employees up to $10,000 annually, and $60,000 in total.

Agencies vary, however, in how they determine which employees are eligible for repayments. A GAO participant said that agency offers the benefit to all employees, from administrative assistants to attorneys.

The State Department, though, offers the benefit only to employees with specific jobs and educational backgrounds, such as lawyers and accountants, according to State's director of employee relations, Teddy Taylor.

Taylor said the fact that not all employees can get their loans repaid "is not a contentious" issue. He also said the program at State has clearly increased the department's ability to recruit employees to "historically difficult" posts such as Baghdad and Kabul, Afghanistan.

Willis pointed to one key to State's success: funding. Taylor said the department has separate funding devoted each year to student loan repayments. Justice has to pull money from other areas to fund the program, according to Willis.

While the GAO report, and OPM officials at the forum, did not advocate a uniform approach to student loan decisions among agencies, they did suggest that some administrative duties could be shared.

OPM should give "more assistance on the technical aspects of operating the program," GAO recommended.

Agency representatives who participated in the meeting have formed a number of working groups to address specific implementation issues. A follow-up forum will be held in the fall, Perrini said.