Student loan benefit misunderstood, officials say

Many federal employees are eager to take advantage of the government's student loan repayment benefit, but there is widespread misunderstanding about how the incentive really works, according to agency officials. While many federal employees believe the benefit is an entitlement, the real purpose of the student loan repayment benefit is to help agencies recruit and retain highly skilled workers for positions that are difficult to fill, officials from the Office of Personnel Management and Veterans Affairs Department said Friday. "It is a recruiting and retention tool for managers to offer to certain highly qualified employees that they want to keep in the government," said an OPM official familiar with the incentive. For example, if an employee tells his supervisor he is leaving the government for another job, the manager could decide to offer him the benefit as an incentive to remain in public service, said the source. Many federal employees mistakenly view the benefit as something they can apply for. Although the law has been on the books for 11 years, agencies have only been authorized to offer the student loan repayment benefit since April. Agencies are not required to offer the incentive. Agencies that choose to offer it can pay up to $6,000 a year in student loan payments for each employee, but the total amount per employee cannot exceed $40,000. Employees who participate in the program must remain with the agency for at least three years. Maxcine Sterling, associate director of worklife and benefits at the VA, said there is confusion in the federal workforce about how the student loan repayment benefit program operates. "It is really targeted to those individuals in hard-to-fill jobs, she said, citing jobs in information technology and geriatric nursing positions. Sterling said agencies have a lot of flexibility to figure out where the benefit will have the greatest impact. "It could be a certain geographic area, or a certain position where the agency has a hard time placing people," she said. Sterling said the VA is close to finalizing its implementation plan for the incentive, which takes effect in October. Each office within the VA that decides to use the benefit to attract employees will use funds from their individual budgets, she said. According to OPM, many agencies, including the VA, are preparing plans to administer the benefit. OPM will have a better idea of which agencies are using the incentive in the fall, when agencies must submit annual reports to OPM on their use of the benefit.

Employees should check their agency's Web site or ask their human resources personnel for more information on the student loan repayment benefit.