Agencies invest more money in student loan repayments in 2007

Federal agencies provided more than $42 million in student loan repayment benefits to employees in 2007, according to a report released Thursday by the Office of Personnel Management.

From fiscal 2006 to fiscal 2007, there was a 15 percent increase in the number of federal employees receiving student loan repayment benefits, and a 17 percent increase in agencies' overall financial investment in the program, said the report. Agencies have invested more than 13 times as much money in repaying student loans since 2002, and more than 9.5 times as many employees have received the benefit.

The program is designed to help agencies recruit and retain top talent, as 60 percent of the federal workforce is eligible to retire during the next decade.

"In light of the upcoming retirement wave and the increasing competition for talent we face, it is critical for agencies to have the necessary human capital flexibilities to attract and retain the talent they need to meet their specific agency missions," OPM Director Linda Springer said in the report.

OPM's report was based on information from 33 federal agencies. Across government, 6,619 federal employees received more than $42 million in student loan repayment benefits in fiscal 2007, for an average individual repayment benefit of $6,377.

By law, agencies may make payments to a loan holder of up to $10,000 per year, with a maximum payout of $60,000. In return, employees must sign a service agreement to remain with the agency for at least three years.

The report also found that nearly half of agencies either made student loan repayments in fiscal 2007, or established such a program for future use.

Still, 18 agencies reported that budget issues were a major obstacle to using the benefit as a recruitment and retention tool. Another barrier was the three-year service obligation, some agencies said, noting that some potential candidates chose not to submit applications for the program because of the requirement.

The five agencies making the most use of the benefit last year were the Defense, Justice and State departments, Government Accountability Office, and Securities and Exchange Commission.

Criminal investigators were the largest group of employees to receive the repayment benefit, making up 15.7 percent of all recipients for 2007. Of the 1,042 criminal investigators who received benefits, 948 were special agents with the FBI.

Mari Barr Santangelo, chief human capital officer for the Justice Department, said last week that student loan repayments were a major tool in luring top talent to the federal workforce. "This is a different workforce we're attracting these days," she said. "We need to engage you as you look at us."