Student Loan Repayment for Federal Employees
Student Loan Repayment
for Federal Employees
Updated April 6, 2007
Barbara L. Schwemle and Lorraine H. Tong
Analysts in American National Government
Government and Finance Division
Student Loan Repayment
for Federal Employees
Summary
Under a law enacted in 1990 (P.L. 101-510) and amended in 2000 (P.L. 106-
398) and 2003 (P.L. 108-123 and P.L. 108-136), federal agencies may repay portions
of the student loans of highly qualified General Schedule (GS) and non-GS
(including Foreign Service) employees they seek to recruit and retain. Eligible
employees must sign at least a three-year service agreement to remain with their
agencies. In return, these employees may receive loan repayments of up to $10,000
per year and up to $60,000 in total from an agency. Various student loans specified
in law and authorized by the Higher Education Act of 1965 and the Public Health
Service Act may be repaid. Concerns about the attractiveness of government service
to, and the large amount of student loan indebtedness of, new graduates along with
the possibility of a significant number of retirements from the federal government in
the next several years underlie student loan repayment programs. The Office of
Personnel Management (OPM) published final regulations to implement the original
law on January 11, 2001, and final regulations to implement the amendments to the
law on July 31, 2001, and April 20, 2004. Executive branch agencies are considering
and implementing student loan repayment programs. OPM reported to Congress in
May 2006 that 28 executive branch agencies made repayments to 4,171 employees
at a cost of some $26.664 million in FY2005. The number of recipients increased by
In the legislative branch, the Government Accountability Office (GAO, formerly
the General Accounting Office), the Government Printing Office (GPO), and the
Library of Congress also have authority under the laws stated above to establish
student loan repayment programs. Enacted in the 107th Congress, P.L. 107-68
authorized the Senate and the Congressional Budget Office (CBO) to institute
programs, and P.L. 107-117 authorized the U.S. Capitol Police to establish one.
Under the Consolidated Appropriations Resolution, 2003 (P.L. 108-7), enacted in the
108th Congress, the House of Representatives has authority to establish a program for
its employees, and additional authority was granted to the U.S. Capitol Police to
establish a program and to provide tuition reimbursement for employees’ ongoing
career development education. To date, the Senate, the House, the U.S. Capitol
Police, CBO, GAO, GPO, and the Library (not including the Congressional Research
Service) have implemented repayment programs.
In both the executive and legislative branches, questions of how to fund the
programs, what the required period of service should be, the criteria for repayment
eligibility, and the kinds of program data to be collected will likely continue to be
considered as repayment programs are implemented. OPM published proposed
changes to the regulations governing repayments in the Federal Register on January
The legislative history, statutory authority, status of executive and legislative branch
implementation, issues for consideration, and oversight of student loan repayment
programs are discussed in this report, which will be updated as events warrant.
Contents
Background ......................................................1
Legislative History of Student Loan Repayment..........................3
101st Congress: Executive Branch Loan Repayment Program...........3
Senate Bill...............................................3
House Bill...............................................4
Final Action..............................................9
the Congressional Budget Office, and U.S. Capitol Police.........10th
108 Congress: Further Extension to House Employees and Others.....11
Implementation in Legislative Branch Agencies.................13
Executive Branch Law and Implementing Regulations....................14
Service Agreement........................................15
Reimbursement Required...................................15
Repayment Plan Features...................................15
Criteria for Repayments....................................16
Student Loans Covered....................................16
Tax Implications.........................................17
Reporting Requirement....................................18
Legislation Introduced, But Not Enacted, in the 109th Congress
to Amend the Law....................................18
Proposed Changes to the Regulations.........................19
Student Loan Repayments in the Executive Branch......................21
Effectiveness of Student Loan Repayments.....................25
Administration ...........................................26
Barriers .................................................28
Publicity ................................................28
OPM’s Administrative Role................................28
Student Loan Repayments in the Legislative Branch.....................30
Need for Congressional Program.............................31
Other Legislative Branch Entities............................35
Student Loan Repayments in the Judicial Branch........................39
Issues for Consideration............................................39
Funding ....................................................40
Required Service Agreement....................................40
Eligibility Criteria............................................41
Records and Reports..........................................42
Oversight of Repayment Programs...................................43
Appendix .......................................................45
List of Figures
Figure 1. Student Loan Repayments..................................22
Figure 2. Student Loan Recipients....................................23
List of Tables
Table 1. Student Loan Repayment — Executive and Legislative Branch
Agencies, FY2004 and FY2005..................................45
Table 2. Student Loan Repayments by Executive Branch Agency,
with Number of Recipients and Cost of Repayments,
FY2002, FY2003, FY2004, and FY2005..........................50
Student Loan Repayment
for Federal Employees
Background
Congress has authorized student loan repayments for highly qualified General
Schedule (GS) and non-GS (including Foreign Service) employees in the executive
branch.1 Repayments also are authorized for employees in the House of23
Representatives, the Senate, the Congressional Budget Office (CBO), the
Government Accountability Office (GAO), the Government Printing Office (GPO),4
the Library of Congress, and the U.S. Capitol Police. In the executive branch, and
in GAO, GPO, and the Library of Congress, the repayments may be up to $10,000
annually and up to $60,000 in the aggregate. In the legislative branch, the annual and
aggregate limitations vary. The House and Senate each authorize repayments up to5
$500 a month, and $40,000 in the aggregate. Repayments to the U.S. Capitol Police
may be up to $10,000 annually, and $40,000 in aggregate. CBO’s repayments may
be up to $6,000 annually, and $40,000 in aggregate. A service agreement of at least
three years is required in the executive branch, while in the legislative branch, the
service agreement varies from one to three years.
Enactment of the executive branch statute followed a recommendation of the
National Commission on the Public Service (commonly referred to as the Volcker
Commission, after its chairman, Paul Volcker) that a federal service loan forgiveness
program be established for federal service.6 In April 1989, after an 18-month study,
1 P.L. 101-510; Nov. 5, 1990; 104 Stat. 1659, 5 U.S.C. §5379, as amended by P.L. 106-398;
Oct. 30, 2000; 114 Stat. 1654A-316 to 1654A-317, and P.L. 108-123; Nov. 11, 2003; 117
Stat. 1345, and P.L. 108-136; Nov. 24, 2003; 117 Stat. 1637. Loan repayment is sometimes
referred to as loan forgiveness; these terms are used interchangeably in this report. For an
analysis of loan forgiveness programs for employees in various public service (including
teachers, child care providers, and law enforcement or corrections officers) and health care
(including nurses, doctors, medical technicians, and health researchers) professions and in
the military, see CRS Report RL32516, Student Loan Forgiveness Programs, by Gail
McCallion.
2 P.L. 108-7; Feb. 20, 2003; 117 Stat. 354 and 117 Stat. 358-359.
3 P.L. 107-68; Nov. 12, 2001; 115 Stat. 563-568 and 115 Stat. 577-578. (For both the Senate
and CBO.)
4 See footnote 1.
5 The monthly computation reflects the unique election cycles of Congress and the possible
impact on congressional offices, committees, and administrative support offices.
6 The National Commission on the Public Service, Leadership for America; Rebuilding the
Public Service, Task Force Reports to the National Commission on the Public Service
(continued...)
the commission issued its report on rebuilding the federal civil service. Formed in
response to “concern[s] that the federal workforce may be ill-prepared to serve the
nation in the 21st century,” the commission dedicated itself to “placing high on the
national agenda the need to strengthen the effectiveness of the career services in
government.”7 A commission task force on recruitment and retention found that
inadequate compensation and the unattractiveness of government employment to
recent college graduates were among the reasons for the federal government’s serious
problems in recruiting and retaining a quality workforce.8
At the time that student loan repayments were authorized by Congress, the
issues of the attractiveness of government service to9 and the large amount of student
loan indebtedness of10 new graduates were of particular interest. More recently, the
possibility of a significant number of retirements11 from the federal government in
6 (...continued)
(Washington: 1989), pp. 76, 96. (Hereafter referred to as Leadership for America.) The
commission was a private, nonprofit organization assembled to prepare recommendations
to the President and Congress on rebuilding the public service.
7 Leadership for America, Preface.
8 U.S. The National Commission on the Public Service, Committing To Excellence;
Recruiting and Retaining a Quality Public Service, The Report of the Task Force on
Recruitment and Retention (Washington: 1989), pp. 69-111. With regard to private sector
practices, a literature search did not reveal specific information about student loan
repayments offered by private sector companies, but did show various types of
compensation and benefits afforded to employees in the private sector. For example, see
Robert Levering and Milton Moskowitz, “The 100 Best Companies to Work For,” Fortune,
vol. 155, Jan. 22, 2007.
9 The issue continues and is reinforced by opinion surveys. For example, a survey
commissioned by the Partnership for Public Service of 805 graduating college seniors
revealed that two-thirds of seniors said getting a private sector job or starting their own
business would make their parents prouder than getting a job in government. (Partnership
For Public Service, “New Survey of the ‘Class of 9/11’ Finds Patriotism is Not Enough to
Inspire New College Graduates to Public Service,” May 19, 2005).
10 For data on the significant amount of student loan debt that college graduates are carrying,
see, for example, The Project on Student Debt, White Paper; Addressing Student Loan
Repayment Burdens; Strengths and Weaknesses of the Current System [Washington: DC],
Feb. 2006; The College Board, Trends in Student Aid 2006 (Washington: Oct. 24, 2006);
Collegiate Funding Services (CFS) News Release, With College Loans Bills Coming Due,
Not All Graduates Are Prepared to Pay, Aug. 27, 2003; American Bar Association
Commission on Loan Repayment and Forgiveness, Lifting the Burden: Law Student Debt
as a Barrier to Public Service [Chicago: Aug. 2003]; Equal Justice Works, National
Association for Law Placement, Partnership for Public Service, From Paper Chase to
Money Chase: Law School Debt Diverts Road to Public Service ([Washington], Nov.
2002); and Tracey King and Ellynne Bannon, The Burden of Borrowing: A Report on the
Rising Rates of Student Loan Debt (Washington: State PIRGs’ Higher Education Project,
Mar. 2002).
11 According to OPM, there were 50,643 retirements by full-time, permanent employees in
FY2003, 54,285 retirements in FY2004, 60,070 retirements in FY2005, and 58,583
retirements in FY2006. OPM data are available at [http://www.fedscope.opm.gov/
(continued...)
the next several years has joined these issues as a reason underlying student loan
repayment programs in the federal government.12 Authorization of repayments in the
legislative branch resulted from similar concerns about these recruitment and
retention issues.
The legislative history, statutory authority, status of executive and legislative
branch implementation, issues for consideration, and oversight of student loan
repayments are examined in the next sections of the report.
Legislative History of Student Loan Repayment
101st Congress: Executive Branch Loan Repayment Program
Senate Bill. On May 18, 1989, one month after the publication of the Volcker
Commission’s report, Senator Ted Stevens introduced, for himself and Senator David
Pryor, S. 1071, a bill to authorize the repayment of student loans for certain federal
employees. In his statement accompanying the introduction, Senator Stevens noted
the commission’s recommendation and stated that the bill was “designed to improve
the Federal Government’s ability to compete for top college graduates,” many of
whom have heavy debt and “simply cannot afford the option of Federal service.”
Saying that agencies would have discretion to use the authority as they saw fit “to
recruit highly qualified people that are important to its mission,” Senator Stevens
emphasized that agencies “would be required to absorb the expense of loan
repayment out of [their] existing payroll budget,” and went on to say that the
provision envisioned “no new outlays whatsoever.” According to Senator Stevens,
this would ensure “that this authority is used sparingly and only when necessary” and
require agency managers “to make some tough decisions” in “reallocating funds to
use this recruiting incentive.”
11 (...continued)
index.asp]; choose “Data Cubes Separations,” then “Cube Interfaces Generic,” then
FY2003, FY2004, FY2005, and FY2006, and set the separation (separation from federal
service) parameter to retirement, the work schedule parameter to full-time, and the type of
appointment parameter to permanent. (FedScope shows that new hires for full-time
permanent employees totaled 88,293 in FY2003; 84,548 in FY2004; 92,399 in FY2005; and
96,353 in FY2006.) Retirements projected for FY2006 are 55,508 and for FY2007 are
57,472. (U.S. Office of Personnel Management, Retirement Statistics (no date) available
on the OPM website at [http://www.opm.gov/feddata/retire/]; choose “Projections” to access
the document.)
12 Student loan repayments are among the incentives available to federal agencies to foster
recruitment and retention of employees. At an interagency management conference in 2005,
Kevin Mahoney, deputy associate director at OPM, and other participants were reported to
have said that the federal government must better promote “its job opportunities, potential
for advancement, and competitive benefits packages.” According to Mr. Mahoney, “There’s
no question there is a war for talent[;] the federal government is struggling to regain its
image as an employer of choice.” Tichakorn Hill, “In Battle for Talent, ‘Go to Campuses
and Market, Market, Market,’” Federal Times, May 3, 2005.
The bill’s provisions requiring at least three years of service, an acceptable level
of performance, and cessation of the loan repayments if the employee separated
(either voluntarily or for reasons of poor performance) from federal service were
viewed by Senator Stevens as “ensur[ing] the Government a return on its human
resource investment.”13 Senator Pryor reiterated the comments of Senator Stevens
in saying that “[a]gencies will have wide latitude to work out how much of a loan
will be repaid by the agency and the length of time the employee will have to commit
to staying with the agency.” He anticipated “that agencies will exercise great
discretion in using this program” as they “will be required to absorb the costs.”14
After referral to the Senate Committee on Governmental Affairs, S. 1071 saw no
further action.
House Bill. In the House of Representatives, Representatives Benjamin
Gilman and William Ford introduced H.R. 2544 on June 6, 1989, which included, as15
section 3, provisions on student loan repayment similar to those in S. 1071.
Representative Gilman, in a statement accompanying the introduction, noted that the
Volcker Commission had recommended repayment of student loans and said the bill
would make “the Federal Government an employer of first choice for many of our
Nation’s finest students.” He stated, “Repayment shall be from funds already
appropriated at the time of appointment.” He also thanked Senators Stevens and16
Pryor for “formulating and drafting major provisions of the bill” on the repayments.
House Subcommittee Hearing. The Public Service Education Assistance
Act of 1990 (H.R. 2544) was referred to the Civil Service Subcommittee of the
House Committee on Post Office and Civil Service. The subcommittee conducted
a hearing on the bill on July 27, 1989, and took testimony from the director of the
Office of Personnel Management, the executive director of the National Commission
on the Public Service, and the special counsel of the Consumer Bankers Association.
In remarks during the hearing, Representative Ford described H.R. 2544 as a “sort
of a GI bill for civil servants.”17 OPM Director Constance Newman stated that the
agency had “not given enough consideration to how much this approach would cost
or to whether the benefits would justify the cost.” She also expressed several
concerns about the student loan repayment provisions in H.R. 2544. Those concerns
related to:
13 Sen. Stevens, “Repayment of Certain Student Loans,” remarks in the Senate,
Congressional Record, vol. 135, May 18, 1989, pp. 9895-9896.
14 Sen. Pryor, remarks in the Senate, Congressional Record, vol. 135, May 18, 1989, p.
15 Section 2 of H.R. 2544 authorized agencies to pay or reimburse federal employees for the
cost of basic degree training.
16 Rep. Gilman, “The Public Service Education Assistance Act of 1989 (H.R. 2544),”
remarks in the House, Congressional Record, vol. 135, June 6, 1989, pp. 11032-11034.
17 U.S. Congress, House Committee on Post Office and Civil Service, Subcommittee on the
Civil Service, Public Service Education Assistance Act of 1989, hearing on H.R. 2544, 101stst
Cong., 1 sess., July 27, 1989 (Washington: GPO, 1989), p. 4.
!not wanting to induce people to work for the government just long
enough to qualify for loan repayment and then move elsewhere;
!consideration of the equity of a recruitment incentive that would
have no value for those who have already paid their own way
through college;
!the essential need to limit the coverage to occupations where there
is difficulty in recruiting or retaining employees with critical skills
(identified as scientists and engineers);
!the need to examine carefully the administrative feasibility of
agencies making loan repayments;
!the lack of a provision on a central regulatory authority to ensure
uniformity among the agencies;
!the inappropriateness of not having an employee repay any loan
payments made by the agency if he or she fails to complete the
service requirement; and
!the lack of a limit on how large a repayment commitment could be
made. 18
The latter three concerns were addressed by provisions that were included in the bill
when it was reported to the House. Asked about the appropriateness of a three-year
service requirement, Mrs. Newman stated that “three is probably a fairly standard
time,” but:
The concern is that we have some assurance that the kinds of people, if you go
with this type of approach, actually have an intent to participate in public service,
and that they aren’t just using this as a vehicle to repay their loans. And whether
or not a three year limitation provides enough assurance that you get at least19
some benefit from having participated in this, I don’t know.
L. Bruce Laingen, executive director of the National Commission on the Public
Service, viewed the legislation as a step in “enriching the talent pool” of government
and as “a practical way to get young people started on their careers.” According to
Laingen, “entry level payment in Government is increasingly noncompetitive with
the private sector” and “combined with slow procedures by Government in hiring on
the one hand and students loans to repay on the other, often makes Government even
for those who actually seek Government service an unattractive career choice.”20
Another witness, Consumer Bankers Association special counsel John Dean,
noted the significant student loan indebtedness of students with advanced degrees:
18 Ibid., pp. 2-3.
19 Ibid., p. 5.
20 Ibid., p. 10.
An individual facing this repayment burden may and frequently does feel obliged
to seek employment with an employer able to provide the highest level of
compensation possible and, in most cases, that is not the Federal Government.
In order to encourage extended government service, Dean suggested that larger
repayments be made for longer years of service. His concerns about the legislation
related to the following:
!the need for close examination of existing program regulations to
assure that borrower records are appropriately documented,
especially for cases where limitations on the maximum repayment
amount provided under the program result in a residual amount still
owed by the individual student loan borrower;
!making sure that when a federal check comes in for a student loan
it is applied to the correct loan;
!ensuring that, if the check is for an amount that is less than the
amount due on the loan, a note in the computer file will indicate that
a second check will be coming, so that an insufficient notice
payment will not follow receipt of the first check from the federal
government;
!identifying who will be held accountable for delinquency on the
loans if there is a paperwork error and the federal government
payment arrives late; and
!the possibility of precipitating employee delinquency or default on
a loan if he or she no longer qualifies for loan repayment because of
performance reasons or separation from government service.21
House Bill Reported. On February 7, 1990, the House Committee on Post
Office and Civil Service reported the bill to the House, but no further action
occurred. As reported, H.R. 2544 differed from the Senate bill in several respects.
For example, it did not cover student loans made, insured, or guaranteed by state
governments. The bill also provided that “[i]n selecting employees to receive
[student loan repayment] benefits ... an agency shall, consistent with the merit system
principles set forth in paragraphs (1) and (2) of section 2301(b), take into
consideration the need to maintain a balanced workforce in which women and
members of racial and ethnic minority groups are appropriately represented in
Government service.” Additionally, H.R. 2544 authorized OPM to “prescribe
regulations containing such standards and requirements as [it] considers necessary
to provide for reasonable uniformity among programs.”22
21 Ibid., pp. 14-16.
22 U.S. Congress, House Committee on Post Office and Civil Service, Public Service
Education Assistance Act of 1990, report to accompany H.R. 2544, 101st Cong., 2nd sess.,
H.Rept. 101-402 (Washington: GPO, 1990), pp. 2-3. (Hereafter referred to as H.Rept. 101-
Discussing the need for the legislation, the committee cited the findings of the
Volcker Commission, as well as reports published by the Merit Systems Protection
Board in May 1988 and the Office of Personnel Management in June 1988, on the
federal government’s difficulties in recruiting and retaining highly qualified
professional, technical, or administrative personnel.23 According to these reports, pay
rates significantly less than those offered by the private sector, a negative image of
public service, and lack of information about careers in government were among the
reasons inhibiting the federal government from attracting and keeping skilled
individuals. The committee report stated that the “new authority is an attempt to
bolster efforts to recruit top-flight candidates for employment with the federal
government” and noted that “the repayment program would be used as a recruiting
tool to attract individuals with critical skills necessary for the agency.” It
acknowledged criticisms that these repayment provisions could “result in disparate
treatment of equally qualified candidates solely on the basis of their form of
indebtedness.” The report expressed the “committee’s opinion that remedies for an
otherwise gravely lacking Federal compensation system must be sought wherever the
Federal Government can exert unique pressure.”24
With regard to limitations on the size of the repayments, the committee stated
its intent to “strike a balance” between the “extremely high loan indebtedness” of
many college graduates and “the limited resources available to Federal agencies for
new initiatives in programs and employee benefits.” Further, the committee noted
that the loan repayment was “to apply to indebtedness outstanding at the time an
employee enter[ed] into an agreement.”25
CBO Cost Estimate. The Congressional Budget Office (CBO) estimated that
the cost of the student loan repayment program in 1991 would be between $2 and $3
million, with the potential to increase to $10 to $15 million by 1995. CBO also
estimated that administrative costs would total less than one million dollars. The cost
estimate assumed that “most agencies would agree to reimburse ... loan payments for26
at least five years.”
Views of the Departments of Education and Justice. The Department
of Education (DoE) and the Department of Justice (DoJ) submitted views to the
House Committee on Post Office and Civil Service opposing H.R. 2544’s provisions
to establish a student loan repayment program. DoE believed that the program
“would be extremely costly, with overly generous agency repayment amounts
permitted, and is unlikely to correlate to the recruitment needs of the Federal service
22 (...continued)
23 U.S. Merit Systems Protection Board, Office of Policy and Evaluation, Attracting Quality
Graduates to the Federal Government: A View of College Recruiting, May 1988; and The
Hudson Institute, Civil Service 2000, prepared for the U.S. Office of Personnel
Management, June 1988.
24 H.Rept. 101-402, pp. 5-7.
25 Ibid., p. 12.
26 Ibid., p. 15.
or alter any significant number of students’ decisions to enter the Federal service.”27
Additional concerns expressed by DoE were that the program would
set a dangerous precedent by allowing for the first time cancellation of
Guaranteed Student Loans (GSLs) in exchange for performance of a certain
activity. Introducing cancellation for one activity would almost certainly lead to
pressure for cancellation for many other “meritorious” activities.
Very probably be poorly correlated to recruitment needs [and be] unlikely to
affect many decisions on whether to enter the Federal service. Prior efforts to
attract recruits to certain professions such as teaching (through loan forgiveness
and similar programs) have not had a significant impact on students’ decisions
to enter the field.
Provide a potential windfall for some employees, particularly in light of the high
agency repayment amounts permitted.
Aggravate current retention problems if employees need only complete three
years of federal service to take advantage of the repayment program .... Some ...
may well work only long enough to earn the cancellation before moving
elsewhere. Other programs, such as the Perkins Loan Program in the Higher
Education Act of 1965 (20 U.S.C. §1001 et seq.) require five years of service in
certain teaching positions before the entire loan is canceled.
[By authorizing payments up to $6,000 per year, provide] a very generous yearly
“bonus” ... far in excess of the amounts generally available to a small number of
employees in the form of cash awards or merit pay bonuses for outstanding
service. Thus, employees who either have no student loans or who have already
repaid their loans would, in essence, be compensated at a lower rate than other
employees simply because they do not have a particular form of debt. This type
of inequity could have a demoralizing effect on the federal employees not
participating in the repayment program ... and create retention problems.... The
Federal government should not be in a position of “rewarding” students who
finance their education through Federal student loans, and penalizing students
who chose work or savings to finance their postsecondary education.
[Create a situation in which] it could be very difficult to regulate effectively the
very broad, subjective authority of an agency head to waive a right of recovery
against an employee if it would be against equity and good conscience, or against28
the public interest.
DoJ also declined to support student loan repayment. The agency’s concerns
were that the program would not “provide a reliable incentive for recruitment and
retention because its usefulness depends upon the nature of an individual’s
indebtedness and thus varies from candidate to candidate.”29 Additionally, Justice
believed that the program
27 Ibid., pp. 17-18.
28 Ibid., pp. 16-17.
29 Ibid., p. 19.
would require the Department to treat otherwise similarly situated candidates
different solely because of their indebtedness or the form of their indebtedness....
Students who worked to pay their tuition would not qualify for benefits nor
would those whose parents saved or borrowed to pay for the student’s education.
This disparate treatment of otherwise equally qualified candidates outweighs the30
minimal benefits to be gained by the student loan repayments.
Final Action. During House consideration of the National Defense
Authorization Act for FY1991 (H.R. 4739) on September 11, 1990, Representative
Gilman offered the text of H.R. 2544 as an amendment to the bill.31 He stated that
the provisions were “intended to be applied systemwide to all Federal agencies.” He
also noted that, as no new funds were being authorized, agencies would have to fund
the program from salary and expense accounts and “use these tools in a cost efficient
manner.” According to Representative Gilman, the Department of Defense “d[id] not
object” to the amendment and “considers it an important tool in enhancing their
ability to recruit and keep essential qualified personnel.” National Commission on
the Public Service executive director L. Bruce Laingen stated in a letter to
Representative Gilman, which was inserted into the Congressional Record, that the
provisions were “an important step forward in the larger challenge of ensuring that
the services of government in the years ahead are performed by personnel of the
highest competence.”32 The House agreed to the amendment by voice vote on
September 11, 1990. The President signed H.R. 4739 on November 5, 1990, and it
became P.L. 101-510. Section 1206(b) of the law provides the repayment authority.33
On June 22, 2000, OPM proposed regulations to implement the initial student
loan repayment program established by P.L. 101-510.34 OPM did not explain the 10-
year delay in issuing the regulations, but a Government Executive article on the
regulations suggested that efforts to reduce the federal workforce in the early and
mid-1990s created little demand in the agencies for the repayment authority.35 Lack
of funding for the program also may have contributed to the delay. OPM’s final
regulations became effective on April 12, 2001.36
30 Ibid.
31 The amendment was an amendment to an amendment that had been offered by Rep.
Mavroules.
32 Congressional Record, vol. 136, Sept. 11, 1990, pp. 23901-23902.
33 H.R. 4739 passed the House of Representatives (amended) on a 256-155 vote (No. 352)
on Sept. 19, 1990. On Sept. 25, 1990, the Senate struck all after the enacting clause and
substituted the language of S. 2884 as amended. The Senate then passed H.R. 4739 with an
amendment in lieu of S. 2884 by unanimous consent. The House agreed to the conference
report (H.Rept. 101-923) on a 271-156 vote (No. 517) on Oct. 24, 1990. The Senate agreed
to the conference report on an 80-17 vote (No. 320) on Oct. 26, 1990.
34 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
vol. 65, no. 121, June 22, 2000, pp. 38791-38794.
35 Brian Friel, “Student Loan Help on Hold,” Government Executive, Feb. 8, 2001, available
at [http://www.govexec.com], visited Apr. 5, 2007.
36 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
(continued...)
106th Congress: Amendments
Ten years after the original student loan repayment authority had been enacted
in P.L. 101-510, Senator Richard Durbin offered an amendment to the Floyd D.
Spence National Defense Authorization Act for FY2001 (S. 2549) to make changes
to the law. The amendment, No. 3480, provided for broader implementation of
student loan repayment programs. It extended eligibility for student loan repayments
to non-GS (including Foreign Service) federal employees and to employees in other
than professional, technical, or administrative positions,37 and expanded the types of
student loans under the Higher Education Act and the Public Health Service Act
eligible for repayment. The Senate agreed to the amendment by voice vote on June
20, 2000. In lieu of S. 2549, the Senate passed H.R. 4205, with an amendment.38 On
October 30, 2000, H.R. 4205 became P.L. 106-398. Section 1122 provides the
expanded repayment authority. Regulations to implement the broadened student loan
repayment program established by the law were proposed by OPM on March 16,
2001, and finalized on July 31, 2001. Those regulations became effective on August
the Congressional Budget Office, and U.S. Capitol Police
During its first session, the 107th Congress passed two separate pieces of
legislation to extend the student loan repayment program to specific legislative
branch entities. The FY2002 Legislative Branch Appropriations Act, P.L. 107-68,40
enacted on November 12, 2001, authorized Senate employing offices to establish
a program for Senate employees and authorized appropriations to fund the program.
The law also authorized CBO to institute a program for student loan forgiveness.
The FY2002 Department of Defense Appropriations Act, P.L. 107-117, enacted on
36 (...continued)
vol. 65, no. 8, Jan. 11, 2001, pp. 2790-2793. The regulations were to have become effective
on Feb. 12, 2001, but a 60-day moratorium on new regulations was imposed by President
George W. Bush. U.S. Office of Personnel Management, “Repayment of Student Loans:
Delay of Effective Date,” Federal Register, vol. 66, no. 26, Feb. 7, 2001, p. 9187.
37 P.L. 106-398; Oct. 30, 2000; 114 Stat. 1654A-316 to 1654A-317; 5 U.S.C. §5379.
38 On July 13, 2000, the Senate struck all after the enacting clause and substituted the
language of S. 2549, amended, into H.R. 4205. The Senate then passed H.R. 4205, with an
amendment, on a 97-3 vote (No. 179). The House of Representatives agreed to the
conference report (H.Rept. 106-945) on a 382-31 vote (No. 522) on Oct. 11, 2000. The
Senate agreed to the conference report on a 90-3 vote (No. 275) the next day.
39 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
vol. 66, no. 52, Mar. 16, 2001, pp. 15202-15203; U.S. Office of Personnel Management,
“Repayment of Student Loans,” Federal Register, vol. 66, no. 147, July 31, 2001, pp.
40 H.R. 2647, P.L. 107-68, Nov. 12, 2001, 115 Stat. 563-568 and 115 Stat. 577-578.
January 10, 2002,41 granted authority to the U.S. Capitol Police to offer a student
loan repayment program for recruitment and retention purposes.
The House of Representatives attempted to establish a repayment program for
House employees, but that effort failed. On July 30, 2001, Representative Barbara
Lee submitted an amendment to the FY2002 Legislative Branch Appropriations Bill,
H.R. 2647 to the House Committee on Rules. The amendment was similar to H.R.
2555, a bill Representative Lee had introduced previously to amend P.L. 101-510 by
including legislative branch employees in the federal agency student loan repayment
program. The rule (H.Res. 213) for H.R. 2647 did not make the amendment in order
for consideration on the House floor. On July 31, 2001, however, during floor
consideration of H.R. 2647, Representative James Moran stated that “a uniform
policy should be developed across the board,” and noted that the bill “calls for study
of the issue by the Committee on House Administration.” He further stated that
because the Senate-passed version of the bill would authorize the student loan
repayment benefit to all Senate employees, it was “essential that the Committee on
House Administration develop guidelines rapidly.”42 Nevertheless, the FY2002
Legislative Branch Appropriations bill did not provide for a loan repayment program
for House employees.
108th Congress: Further Extension to
House Employees and Others43
Early in the 108th Congress, the Senate and House passed an omnibus
appropriations bill, the Consolidated Appropriations Resolution, 2003, that provided
authority and appropriations at Section 105 to the House of Representatives for a
student loan repayment program. The bill was enacted as P.L. 108-7 on February 20,
41 H.R. 3338, P.L. 107-117, Jan. 10, 2002, 115 Stat. 2319-2320. U.S. Congress, Conference
Committees, Making Appropriations for the Department of Defense for the Fiscal Year
Ending September 30, 2002, and for Other Purposes, conference report to accompany H.R.thst
42 Rep. Moran, remarks in the House of Representatives, Congressional Record, vol. 147,
July 31, 2001, p. H4888.
43 Legislation to establish a pilot program to repay the student loans of federal employees
in national security positions in eight agencies passed the Senate in the 108th Congress and
was referred to the House Committee on Government Reform, but saw no further action.
Sen. Daniel Akaka, for himself and Sens. Durbin, George Allen, and George Voinovich,
introduced S. 589, the Homeland Security Federal Workforce Act, on March 11, 2003. The
bill was referred to the Senate Committee on Governmental Affairs, where it was marked
up and ordered to be reported by voice vote on June 17, 2003. S. 589 was reported to the
Senate on July 31, 2003 (S.Rept. 108-119). It passed the Senate with an amendment by
unanimous consent on November 5, 2003. Prior to passage, an amendment in the nature of
a substitute proposed by Sen. Bennett for Sen. Susan Collins was agreed to by unanimous
consent. The bill was referred to the House Subcommittee on Civil Service and Agency
Organization, on July 13, 2004, but saw no further action.
to establish a student loan repayment program as part of an educational and tuition
reimbursement assistance program for employee career development.44
Legislation (S. 926) to increase the annual and aggregate limitations on student
loan repayments was enacted as P.L. 108-123 on November 11, 2003.45 The law
amended 5 U.S.C. §5379(b)(2) and increased the amount of a student loan repayment
from $6,000 to $10,000 per year and from $40,000 to $60,000 in total for employees
in the executive branch, GAO, GPO, and the Library of Congress. CBO estimated
that implementing the legislation “would cost less than $500,000 a year, subject to
the availability of appropriated funds.”46 According to the Senate Governmental
Affairs Committee report that accompanied the bill, the amendments reflected “an
increase in annual college tuition costs since the enactment of the original statute in
1991.” It further stated that without them the tuition increases “would lessen the
competitive value of this recruitment and retention tool.”47
On October 28, 2003, the House of Representatives suspended the rules and
passed S. 926 by voice vote. During House consideration of the bill, Representative
Jo Ann Davis stated that the Senate bill, which was identical to the House version,
was taken up because it had already passed the Senate and would speed up approval
of the measure. Explaining the need for the legislation, she stated that “it is the
prospect of these daunting student loans, $50,000, $75,000, or even more than
$100,000, that can prevent public service-minded people from coming to work for
the government.” She added that “[s]tudent loan repayment is at the top of the list for
newly graduated students looking for jobs.”48 Representative Danny Davis noted that
the student loan repayment program “is generally underutilized due to lack of agency
funding caused by limited budgets” and that “without funding and without aggressive
use of this and similar programs to promote Federal civil service, the Federal
Government will be left behind in the competition for top talents.”49 Under S. 926,
agencies would continue to fund student loan repayments from their own budgets.
44 P.L. 108-7, Feb. 20, 2003, 117 Stat. 354 and 117 Stat. 358-359. The provisions originally
were included in H.R. 5121, Legislative Branch Appropriations Act, 2003.
45 S. 926, P.L. 108-123; Nov. 11, 2003; 117 Stat. 1345.
46 U.S. Congress, Senate Committee on Governmental Affairs, Federal Employee Student
Loan Assistance Act, report to accompany S. 926, 108th Cong., 1st sess., S.Rept. 108-109
(Washington: GPO, 2003), p. 3. (Hereafter referred to as S.Rept. 108-109.)
47 Ibid., p. 1. On April 28, 2003, Sen. Voinovich introduced S. 926, the Federal Employee
Student Loan Assistance Act, and it was referred to the Senate Committee on Governmental
Affairs. The bill was marked up and ordered to be reported by the committee en bloc with
other bills by voice vote on June 17, 2003. It was reported to the Senate (S.Rept. 108-109)
on July 21, 2003, and passed the Senate, without amendment, by unanimous consent on July
30, 2003. Rep. Jo Ann Davis introduced a companion bill, H.R. 3080, the Federal Employee
Student Loan Assistance Act, on September 11, 2003, and it was referred to the House
Committee on Government Reform.
48 Congressional Record, daily edition, vol. 149, Oct. 28, 2003, p. H9835.
49 Ibid., pp. H9835-H9836.
Section 1123 of P.L. 108-136, the National Defense Authorization Act for
FY2004 (H.R. 1588), enacted on November 24, 2003, amended 5 U.S.C.
§5379(b)(2)(A) to increase the amount of a student loan repayment from $6,000 to
$10,000 per year.50 The provision became effective on January 1, 2004.
OPM’s regulations to implement the higher annual and aggregate amounts for
repayments authorized in P.L. 108-123 and P.L. 108-136 were published on April 20,
Implementation in Legislative Branch Agencies. Student loan
repayment programs at selected legislative branch agencies were established by
different pieces of legislation in the 107th and the 108th Congresses; as a result, the
implementation of these programs is at various stages in these agencies. Legislators
believed that some uniform guidelines would assist the agencies as each agency
began writing regulations and service agreements. Accordingly, the conferees to the
FY2002 Legislative Branch appropriations bill (H.R. 2647, H.Rept. 107-259)52
directed the Legislative Branch Financial Managers Council (LBFMC) to “develop,
in consultation with all Legislative Branch entities, the controls and criteria that will
govern [student loan repayment] program implementation.” Specifically, the LBFMC
was “directed to perform a comparative analysis between entity implementing
regulations and governing controls and criteria and report the results of that analysis
to the House and Senate” appropriations subcommittees on the legislative branch by
March 1, 2002. The LBFMC consulted with each legislative branch entity beginning
in December 2001, completed a comparative analysis of entity implementing
regulations, and developed governing controls and criteria recommendations for the
student loan repayment programs in the legislative branch. On February 27, 2002,
the LBFMC reported the results of the analysis and recommendations to the House
50 117 Stat. 1637. H.R. 1588 was introduced by Rep. Duncan Hunter, by request, on April
3, 2003, and was referred to the House Committee on Armed Services. The committee
marked up the bill on May 9 and May 14, 2003. The bill was reported to the House,
amended (H.Rept. 108-106) on May 16, 2003. H.R. 1588 passed the House, amended, on
May 22, 2003, on a 361 to 68 (Roll No. 221) vote. On June 4, 2003, the Senate struck all
after the enacting clause and substituted the text of S. 1050 in H.R. 1588. The Senate then
passed H.R. 1588, amended, by voice vote the same day. On November 7, 2003, the House
agreed to the conference report (H.Rept. 108-354) accompanying H.R. 1588 on a 362-40,
447) vote on November 12, 2003. U.S. Congress, Conference Committees, 2003, National
Defense Authorization Act for Fiscal Year 2004, conference report to accompany H.R. 1588,thst
108 Cong., 1 sess., H.Rept. 108-354 (Washington: GPO, 2003), pp. 248, 762. The
provision was Section 1104 of the bill as reported and passed by the House and Section
51 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
vol. 69, no. 76, Apr. 20, 2004, p. 21039.
52 Established by charter in March 1996, the Council’s mission is to promote more effective
financial management of the legislative branch, and to ensure that efficient and cost-
effective financial systems are available to support decision making. The Council comprises
the financial managers of legislative branch entities (including the Architect of the Capitol,
the U.S. Capitol Police, CBO, GAO, the House of Representatives, the Library of Congress,
the Office of Compliance, and the Senate).
and Senate appropriations subcommittees on the legislative branch. In general, the
legislative branch agencies have followed the LBFMC recommended guidelines.
Executive Branch Law and
Implementing Regulations
Authority for the student loan repayment program is codified at 5 U.S.C. §5379.
The statute covers executive agencies, independent establishments, government
corporations under 31 U.S.C. Chapter 91, as well as GAO, GPO, and the Library of
Congress. Federal employees covered by the law are as follows:
!permanent employees;
!temporary employees who are serving on appointments which can
be converted to term or permanent appointments;
!term employees with at least three years left on their appointments;
and
!employees serving on excepted appointments which can be
converted to term, career, or career conditional appointments
(including, but not limited to, Career Intern or Presidential
Management Intern appointments).
Schedule C appointees — employees in confidential, policy-determining,
policy-making, or policy advocating positions — are not eligible for the repayments.
As amended by P.L. 108-123 and P.L. 108-136, an employee may currently
receive a repayment of up to $10,000 annually and $60,000 in the aggregate from an
agency.53 Regulations to implement the current repayment amount were published
in the Federal Register by OPM on April 20, 2004.54
Agencies may use the student loan repayment benefit in conjunction with other
recruitment and retention incentives available under Title 5 of the United States
Code. Student loan repayments are not subject to the Title 5 provision that limits the
aggregate amount of pay an employee can receive to Executive Level I, or $183,500
(as of January 2006),55 but it is unlikely that this would ever be an issue of concern.
53 P.L. 108-123 and P.L. 108-136. The previous limitations on repayments were $6,000 per
year and $40,000 in total.
54 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
vol. 69, no. 76, Apr. 20, 2004, p. 21039.
55 66 FR 39405. (Hereafter, citations to the Federal Register are noted as FR, preceded by
the volume and followed by the page.) When it published the final regulations that
implemented the amendments to the student loan repayment law, OPM stated that one
agency had suggested that those regulations address the aggregate limitation on pay. OPM
(continued...)
Service Agreement. An employee seeking student loan repayment must sign
a written agreement to work for the agency repaying the loan for at least three years.
The implementing regulations specify that the following language should be stated
in the service agreement: “A service agreement made under this part in no way
constitutes a right, promise, or entitlement for continued employment or
noncompetitive conversion to the competitive service.”56 Other employment
conditions the agency considers to be appropriate may be specified in the agreement.
These might include the employee’s position and the duties he or she is expected to
perform, work schedule, or level of performance.
Reimbursement Required. An employee who separates voluntarily from
the agency, does not maintain an acceptable level of performance,57 or violates any
of the conditions of the service agreement becomes ineligible to continue receiving
student loan repayment benefits. An employee who fails to complete the required
period of service must reimburse the agency for the total amount of any repayment
benefits received. This would occur if the employee were separated involuntarily for
misconduct or performance, or left the agency voluntarily. The agency must collect
through appropriate debt collection procedures any amount the employee fails to
reimburse. Reimbursement is not required of an employee who is involuntarily
separated for reasons other than misconduct or performance or who leaves the agency
voluntarily to enter into the service of another agency. The service agreement,
however, may specify reimbursement in this latter instance. An agency head may
waive, in whole or in part, a right of recovery of an employee’s debt if “recovery
would be against equity and good conscience or against the public interest.”58
Repayment Plan Features. OPM regulations require the head of an agency
to establish a student loan repayment plan before repaying any student loans. The
plan must include the following seven elements:
(1) The designation of officials with authority to review and approve offering
student loan repayment benefits;
(2) The situations when the loan repayment authority may be used;
(3) Criteria that must be met or considered in authorizing loan repayments,
including criteria for determining the size and timing of a payment [or
payments];
(4) Procedures for making loan repayments;
55 (...continued)
said that the issue was outside the scope of the regulations, but that it would amend its
questions and answers on student loan repayment to clarify that the aggregate limitation
does not apply to the repayments.
56 66 FR 2792; 5 C.F.R. 537.107. (Hereafter, citations to the Code of Federal Regulations
are designated by C.F.R. preceded by the title number and followed by the part designation.)
57 The most recent performance rating of record must be at least level 3 (“fully successful”)
for an employee whose performance appraisal is covered by 5 C.F.R. 430, subpart B.
58 66 FR 2792; 5 C.F.R. 537.109.
(5) A system for selecting employees to receive repayment benefits that ensures
fair and equitable treatment;
(6) Requirements for service agreements (including a basis for determining the
length of service to be required if greater than the statutory minimum), and
provisions for recovering any amount outstanding from an employee who fails
to complete the period of employment established under a service agreement and
for conditions when the agency decides to waive the employee’s obligation to
reimburse the agency for payments; and
(7) Documentation and record keeping requirements sufficient to allow59
reconstruction of the action taken in each case.
Criteria for Repayments. The OPM regulations also establish criteria for
loan repayments. The repayments “must be based on a written determination that,
in the absence of offering loan repayment benefits, the agency would encounter
difficulty either in filling the position with a highly qualified candidate, or retaining
a highly qualified employee in that position.” The written determination for
recruitment purposes must be made before the employee actually enters on duty in
the position for which he or she was recruited. For retention purposes, the written
determination must state “that the high or unique qualifications of the employee or
special need of the agency for the employee’s services makes it essential to retain the
employee, and that, in the absence of offering student loan repayment benefits, the
employee would be likely to leave for employment outside the Federal service.” The
determination “must be based on a written description of the extent to which the
employee’s departure would affect the agency’s ability to carry out an activity or60
perform a function that is deemed essential to the agency’s mission.”
In selecting employees to receive the loan repayment, “agencies must adhere to
merit system principles and take into consideration the need to maintain a balanced
workforce in which women and members of racial and ethnic minority groups are
appropriately represented in Government service.”61
Student Loans Covered. Eligible for repayment are student loans made,
insured, or guaranteed under parts B, D, or E of title IV of the Higher Education Act
of 1965; and health education assistance loans made or insured under part A of title
VII or part E of title VIII of the Public Health Service Act.62 According to OPM,
loans that qualify for repayment include the following:
Federal Family Education Loans (FFEL)
!Subsidized Federal Stafford Loans
!Unsubsidized Federal Stafford Loans
!Federal PLUS Loans
!Federal Consolidation Loans
59 66 FR 2791; 5 C.F.R. 537.103.
60 Ibid. 5 C.F.R. 537.105.
61 Ibid. Also specified in 5 U.S.C. §5379(e).
62 114 Stat. 1654A-316; 66 FR 39406.
!William D. Ford Direct Loan Program (Direct Loans)
!Direct Subsidized Stafford Loans
!Direct Unsubsidized Stafford Loans
!Direct PLUS Loans
!Direct Subsidized Consolidation Loans
!Direct Unsubsidized Consolidation Loans
!Federal Perkins Loan Program
!National Defense Student Loans (made before July 1, 1972)
!National Direct Student Loans (made between July 1, 1972 and July
!Perkins Loans (made after July 1, 1987)
Loans made or insured under the Public Health Service Act
!Loans for Disadvantaged Students (LDS)
!Primary Care Loans (PCL)
!Nursing Student Loans (NSL)
!Health Professions Student Loans (HPSL)
!Health Education Assistance Loans (HEAL)63
Tax Implications. The student loan repayment must be included in an
employee’s income for both income and employment tax purposes. OPM has posted
on its website a document prepared by the Internal Revenue Service that addresses
questions and answers on the tax liability of student loan repayments made by federal
entities. The document includes a discussion on agency reporting and withholding
requirements for tax purposes, and an explanation of how agencies should calculate64
and withhold employment taxes.
The following is an example of an employee’s tax liability if a federal agency
were to provide a student loan repayment in the amount of $10,000. For tax year
2007, a single employee with taxable income between $31,850 and $77,100 is
subject to a federal income tax rate of 25%. In addition to the income tax,
employment taxes (at a 7.65% rate for Social Security and Medicare) would be
collected on the repayment amount. Thus, a total of 32.65% in federal taxes would
have to be paid by an employee receiving repayment benefits under the program. On
a $10,000 repayment this amounts to $3,265. In addition, the $10,000 would be65
subject to any applicable state and local income taxes.
Legislation Introduced in the 110th Congress on Tax Implications.
A bill to exclude student loan repayments from gross income for the purposes of
63 U.S. Office of Personnel Management, Office of Compensation Administration, Student
Loan Repayment Program Questions and Answers, available at [http://www.opm.gov/oca/
pay/StudentLoan/HTML/QandAs.htm], visited Apr. 5, 2007.
64 U.S. Office of Personnel Management, Office of Compensation Administration, Student
Loan Repayment Program, Tax Liability Questions and Answers, available at
[http://www.opm.gov/oca/pay/StudentLoan/HTML/QandAsTax.htm], visited Apr. 5, 2007.
65 This example was provided to the authors by Gregg Esenwein, Specialist in Public
Finance, at CRS.
federal income tax is pending in the Senate.66 Senator George Voinovich, for himself
and Senators Daniel Akaka and Susan Collins, introduced S. 1047, Generating
Opportunity by Forgiving Educational Debt for Service Act of 2007, on March 29,
2007. The bill was referred to the Committee on Finance. In his statement upon
introducing the legislation, Senator Voinovich stated that it would “help Federal
agencies and the Armed Forces recruit talented individuals” and “the potential impact
... far outweighs its minimal cost.”67
S. 1047 would amend 26 U.S.C. §108(f) to exclude student loan repayments
from gross income for the purposes of federal income tax. The bill also would
amend 26 U.S.C. §3121(a) to exclude student loan repayments from the definition
of wages under the Internal Revenue Code and 42 U.S.C. §409(a) to exclude
repayments from the definition of wages under Social Security. The amendments
would apply to payments made in taxable years beginning on or after the act’s
enactment in taxable years ending after such date.
Reporting Requirement. OPM is required by law to report to Congress
annually on the implementation of student loan repayment programs in the agencies,
including the number and job classifications of federal employees receiving
repayments, and the cost of the repayments.68 The current statutory requirement is
for the report to include information on those agencies having student loan repayment
programs. Legislation (H.R. 1765, Section 3, 109th Congress)69 would have
amended current law to require that the OPM report also include information on
those agencies that have not implemented repayment programs.70
Legislation Introduced, But Not Enacted, in the 109th Congress to
Amend the Law. Senator Akaka, for himself and Senator Durbin, introduced S.
2450, the Homeland Security Education Act, on March 16, 2006. The bill was
referred to the Senate Committee on Health, Education, Labor, and Pensions, but saw
no further action. Section 11 of the legislation would have amended Title 5, United
States Code, by adding a new Section 5379a authorizing the Director of OPM to
establish and administer a pilot program under which the student loans of federal
employees possessing science, technology, engineering, mathematics, and foreign
language skills would have been repaid. The legislation provided that not less than
three but not more than five agencies could have set aside funds for a student loan
repayment program under 5 U.S.C. §5379 to repay any student loan previously taken
out by employees possessing such skills deemed critical to the agencies under their
66 Similar legislation was introduced in the 107th (S. 1817, H.R. 3893, and H.R. 4555), 108th
(S. 512 and H.R. 1056), and 109th (S. 1255 and H.R. 1765) Congresses, but was not enacted.
67 Statement of Senator George Voinovich, Congressional Record, daily edition, vol. 153,
March 29, 2007, p. S4180.
68 114 Stat. 1654A-316-1654A-317.
69 See the discussion of H.R. 1765 in the text under Legislation Pending in the 109th
Congress on Tax Implications.
70 The amendment would apply to reports submitted after the end of the three-month period
beginning on the act’s enactment date. The legislation does not specify what information
would be provided on agencies that have not implemented repayment programs.
human capital strategic plans.71 The repayments would have been direct payments
made on behalf of an employee. Agencies participating in the program would have
been required to set aside enough funds to repay the student loans of at least one-half
of the number of employees with the identified critical skills who are needed.
Loans Covered. Student loans eligible for repayment would have been the
same as those covered by current law — loans made, insured, or guaranteed under
parts B, D, or E of Title IV of the Higher Education Act of 1965; and health
education assistance loans made or insured under Part A of Title VII or Part E of
Title VIII of the Public Health Service Act.
Length of Program. The program would have remained in effect for five
years, beginning on the enactment date of the proposed Section 5379a. Employees
recruited under the program who were in compliance with its requirements would
have continued to receive benefits until the end of their service commitments.
Regulations. Not later than 60 days after enactment of the proposed Section
5379a and after consultations with the heads of agencies, the OPM Director would
have proposed regulations for the pilot program. The final regulations would have
been promulgated by the OPM Director not later than 180 days after the date on
which the comment period for the proposed regulations would have ended.
Reports. The OPM Director would have reported to the appropriate
committees of Congress on the program’s implementation not later than 180 days
after enactment of the proposed Section 5379a. OPM’s annual report on the student
loan repayment program under 5 U.S.C. §5379 would have included information on
the status of the Section 5379a program, including a determination of its impact in
recruiting and retaining employees possessing the identified critical skills and an
assessment of whether it should be expanded to other agencies or to individuals
possessing other critical skills. Agency heads would have provided any necessary
information to OPM.
Authorization of Appropriations. Such sums as may be necessary to carry
out the proposed Section 5379a would have been authorized to be appropriated to
enable the federal government to recruit and retain employees with the identified
critical skills.
Proposed Changes to the Regulations. OPM published proposed
regulations to revise the rules governing student loan repayments in the Federal72
Register on January 9, 2007. Among the changes under consideration are the
following:
71 “Agency” would mean any agency that, based on its human capital strategic plan, has a
shortfall in the number of individuals possessing critical science, technology, engineering,
mathematics, and foreign language skills. “Human capital strategic plan” would mean an
agency’s strategic plan under 5 U.S.C. §306.
72 U.S. Office of Personnel Management, “Repayment of Student Loans,” Federal Register,
vol. 72, no. 5, Jan. 9, 2007, pp. 914-918.
!agencies would need to document just the actions taken in approving
a student loan repayment;
!student loan repayments could not be used “to recruit an individual
from outside the agency who is currently employed in the Federal
service”;
!a job candidate who will be receiving a student loan repayment
could sign the service agreement before he or she begins serving in
the position;
!agency plans for student loan repayments could specify “that only
student loans made within a certain time-frame are eligible for
repaym ent”;
!the full gross amount of the repayment (before taxes) would “count
toward the benefit cap”;
!the service agreement could address the possibility that it could be
modified to provide additional repayments because of contingencies
or other conditions that would be stated in the agreement;
!by mutual agreement between the agency and the employee, a
service agreement could be modified to provide additional
repayments for additional service, thereby removing the need for a
new service agreement;
!periods during which an employee is “not in a pay status would not
count toward completion of the required service period”;
!service agreements would include a provision stating whether an
employee would need to repay a student loan repayment if he or she
transferred to a different agency during the service period;
!service agreements would have to expressly state that a violation of
a condition would result in the employee’s loss of eligibility for a
repayment;
!when a service agreement is modified to provide additional
repayments for additional service, reimbursement, if the employee
failed to complete the additional service period, would cover just the
repayments received during that additional period;
!agencies would have to retain records of student loan repayments for
at least three years after the employee’s required service period ends;
and
!agencies would be required to report to OPM by March 31of each
year on student loan repayments made during the previous calendar
(rather than fiscal) year.73
Student Loan Repayments in the Executive Branch
Executive branch agencies have considerable flexibility to implement student
loan repayment programs. Two sample student loan repayment plans have been74
published by OPM as guidance to the agencies. OPM also includes a summary of
agency best practices and lessons learned on its Internet website.75 Among the best
practices listed are developing an online application system, using standard
application and justification forms, verifying loan information, confirming that
lenders are properly crediting payments, and developing internal controls.
In May 2006, OPM submitted its report to Congress on the FY2005 student loan
repayments.76 The OPM document is based on reports from the individual agencies
on their repayment programs. (Given that the individual agency reports are not
publicly available, CRS is unable to independently evaluate agency results.)
According to OPM, 28 executive branch agencies made repayments to 4,171
employees at a total cost of $26,663,897 in FY2005. This compares with 26
executive branch agencies making repayments to 2,680 employees at a total cost of
$15,028,432 in FY2004. From FY2004 to FY2005, the number of recipients
increased by 55.6% and the cost of repayments increased by 77.4% in the executive
branch. With the addition of the Departments of Commerce and Homeland Security
in FY2005, all 15 cabinet agencies have now implemented repayment programs. The
cabinet agencies made 3,504 repayments in FY2005 and the non-cabinet agencies
made 667 repayments. The average payment was $6,009 (cabinet agencies) and
$8,405 (non-cabinet agencies).
As shown in Figures 1 and 2, the number of employees receiving student loan
repayments and the cost of the repayments in the executive branch have grown
significantly. For FY2001, OPM reported that one student loan repayment had been
made; the Department of Health and Human Services made a repayment of $6,000
for one employee.77 In FY2002, 15 executive branch agencies made repayments to
73 Ibid., pp. 914-915.
74 Available at [http://www.opm.gov/oca/pay/StudentLoan], visited Apr. 5, 2007.
75 Available at [http://www.opm.gov/oca/pay/studentloan/html/bestpractices.asp], visited
Apr. 5, 2007.
76 U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal
Year 2005 Report to the Congress, May 2006, available at [http://www.opm.gov/oca/
pay/StudentLoan], visited Apr. 5, 2007. (Hereafter referred to as FY2005 Repayment
Report.) The OPM report includes GAO and GPO, but the results for these two agencies are
not included in this discussion. See the Legislative Branch section in the text for
information on GAO and GPO.
77 Letter to Rep. Hastert, Speaker of the House of Representatives, from Kay Coles James,
Director of the Office of Personnel Management, Mar. 29, 2002.
agencies made repayments to 1,802 employees at a total cost of $7,984,207.78 Table
1 in the Appendix provides data on repayments in executive and legislative branch
agencies. Table 2 lists the number of recipients and the cost of repayments for each
of the executive branch agencies for FY2002, FY2003, FY2004, and FY2005.
Figure 1. Student Loan Repayments
30, 000, 000
25, 000, 000
20, 000, 000
rs
15, 000, 000lla
Do
10, 000, 000
5, 000, 000
0
F Y 20 01 F Y 200 2 F Y 2003 F Y 2004 F Y 2005
78 U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal
Year 2002 Report to the Congress, June 2003. U.S. Office of Personnel Management,
Federal Student Loan Repayment Program Fiscal Year 2003 Report to the Congress, May
2004. (Hereafter referred to as FY2003 Repayment Report.) Available on the OPM website
at [http://www.opm.gov/oca/pay/StudentLoan], visited Apr. 5, 2007.
Figure 2. Student Loan Recipients
5, 0 00
4, 0 00
3, 0 00er
b
m
2, 0 00Nu
1, 0 00
0
F Y 2001 F Y 2002 F Y 2003 F Y 2004 F Y 2005
The top four agencies in terms of the number of employees receiving
repayments in FY2005 were the Department of Justice (1,092 employees, up from
up from 702 in FY2004 and 469 in FY2003); the Department of State (809
employees, up from 734 in FY2004 and 660 in FY2003); and the Securities and
Exchange Commission (414 employees, up from 384 in FY2004 and 257 in
FY2003).79 Of the four agencies, the Department of Justice, at 230%, had the
greatest increase in the number of recipients from FY2004 to FY2005, followed by
the Departments of Defense (53.4%) and State (10.2%) and the Securities and
Exchange Commission (7.8%).
Other executive branch agencies with more than 50 employees receiving
repayments in FY2005 were the Department of Housing and Urban Development
(180 employees, up from 81 in FY2004), the Federal Energy Regulatory Commission
(87 employees, up from 78 in FY2004), the Department of Veterans Affairs (82
employees, up from 53 in FY2004), and the Department of Health and Human
Services (51 employees, down from 55 in FY2004). Among these agencies, the
Departments of Housing and Urban Development, at 122.2%, and Veterans Affairs,
at 54.7%, had the greatest increase in the number of recipients from FY2004 to
FY2005. Eight agencies were repaying student loans for under 10 employees each.80
79 For FY2002, OPM’s report to Congress showed that the Department of State had 407
employees receiving student loan repayments, the Department of Defense had 6 employees,
the Securities and Exchange Commission did not have any employees, the Department of
Justice had 1 employee, and GAO had 169 employees receiving student loan repayments.
80 The agencies are the Export-Import Bank (nine employees), the General Services
Administration (seven), the National Archives and Records Administration (six), the
(continued...)
The Departments of Justice, Defense, and State, and the Securities and
Exchange Commission also are the top four agencies in terms of the cost of
repayments. For FY2005, these costs (rounded) were $10.064 million (Justice),
$4.818 million (Defense), $3.860 million (State), and $3.690 million (Securities and
Exchange Commission).81 From FY2004 to FY2005, the cost of repayments
increased 424.3% at Justice, 56.5% at Defense, 6.9% at State, and 12% at the
Securities and Exchange Commission.
According to OPM, some 21% of recipients work as attorneys or criminal
investigators.82 The OPM report also provides information on the occupations of the
recipients at the agencies with the largest participation in the student loan repayment
program as follows.
!At the Department of Justice, the majority of repayments were
provided to special agents (424), intelligence analysts (182), trial
attorneys (84), investigative specialists (83), and support service
clerks/technicians (55). The special agents, intelligence analysts,
and investigative specialists are among the 988 FBI employees
receiving repayments. FBI recipients represent 90.5% of the
department’s total of 1,092 recipients.
!At the Department of Defense, employees in some 105 different
occupations received repayments, but most of them were provided
to mechanical engineers (135), contract specialists (70), nuclear
engineers (69), information technology specialists (65), and
electrical and electronics engineers (53 each).
!At the Department of State, 599 recipients were members of the
Foreign Service (up from 547 in FY2004 and 472 in FY2003) and
210 recipients were General Schedule (GS) civil service employees
(up from 187 in FY2004 and 188 in FY2003). Employees in some
44 different occupations received repayments, but the greatest
number of recipients were in the Foreign Service positions of
Political Affairs Officer (121), Economics Officer (104), Public
Diplomacy Officer (97), Administrative Management (79), and
Consular Officer (64). As for the GS positions, most of the
80 (...continued)
Defense Nuclear Facilities Safety Board, the National Mediation Board and the Office of
Personnel Management (four each), the Department of Commerce (two), and the Inter-
American Foundation (one). (FY2005 Repayment Report.)
81 FY2005 Repayment Report, pp. 1-3, 6-8, 12. The Department of Justice reported costs
of $4,000 in FY2002; $688,149 in FY2003; and $1,919,412 in FY2004. The Department
of Defense reported costs of $11,839 in FY2002; $1,309,247 in FY2003; and $3,079,228
in FY2004. The Department of State reported costs of $2 million in FY2002; $3,234,602
in FY2003; and $3,610,773 in FY2004. The Securities and Exchange Commission reported
no repayments in FY2002 and costs of $1,462,450 in FY2003 and $3,293,727 in FY2004.
82 FY2005 Repayment Report, p. 5.
recipients were in general management or passport/visa examiners
(38 each) and foreign affairs officers (34).
!At the Securities and Exchange Commission, repayments were used
primarily to recruit and retain attorney-advisers (242), staff
accountants (78), and securities compliance examiners (48).
Approximately 77% of the repayments made by the SEC were at the
annual maximum amount of $10,000.83
Of those executive branch agencies which have not made student loan
repayments, five reported that they have established a repayment plan and seven said
they are in the process of developing such a plan. Agencies not offering repayments
reported that among their reasons for not doing so are that higher-graded specialist
positions are typically filled with individuals whose student loan debts have been
paid off, recruitment or retention is not problematic, and hiring targets can be met.84
Effectiveness of Student Loan Repayments. As in its earlier reports,
OPM asked agencies about the effect of student loan repayments on recruitment and
retention. “Very positive comments” were provided by the agencies according to
OPM and the responses of 12 agencies were summarized in its FY2005 report.
Several of the responses were general statements, not supported by any evidence, that
repayments: create “good employee morale,” are “a useful tool in targeting difficult-
to-fill occupations,” “provide stability in the workforce,” and “reinforced employees’
belief they made the correct career choice.”85 Other responses addressed the specific
use of repayment programs, including these:
The Department of the Interior reported its program has been particularly
important to its bureaus for attracting competent employees in the fields of
engineering, environmental science, telecommunications, and financial analysis
... helpful in attracting highly-skilled employees to assist in the recovery and
clean-up of damage caused by the devastating hurricanes ... during FY2005.
The Department of Labor reported its ... program enabled its Office of Inspector
General to retain valuable employees in jobs with high turnover rates.
The National Aeronautics and Space Administration (NASA) uses its ... program
as a tool for recruiting highly skilled graduates from undergraduate and graduate
school programs ... [and] targets benefits to individuals participating in ... the
Presidential Management Fellows Program, the Federal Career Intern Program,86
and the National Security Education Program.
When asked by OPM in 2004 “if using student loan repayment had improved
recruitment and retention efforts,” 21 of the 27 agencies responding to the question
reported “a positive impact” while four agencies “gave neutral responses, mostly
83 Ibid., pp. 6-7, and Attachment 2, pp. 1-3, 6-7, 8, 12.
84 Ibid., pp. 4-5, 12.
85 Ibid., pp. 8-9.
86 Ibid.
stating it was too early to determine the effectiveness of the program.”87 DOD
provided an example to OPM of results in these areas. During the previous two
years, one DOD component had recruited 335 college graduates in various career
fields, thereby enabling the component to meet its recruitment goals in the scientist,
engineer, and information technology fields. As for retention, a DOD component
reported only five separations out of 173 program participants.
Five agencies reported to OPM that they were using student loan repayments to
recruit Presidential Management Fellows (PMFs) or federal interns. For example,
At the Department of Education, student loan repayment contributed to the
successful recruitment of eight highly skilled PMFs during FY2004 ... the
Department of Energy reported that it was able to hire four high caliber
Technical Interns that it probably would not have been able to hire in the absence
of student loan repayment. After recruiting these individuals using the program,
the Department ... has had success in retaining these employees by converting88
them to permanent positions.
OPM’s FY2003 report noted: “The vast majority of the responding agencies
stated that the use of the program had assisted them in recruiting and retaining highly
qualified personnel.”89 Comments from agencies using the program for recruitment
included statements that the repayments “allowed them to remain competitive with
the private sector in recruiting top notch employees,” heightened interest during
recruiting at college campuses, and aided workforce diversity. Agencies using the
program for retention said that the repayments reduced attrition among recent new
hires, permitted the filling of a position requiring a particular competency, and
positively affected the morale of employees, among other results.90
The majority of agencies told OPM in FY2004 that they had not established
specific metrics to measure the effectiveness of student loan repayments as a
recruitment and retention tool. Five agencies, however, reported that they had
established metrics, three agencies were working to do so, and two agencies were
using metrics already available. Another agency, HUD, was identifying baseline
metrics for its repayment program on employee satisfaction, participant versus non-
participant retention rates, and service agreement statistics.
Administration. OPM’s FY2005 report notes “the considerable
administrative burden” reported by agencies who are implementing and
administering repayment programs. “[W]orking with student loan lenders to verify
an employee’s loan information and ensuring loan payments are credited properly”
is the most common difficulty. According to the agencies, such administrative tasks
87 U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal
Year 2004 Report to the Congress, April 2005, p. 8. (Hereafter referred to as FY2004
Repayment Report.)
88 Ibid., p. 9.
89 FY2003 Repayment Report, p. 6.
90 Ibid.
“can place heavy demands on staff resources.”91 Among administrative practices
reported to OPM, the Department of Defense delegates approval of repayments “to
the lowest practical management level,” and the State Department provided 89% of
recipients with a lump sum repayment of $4,600 in FY2005.92
Some agencies administer funding of the repayment programs centrally, while
other agencies delegate authority to component agencies or organizations, and still
others apply a case-by-case approach. OPM’s FY2004 report provided examples of
each approach as follows.
HUD centrally allocates funds for repayments and offers them to all qualifying
employees. The State Department’s repayment program is both centrally funded and
administered. Repayment decisions are almost entirely based on the recruitment
needs for specific posts or positions. An individual’s eligibility for a repayment is
determined by using six recruitment and retention difficulty factors for Civil Service
employees and 11 factors for Foreign Service employees. The repayment amounts
provided depend on annual funding and the number of employees eligible.
As for delegated authority, the Federal Energy Regulatory Commission allocates
salary funds to each of its program offices based on their full-time employment
totals; each office then determines, by managing-to-budget, the amount of
repayments. At the Department of the Treasury, several program offices have
reserved special funds for incentives, such as student loan repayments, for critical
positions requiring unique skills. DOD applies established criteria to justify and
budget for repayments that meet specific recruitment and retention needs.
On a case-by-case basis, a committee of three senior managers at the Export-
Import Bank reviews each request for student loan repayment against factors such as
difficulty recruiting or retaining highly or uniquely qualified individuals, availability
of funds, the employee’s performance, and the availability of other tools for
recruitment or retention.93
OPM stated that the “vast majority” of agencies reported in FY2003 that
budgeting decisions for student loan repayments were delegated to their component
organizations. Some agencies said that they “manage-to-budget” according to
available funding. Another agency reported that limited funds dictate that
repayments be justified against other types of incentives. OPM stated that it would
continue to assist agencies in establishing budget plans for loan repayments.94
Several agencies not currently using student loan repayments noted that “lack of
funding for the program or general budgetary constraints” was the reason.95
91 FY2005 Repayment Report, pp. 11-12.
92 Ibid., p. 6.
93 The information in the preceding four paragraphs is taken from the FY2004 Repayment
Report at pp. 8-12.
94 FY2003 Repayment Report, p. 7.
95 Ibid.
Barriers. According to OPM, the three primary barriers to using student loan
repayments continue to be difficulty in funding the program, the tax liability of the
repayment, and the requirement of a three-year service agreement in return for a
repayment.96 “Fiscal constraints” were reported by 18 of 22 agencies who responded
to OPM’s question on impediments to the use of student loan repayments in FY2005.
Eight of the 18 said that lack of funding precluded making any repayments.97 The
FY2002 OPM report on the repayment program stated that several agencies
recommended that tax liability on repayments be eliminated and that the three-year98
service requirement be reduced. In its FY2005 report, OPM notes the views of one
agency that the “service obligation is overly burdensome to employees, considering
no pro rata credit is given (i.e., the penalty for failing to complete the service
agreement is full reimbursement to the paying agency).”99 Legislation would be
required to make the changes on tax liability and service required. H.R. 1765 and S.
(See the discussion under “Tax Implications,” above.)
Publicity. The agencies reported using various means to publicize their
repayment programs in FY2003. When the benefit is used for recruitment purposes,
“career fairs, website announcements, college placement office notices, college
recruiting trips, pamphlets and brochures, and job announcements” are used to
announce the availability of the benefit. “New employee orientation, agency intranet,
employee newsletters, employee guides, supervisor guides, briefings to managers,
supervisory training courses, email announcements, and telegrams to offices abroad”
are among the methods used to publicize the availability of repayments for retention
purposes. 100
The FY2004 report notes that OPM hosted a focus group on student loan
repayments in September 2004, and the FY2005 report states that two interagency
forums were conducted in August and December 2005. Agencies exchanged
information about the implementation of their repayment programs at both events.
An interagency working group and an e-mail list server were established in 2005 to
foster such information sharing; the working group has met several times, most
recently on May 23, 2006. OPM anticipates that the increased use of student loan
repayments will continue in FY2006.101
OPM’s Administrative Role. In a July 22, 2005, report on the student loan
repayment program, GAO suggested that OPM and the Chief Human Capital Officers
Council could improve the efficiency, administration, and evaluation of the program
by
96 FY2004 Repayment Report, p. 12, and FY2005 Repayment Report, p. 11.
97 FY2005 Repayment Report, p. 11.
98 FY2002 Repayment Report, p. 7.
99 FY2005 Repayment Report, p. 11.
100 FY2003 Repayment Report, p. 6.
101 FY2004 Repayment Report, pp. 12-13, and FY2005 Repayment Report, pp. 12-13.
working with the agencies, [to] determine where program streamlining and
consolidation of agencies’ administrative tasks are most feasible and appropriate,
and design ways to implement these program improvements, especially those that
could be implemented governmentwide and the most cost-effective ways to
implement them. Examples of program improvements ... include creating a
central database of student loan lender information and establishing a shared
service center arrangement for student loan repayments.
Continu[ing] and expand[ing] on its efforts to provide agencies assistance and
to help facilitate coordination and sharing of leading practices ... .
Help[ing] agencies determine ways in which they can monitor long-term program
effects on their recruitment and retention needs, such as determining data to
collect and use as indicators of effects. This ... could provide a consistent set of
governmentwide indicators that would allow OPM to assess, and report to102
Congress on, the program’s overall results achieved.
OPM concurred with GAO’s recommendations and addressed the third
suggestion, related to data requirements and indicators, as part of its comments on
a draft of the report. The Enterprise Human Resources Integration (EHRI) data
warehouse, with more than 400 human resources, training, and payroll data elements,
will provide OPM with “a greatly improved ability to track and measure the success”
of the student loan repayment program by facilitating the establishment of data
requirements and the creation of a baseline, according to the agency. The HR Line
of Business initiative, under which multiple agencies are served by a few providers,
may allow for consolidation and automation of the repayment program in a cost-
effective way.103
Managers responsible for administering student loan repayment programs in the
executive branch discussed the GAO recommendations at two forums hosted by
OPM on August 3, 2005, and December 14, 2005. An issue reportedly examined at
the earlier forum focused on the responsibility of employees to have their student
loan papers in order.104 Following the August meeting, OPM encouraged
departments and agencies to “develop a budget plan for using recruitment and
retention incentives, including student loan repayments.”105 In a November 22, 2005,
letter to the Chief Human Capital Officers, OPM Director Linda Springer requested
that departments and agencies submit FY2005 data to OPM for the annual report on
student loan repayments and identify ways OPM could assist them with their
programs. She also encouraged them to share information on “best practices, lessons
102 U.S. Government Accountability Office, Federal Student Loan Repayment Program;
OPM Could Build on Its Efforts to Help Agencies Administer the Program and Measure
Results, GAO-05-762 (Washington: July 2005).
103 Ibid., pp. 38-39.
104 Karen Rutzick, “Agencies Seek to Iron Out Student Loan Repayment Details,”
Government Executive, Aug. 3, 2005.
105 U.S. Office of Personnel Management, OPM Encourages Agencies to Use Federal
Student Loan Repayment Program as Hiring Incentive and Retention Tool, Aug. 8, 2005.
learned, program effectiveness, metrics used to measure program success,
establishing a business case, problem areas, or other relevant details.”106
Student Loan Repayments in the Legislative Branch
There is considerable interest in student loan repayment in the legislative
branch, but no single policy for, or approach to, repayments currently applies evenly
across the entire legislative branch. The 1990 student loan repayment statute
(P.L.101-510) provided authority to GAO, GPO, and the Library of Congress to
establish student loan repayment programs. The FY2002 Legislative Branch
Appropriations Act (P.L. 107-68, H.R. 2647) provided the Senate and CBO with
authority to establish student loan repayment programs. The FY2002 Department of
Defense Appropriations Act (P.L. 107-117, H.R. 3338) extended similar authority to
the U.S. Capitol Police.
As noted earlier, the House tried unsuccessfully in the 107th Congress to
establishment a repayment program for its employees. A House bill (H.R. 2555),
referred to two House committees, proposed that a student loan repayment program
be authorized for the entire legislative branch. No further action was taken on this
bill. Early in the 108th Congress, however, Congress passed legislation authorizing
a program for House employees under P.L. 108-7, the Consolidated Appropriations
Resolution, 2003.
Conferees to the FY2002 Legislative Branch Appropriations bill107 directed the108
Legislative Branch Financial Managers Council (LBFMC) to “develop, in
consultation with all Legislative Branch entities the controls and criteria that will
govern [student loan repayment] program implementation.” The LBFMC was
directed to perform a comparative analysis between entity implementing regulations
and governing controls and criteria. The LBFMC consulted with each legislative
branch entity, completed a comparative analysis, and developed governing controls
and criteria recommendations for the repayment programs in the legislative branch.
The LBFMC reported the results of the analysis and recommendations to the House
and Senate appropriations subcommittees on the legislative branch on February 27,
designation of authorizing officials; service agreement criteria and duration; amount
and size of repayments; eligibility for repayments; eligible loans; repayment
exceptions and waivers; records and reports; and review of the program. The
106 U.S. Office of Personnel Management, Memorandum for Chief Human Capital Officers,
From Linda M. Springer, Director, Fiscal Year 2005 Student Loan Repayment Report, Nov.
107 H.R. 2647, H.Rept. 107-259.
108 Established by charter in March 1996, the Council’s mission is to promote more effective
financial management of the legislative branch, and works to ensure that efficient and cost-
effective financial systems are available to support decision making. The Council comprises
the financial managers of legislative branch entities (including the Architect of the Capitol,
the U.S. Capitol Police, CBO, GAO, the House of Representatives, the Library of Congress,
the Office of Compliance, and the Senate).
recommendations would provide for consistent application of the program, yet at the
same time permit some flexibility. For instance, the duration of the service
agreement would necessarily be different for the House and the Senate due to the
congressional election cycles. In general, the legislative branch agencies have
modeled their programs on the recommended guidelines.
Seeking to be competitive with other employers, Congress and several
legislative branch entities have established or continue to consider the loan
repayment programs as a possible tool to recruit highly qualified and talented
individuals, as part of benefits packages.109
Service agreements in the legislative branch agencies vary from one to three
years. For the House and Senate, the requirement for a shorter service agreement
than the executive branch (one-year agreement) is attributed to the impact that
election cycles and possible changes in Congress’ majority/minority composition
may have on the individual Members’ offices, committees, and administrative
support offices.
Table 1 includes data on repayment programs in the legislative branch for
FY2004.
Need for Congressional Program. Some Members in both the Senate and
the House, concerned about high turnover and “brain drain” in their personal and
committee offices, have expressed varying degrees of interest in and support for
student loan repayment programs. Congressional staff, on average, tend to be
younger than other federal employees, and many are recent college graduates carrying
significant student loan debt. According to the 2001 Senate Staff Employment Study,
conducted by the Congressional Management Foundation (CMF),110 in the offices
that responded, about 86% of Senate staff held at least a bachelor’s degree and about
in the offices that responded, 70% of House staff held a minimum of a bachelor’s
degree and 17% held advanced degrees.112
109 Legislative branch support agencies also have offered the flexibility (or are seeking
authority to offer greater flexibility) to establish selected family-friendly policies such as
flexitime, child care, and telework, as well as the promise of professional training and
development, upward mobility, and recruitment bonuses.
110 Established in 1977 by former congressional staff to help improve congressional office
management practices, the Congressional Management Foundation is a nonprofit,
nonpartisan organization. The studies of the Senate and House apply only to congressional
staff in personal offices, not to leadership or committee staff.
111 Sheree L. Beverly, 2001 Senate Staff Employment Study (Washington: Congressional
Management Foundation, 2002). This study was based on 62 Senate offices responding to
the CMF questionnaire. (Hereafter referred to as 2001 Senate Staff Employment Study.)
This is the most recent report available.
112 CMF produced the study, 2004 House Staff Employment Study, for the Chief
Administrative Officer of the House of Representatives. Questionnaires were sent to 440
House personal offices, and the study was based on the responses of 212 House offices.
(continued...)
Proponents of the repayment program want the same tools as other federal
employers to attract and retain high caliber individuals. Others do not see the
necessity for a student loan forgiveness program as a recruitment incentive, however,
because they find no lack of highly qualified applicants for congressional jobs.
Working for a congressional office or committee is viewed as highly desirable, and
these staff positions have a certain cachet that, arguably, makes them at least as
desirable as other federal jobs.113
Congress watchers observe that congressional staff tenure is relatively short
because congressional salaries cannot compete with those in the private sector, the
hours are long, and the workload is heavy. Even under such conditions, thousands
of highly qualified individuals flock to Capitol Hill for the opportunity to work for
a Member of Congress or congressional committee, to have input into public policy,
and to play a role in shaping the nation’s laws. Some observers maintain that a high
percentage of staff never intend to stay long, and view the Hill experience as a
launching pad from which to reach other career goals.114
On the other hand, in the view of many, while recruitment of congressional staff
is not a problem, retention is. According to the CMF 2001 Senate study, 50% of
Senate staff had less than one year of experience in their current positions, including
52% of communication directors, 44% of legislative assistants, 73% of legislative
correspondents, 50% of legislative directors, and 34% of chiefs of staff.115 Results
of the CMF 2004 House study indicated that over 60% of House staff have two or
fewer years experience in their current positions, including 39% of chiefs of staff,
64% of legislative directors, and 66% of press secretaries.116 Turnover is higher for
entry-level positions.
High staff turnover not only affects an individual Member’s office or a
committee on which the Member serves, but also is a qualitative and quantitative loss
to Congress as an institution. The potential disruption to the smooth operations of
a congressional office or committee, and the time needed to recruit, interview, hire,
and train new staff is a cost that has not been precisely calculated. This concern has
led the Senate and the House to establish student loan repayment programs, which
are detailed below.
Senate. Senate employing offices have the authority to establish a student loan
repayment program under the FY2002 Legislative Branch Appropriations Act (P.L.
112 (...continued)
(Hereafter referred to as 2004 House Staff Employment Study.) See p. 85 for education
statistics.
113 Congressional Quarterly, Inc., Guide to Congress, 5th ed., vol. 1 (Washington: CQ Press),
p. 581.
114 Roger H. Davidson and Walter J. Oleszek, Congress and Its Members, 9th ed.
(Washington: CQ Press), p. 219.
115 2001 Senate Staff Employment Study.
116 2004 House Staff Employment Study, p. 82.
Senate employing office, at his or her discretion, to establish a program under which
the office may agree to repay student loan debt by direct payments on behalf of the
Senate employee.
Under P.L. 107-68, the authorized appropriation for the program for the
personal office of a Senator is to equal 2% of the total sum appropriated for
administrative and clerical salaries. The amount for all other employing offices
(committee, leadership, and administrative) is 2% of the total sums appropriated for
the fiscal year for the salaries of those offices. For Senate committees, the funds are
to be apportioned between the majority and minority staff. The Secretary of the
Senate established a central account specifically for the program from which
repayments are made available, and within that account there are sub-accounts for
each employing office from which the student loan repayments are to be made. The
authorization applies to FY2002 and each fiscal year thereafter, and is subject to
annual appropriations.
The Senate began implementation of student loan repayments in mid-March
2002. A minimum one-year service agreement is required, with the possibility of
additional one-year agreements.117 The monthly maximum is $500 ($6,000 per year)
over a 12-month period with a total limit of $40,000. There are no plans at this time
to increase the monthly or aggregate amounts permitted for repayments to the levels
authorized for executive branch employees ($10,000 per year, $60,000 aggregate).
The program has components similar to those provided for the executive branch,
including the requirement that an employee must repay the benefit if the employee
does not fulfill the terms of the service agreement. The benefit is not an entitlement
or a guarantee of continued employment. The repayment may be made on current
and outstanding specified loans only, and the amounts are in addition to basic pay
and subject to taxes. The types of eligible loans are the same as those approved for
the executive branch.
The Secretary of the Senate has provided offices with guidance on the steps to
implement the student loan program, and has prepared a standard service agreement
for the use of employing offices. Written service agreements must be signed and
submitted to the Senate Disbursing Office, which will make the repayments directly
to the lender.
At the April 13, 2005, Senate Appropriations Subcommittee on Legislative
Branch hearing on the FY2006 appropriations bill, the Secretary of the Senate
reported that a survey on the student loan program was conducted about a year ago.
Sixty offices out of 140 Senate offices (personal, committee, leadership, and
administrative) responded to the survey, and the responses indicated strong support
for the program. Although there is no statistical evidence that the benefit has been
an effective recruitment and retention tool, the secretary stated that there is anecdotal
evidence that Senate offices view it as an effective tool. Each of the Senate offices
participating in the program varies in the benefit amounts, up to the program
maximum of $500 a month, and each sets its own program within the parameters of
117 The shorter service agreement requirement takes into consideration the unique realities
of the Senate election cycles, and any potential changes in the majority in the Senate.
the law. Currently, some 126 offices are providing the student loan repayment to
nearly 900 Senate employees at a cost of about $3 million (an average of
approximately $3,333 a year per employee). The administration of the program is
quite complex; and the secretary indicated that at times as there could be as many as
100 lenders to pay, with many lending institutions being sold and re-managed, and
stated that efforts were underway to streamline the process in paying lenders. At the
hearing, Senator Durbin expressed the hope that information be gathered and
safeguards be put in place to prevent abuses and waste and to enhance the initial
goals of the program (recruitment and retention). The Secretary of the Senate stated
that she looked forward to working on this with the Senator.118
House of Representatives. Under the Consolidated Appropriations
Resolution, 2003 (P.L. 108-7), the House was granted authority to establish a student
loan repayment program for its employees. The Committee on House Administration
directed the Chief Administrative Officer (CAO) to design and administer a program
modeled after the Senate’s and, in general, executive branch repayment programs.
Like the Senate program, the House program requires a one-year service agreement,
with the possibility of additional one-year agreements. The maximum monthly
payment is $500 ($6,000 annual) with a total limit of $40,000 per employee. There
are no plans at this time to increase the annual and aggregate amounts permitted for
repayments to the levels authorized for executive branch employees.
A central account, administered by the CAO, funds the House repayment
program; thus, costs do not come from the Member’s Representational Allowance
(MRA), or committee or office budgets. The personal office of a Member, Delegate,
or Resident Commissioner is to be allocated an amount equal to 2% of the average
MRA for all Member offices for the year. For other House employing offices, an
amount equal to 2% of the salaries and expenses for the year is to be made available.
The House Offices of Finance and Human Resources have established a reporting
mechanism by which Member personal offices, House officers, and other House
offices are informed of monthly student loan repayments made to the participating
offices.
The CAO has prepared a standard written agreement for the offices to use. If
a House employee violates or leaves the office before fulfilling the terms of the
service agreement, the employee must pay back the benefit. The benefit is not an
entitlement or a guarantee of continued employment. The decision for granting the
benefit is at the sole discretion of each employing office, subject to law and
regulations. Repayments may be granted only to full-time employees. Interns,
volunteers, unpaid staff, and Members are not eligible for the program. The
repayment may be made to current and outstanding specified loans only, it must be
paid directly to the lender, and payments are counted as taxable income.
At the beginning of March 2003, the Committee on House Administration held
briefings on the repayment program for leadership, committee, and personal offices.
118 Remarks during Senate Appropriations Subcommittee on Legislative Branch
Appropriations Hearings on FY2006, April 13, 2005.
Details about the repayment benefit are available on the committee’s website, at
[ http://www.house.gov/cha/studentloan.htm] .
Student loan repayments began in the House in May 2003. The House
Committees on Appropriations and House Administration receive annual reports on
student loan repayments made on behalf of House employees.
In FY2004, a total of 2,102 House employees in 465 Member offices, leadership
offices, committees, and administrative support offices received the repayment
benefit. The repayments ranged from $300 to $500 a month per employee, and the
House spent a total of $7,075,000 (an average of $3,366 a year per employee) for the
program during the fiscal year. In FY2005, the total monthly limit of repayment
benefits for each individual Member’s office is $2,147. The repayment program is
generally viewed as useful for both recruitment and retention.119
According to the CMF 2004 House Staff Employment Study, a majority (63%)
believed that the repayment program helped the offices with recruitment and
retention.120 About 11% of the offices said they did not believe it assisted with these
goals and nearly 26% were “not sure”of the impact.121
Other Legislative Branch Entities. Congress has indicated concern about
impending retirements within the federal workforce122 and in the legislative branch.
As with executive branch agencies, several legislative branch entities have
implemented programs or are currently considering or formulating possible student
loan repayment programs for their respective employees.
Legislative branch entities are planning for substantial retirements in their
respective agencies over the next several years. For example, by the end of FY2006,
30% of all employees at CBO will be eligible for retirement, including 22% of
analysts and 46% of managers.123 The Library of Congress estimates that 32% of its
employees, including 27% of information technology specialists, will be eligible for
retirement by that date.124 Thirty-eight percent of Congressional Research Service
(CRS) employees will be eligible to retire by the end of FY2006, including 40% of
119 Based on telephone conversation with the Office of the Chief Administrative Officer on
May 12, 2005 and June 7, 2005.
120 440 offices were surveyed and 212 offices responded.
121 CMF 2004 House Staff Employment Study, p. 59-61.
122 U.S. Congress, Senate Committee on Governmental Affairs, Report of Senator Fred
Thompson on Management Challenges Facing the New Administration, 106th Cong., 2nd
sess., S.Prt. 106-62 (Washington: GPO, 2000). U.S. Congress, Senate Committee on
Governmental Affairs, Subcommittee on Oversight of Government Management,
Restructuring, and the District of Columbia, Report to the President: The Crisis in Humanthnd
Capital, 106 Cong., 2 sess., subcommittee rept. prepared by Sen. George V. Voinovich,
Chairman (unpublished: 2000).
123 Information provided to CRS by CBO staff by electronic mail on June 8, 2004.
124 Information provided to CRS by Library of Congress staff by electronic mail on June 9,
the research and analytical staff and 79% of senior management.125 At GAO, more
than 28% of the analysts and 61% of senior executives will be eligible for retirement
by the end of FY2009.126
These agencies have devised strategic plans to replace seasoned employees who
retire with highly qualified and skilled personnel. Some agencies view student loan
repayment programs as an attractive additional component to the benefits package
available to potential candidates who might have heavy student debt.
The authority of the legislative entities to establish student loan repayment
programs and the status of the programs are discussed below.
U.S. Capitol Police. The FY2002 Department of Defense Appropriations Act
(P.L. 107-117, H.R. 3338) authorized the U.S. Capitol Police to establish a student
loan repayment program similar to those established under P.L. 101-510.
Subsequently, the Consolidated Appropriations Resolution, 2003 (P.L. 108-7, H.R.
Under this law, the Chief of the Capitol Police may recruit and retain qualified
personnel using incentives such as student loan repayment, educational and tuition
assistance, training, and career development programs. Currently, repayments of up
to $10,000 annually and up to $40,000 in the aggregate per employee are permissible.
These amounts include monies granted to an employee for student loan repayment,
and tuition reimbursement and assistance expected to be implemented soon. Service
agreements are for two years.
In December 2003, the Capitol Police issued regulations for the repayment
program and began making loan repayments in May 2004 in support of efforts to
recruit and retain highly qualified employees, mainly law enforcement professionals
and some human resources and information technology specialists. For FY2004, 107
Capitol Police employees were given the repayment benefit at a total cost of
$944,000 (an average of $8,822 per employee). In FY2005, the Capitol Police
estimates that $1.1 million will be spent on repayments, and the FY2006 budget
request for the repayment is $1,383,000.
No studies or surveys on the program’s effectiveness in recruitment or retention
are currently available, partly because it is still new. The Capitol Police have stated
however, that there is anecdotal evidence the program is attracting law enforcement
candidates and reducing attrition. In the aftermath of the September 11, 2001,
terrorist attacks and concerns about bio-terrorism, the Capitol Police lost many
officers who took employment in other federal agencies or in the private sector. The
agency has found the program to be useful in the intense competition for law
enforcement professionals. The Capitol Police also noted that many more of their127
sworn officers who have been recruited hold degrees.
125 Information provided by CRS staff by electronic mail on June 3, 2004.
126 Information provided to CRS by GAO staff by electronic mail on June 3, 2004.
127 Based on a telephone conversation with staff of the U.S. Capitol Police, Office of
(continued...)
Congressional Budget Office (CBO). Authority for CBO to establish a
student loan repayment program was provided for under the FY2002 Legislative
Branch Appropriations Act (P.L. 107-68, H.R. 2647). Currently, approved
employees are eligible for repayments of up to $6,000 (annual) and up to $40,000
(aggregate). In February 2003, CBO established guidelines for the program and
began to offer the benefit as a recruiting tool for analysts specializing in the areas of
health, finance, and tax. For FY2003, CBO received $30,000 to fund the program.
For FY2004, CBO requested $25,000, received a budget of $15,000, and spent
$14,683 for three employees (an average of $4,894 a year per employee). For
FY2005, CBO requested and received $25,000. To date, CBO has spent $6,000 and128
provided benefits to one employee. CBO again requested $25,000 for FY2006.
Government Accountability Office (GAO). Authority for a student loan
repayment program is provided for GAO under P.L. 101-510. GAO issued the final
order to implement the program on June 7, 2002. Each fiscal year, GAO allocates
funds to be used for the program based on GAO’s Human Capital Office estimates
of program participation in a given fiscal year.
GAO reported the following information to OPM on student loan repayments
at the agency:
!in FY2002, 169 recipients at a cost of $602,662;
!in FY2003, 231 recipients at a cost of $945,206;
!in FY2004, 237 recipients at a cost of $1,142,295; and
!in FY2005, 218 recipients at a cost of $1,170,876.
For FY2006, GAO made repayments to 286 recipients at a cost of $1,396,538.
According to the agency, “a demographic breakdown of the FY2006 recipients shows
that 59 percent were in headquarters and 41 percent [were] in the field; 26 percent
were minorities ... 43 percent have been with GAO more than three years [and] 57
percent, less than three years.” The repayments ranged from less than $4,500
(received by 17 employees with lower student loan balances), to $4,500 (received by
In the spring of 2004, GAO conducted an evaluation of the FY2003 repayment
program in a web survey. The question concerning the efficacy of the program read
as follows: “The purpose of the student loan repayment program is to repay all or
part of a student loan to facilitate the recruitment or retention of highly qualified
employees. Overall, how much influence does the student loan repayment program
127 (...continued)
Financial Management, budget office on April 27, 2005 and June 8, 2005.
128 Based on email from staff of the Congressional Budget Office on April 28, 2005.
129 U.S. Government Accountability Office, GAO’s Management News, Week of Jan. 15-19,
have on your decision to stay at GAO?” A total of 286 respondents answered as
follows:
Great Influence 18.9%
Moderate Influence 25.9%
Some Influence 17.1%
Little or no influence 30.1%130
Government Printing Office (GPO). Authority to establish a student loan
repayment program is granted to GPO under P.L. 101-510. GPO implemented a
repayment program in April 2002, and since that time, 52 employees have received
repayments. The program is funded from GPO’s revolving fund. In FY2004, GPO
provided 28 employees with the benefit at a cost of $253,638 (an average of $9,059
a year per employee). The estimate for FY2005 is to provide 25 employees with the131
repayment benefit at a cost of about $175,000.
Library of Congress (LOC) (including the Congressional Research
Service (CRS)). Authority for the Library of Congress to establish a student loan
repayment program is provided for under P.L. 101-510. The Library issued final
regulations on the student loan repayment program on October 7, 2002, and revised132
those regulations on May 5, 2004. CRS requested, but did not receive, funding for
a repayment program in FY2003 and FY2004. In FY2005, Congress did not approve
a proposal for CRS to establish a pilot repayment program.
Library offices (not including CRS) are absorbing costs for the repayment
program within their base budgets because the Library did not receive funding for the
program in both FY2004 and FY2005. The Library did not request funds for
FY2006. In FY2003, the Library provided the repayment benefit to two employees
and in FY2004, to eight employees at a total cost of $46,000 (an average of $5,750
a year per employee). In FY2005, the Library anticipates providing benefits to seven133
employees at a total cost of approximately $41,000.
130 Any GAO employee could answer the survey. Based on an electronic mail transmission
from GAO on June 6, 2005.
131 Based on emails from the GPO budget office on May 12 and May 13, 2005. The data
presented are the most current and may differ from the OPM statistics because of differences
in the reporting date.
132 U.S. Library of Congress, Regulations, Repayment of Student Loans. LCR 2017-6. May
133 Based on information provided by the Budget Office of the Library of Congress on April
The Architect of the Capitol134 and the Office of Compliance135 each have
examined the repayment program as a possible recruitment and retention tool.
Although each agency requested authority to establish a student loan repayment
program in the past, Congress did not grant the requests.
Student Loan Repayments in the Judicial Branch
The Administrative Office of the U.S. Courts administers personnel policies for
the judicial branch. According to the Office, consistent with Judicial Conference of
the United States policy, statutory language was included in courts improvementth136
legislation in the 108 Congress (H.R. 1302 and S. 2396) that would have
authorized judicial law clerks working full-time to defer payment of principal and
interest on federally insured student loans for up to three years (typically the term law
clerks serve). A similar legislative proposal was submitted to the 109th Congress in
March 2005, but has not been introduced. The authority is sought to enable federal
judges to be more competitive with law firms in hiring new attorneys as clerks.
Unlike executive branch agencies, the Judiciary has not sought statutory
authorization to use its appropriated funds to repay student loans as a recruitment or137
retention incentive for prospective or current employees.
Issues for Consideration
Agencies may consider several issues as they implement student loan repayment
programs or determine whether the establishment of such programs is desirable or
feasible. Among these issues are how the program will be funded, the length of the
service agreement between the agency and the employee, the criteria for eligibility,
and the kinds of program data to be collected. Each is discussed below.
134 The AOC requested, but was not granted, authority to establish a repayment program in
its FY2003 and FY2004 budget proposals. No request was made in FY2005 or FY2006.
Based on a telephone conversation with Architect of the Capitol staff on April 27, 2005.
135 The Office of Compliance requested, but was not granted, authority for a repayment
program in FY2004 or in FY2005, and did not request authority in FY2006. Based on a
telephone conversation with Office of Compliance staff on April 29, 2005.
136 H.R. 1302, Federal Courts Improvement Act of 2003, was introduced by Representative
Lamar Smith on March 18, 2003, and was referred to the House Committee on the Judiciary
the same day. The Subcommittee on Courts, the Internet, and Intellectual Property marked-
up the bill and forwarded it to the full committee on March 20, 2003. S. 2396, Federal
Courts Improvement Act of 2004, was introduced by Senator Orrin Hatch on May 10, 2004,
and was referred to the Senate Committee on the Judiciary the same day. Neither bill saw
further action.
137 Information provided by electronic mail to CRS by Administrative Office of the U.S.
Courts staff on May 3, 2005.
Funding
While P.L. 101-510, as amended, provides authority to executive and certain
legislative branch support agencies to establish student loan repayment programs, the
law does not provide funding to implement those programs. The legislative history
of the 1990 law is clear that the authority is to be used “sparingly” and that no
additional appropriations were anticipated. Despite this intention, a specific
appropriation for repayments is sometimes requested and received by agencies. The
Department of State, for example, requested an appropriation of $7 million for
FY2002 and received an appropriation of $2 million for such repayments.138 The
FY2002 Legislative Branch Appropriations Act (P.L. 107-68) authorized
appropriations for a student loan repayment program for Senate employing offices
in FY2002 and each succeeding year. Not all agencies receive specific funds for the
program, however. Absent this, agencies must prioritize among all available
recruitment and retention incentives, including student loan repayments, and then
allocate funds accordingly from existing pay and benefits programs. A consideration
might be how to use the funding available for incentives in a manner that would
benefit the greatest number of employees.139
The U.S. Commission on National Security/21st Century, known as the Hart-
Rudman Commission, recommended that additional funds “to maximize agencies’
options in recruiting and retaining high-quality personnel” be provided. Identifying
student loan repayments as one of many incentive programs designed to recruit and
retain employees, the commission stated that the lack of agency use of the programs
resulted from a “lack of funds.” The commission noted that, “Because all incentive
programs are drawn from the same pool of money as that for salaries, administrators
must trade off incentives for some employees against the ability to hire additional
personnel.” The commission also recommended loan forgiveness for those
individuals in science, mathematics, and engineering entering civilian government
or military service.140
Required Service Agreement
Currently, a service agreement of at least three years is required in the executive
branch. In the legislative branch, the service agreement varies from one to three
138 Telephone conversation with Department of State staff on Feb. 6, 2002. P.L. 107-77,
Nov. 28, 2001, 115 Stat. 783; U.S. Congress, Conference Committees, Making
Appropriations for the Departments of Commerce, Justice, and State, the Judiciary, and
Related Agencies for the Fiscal Year Ending September 30, 2002, and for Other Purposes,thst
conference report to accompany H.R. 2500, 107 Cong., 1 sess., H.Rept. 107-278
(Washington: GPO, 2001), p. 145.
139 The National Treasury Employees Union (NTEU) “strongly supports” the student loan
repayment program, but is concerned that “no new funding was authorized.” NTEU is
“hopeful Congress will provide additional funding to help agencies pay for this important
benefit, and that Congress will require agencies to utilize this incentive authority.” NTEU
statement received by CRS by facsimile on July 18, 2001.
140 U.S. Commission on National Security/21st Century, Road Map for National Security:
Imperative for Change; The Phase III Report (Washington: Feb. 15, 2001), pp. 99 and 125.
years. Among the considerations that might enter into an agency’s discussion of the
appropriate length of a service agreement are these: Whether the repayments are
used to recruit or retain employees, the time and resources that would be expended
to hire and train employees to replace those who are leaving, the time that it takes for
newly hired employees to develop expertise in their positions, and whether a service
agreement longer than the minimum would diminish the interest of employees in
working in agencies with extended requirements. Additionally, a Member of
Congress’s tenure in office may affect the decision on the length of the service period
required in House and Senate offices.
Eligibility Criteria
When publishing the proposed regulations, OPM identified five factors to be
considered in determining whether the loan repayments should be authorized and the
amount of such payments:
!the success of recent efforts to recruit high quality candidates,
!labor market factors affecting recruitment,
!special qualifications or education needed,
!the cost of training current versus new employees, and
!the practicality of using other recruitment and retention incentives.
OPM’s final regulations noted that because “Several agencies complained that
the ‘factors to be considered’ portion of the [Criteria for Payment] section were
overly restrictive and burdensome,” these were deleted from the final rules.141
Requirements for written determinations of the need for the repayments based on
recruitment and retention (see the “Criteria for Repayments” section above) were
retained in the final regulations.
In final regulations implementing the amendments to the law, OPM noted a
suggestion that the term “highly qualified personnel” be defined in the regulations.
OPM stated that it did not adopt this suggestion because “A standard definition of
‘highly qualified personnel’ may limit agencies in their use of this authority, as there
are many ways in which [individuals] may be deemed highly qualified in relation to
the duties they perform or the skills they possess.”142 As for making the
determination that an employee would likely leave government service without the
repayment benefit, OPM stated that the regulations give agencies “wide latitude” and
do not require “proof from a private sector employer” to use repayment as a retention
incentive.143
The flexibility inherent in the OPM criteria for student loan repayments may be
considered by agencies in deciding whether repayments or other recruitment and
retention incentives would best meet their needs. The desire to fairly administer a
repayment program and not adversely affect employee morale may prompt
141 66 FR 2790.
142 66 FR 39405.
143 Ibid.
consideration of these issues: whether just new recruits or both new recruits and
current employees would be eligible for student loan repayments, the capability of
new recruits to repay their student loans depending on the pay grade at which they
are hired, and the fact that some current employees may have already recently paid
off their student loans.144
Records and Reports
P.L. 106-398 requires covered agencies to report annually to OPM on the
number and job classifications of employees receiving student loan repayments and
the cost of providing the repayments. The regulations implementing the law state
that “cost” is defined as the total amount of student loan repayments, and not the
costs of administering the program. Under the regulations, records on student loan
repayments must be maintained by the agencies for three years, or until after OPM
formally evaluates the program, whichever comes first. OPM must report annually
to Congress on agencies’ use of student loan repayments.145 Given the expansion of
student loan repayment programs, especially in the last year, a more comprehensive
indicator of expenses would be provided if OPM’s annual report included
information on the costs of administering the programs.
In Congress, the Senate Disbursing Office, under the Office of the Secretary of
the Senate, reports annually to the Committee on Appropriations and to the
Committee on Rules and Administration on the loan repayments made to Senate
employees. The Office of the Chief Administrative Officer reports annually to the
Committee on Appropriations and the Committee on House Administration on
repayments made to House employees.
The legislative branch does not require a report of its agencies that is publicly
available or comparable to OPM’s report. One way to assess the effectiveness of the
repayments as a recruitment and retention tool could be a survey of the employing
offices providing repayment benefits that would detail similar elements as presented
in the OPM report.
Agencies might examine whether student loan repayment records should be
maintained beyond the period prescribed by regulation. A longer period of record
keeping might be useful if an employee leaves to work at another federal agency and,
144 The American Federation of Government Employees (AFGE) “very much favors” the
benefit for both recruits and incumbent employees and believes that it might help current
employees to advance themselves and remain in government service. The National
Federation of Federal Employees (NFFE) views the program as a good recruitment and
retention tool. NTEU “believe[s] that agencies should give priority consideration to using
this incentive to retain those individuals already in the government workforce before using
it as a recruitment incentive.” Telephone responses from AFGE (July 18, 2001) and NFFE
(July 16, 2001) and NTEU statement received by CRS by facsimile on July 18, 2001.
145 Although the law does not specify the committees, the Senate Committee on
Governmental Affairs and the House Committee on Government Reform, in general, have
exercised jurisdiction over federal employee issues. Other committees, such as
Appropriations, also may have an interest in seeing the reports.
in turn, also receives loan repayment from that agency. The collected data could be
useful in evaluating the cost, desirability, feasibility, and effectiveness of the
programs. Pilot programs, instituted to test the effectiveness of repayments in
meeting workforce management goals, could serve as models for other agencies as
yet undecided about establishing repayment programs.
Oversight of Repayment Programs
In order to enhance the oversight of student loan repayment programs, OPM
may want to expand the information provided in its annual report to Congress.
Additional data that could be reported might include the following:
!the costs of administering such programs;
!the number of individuals who leave government service after
receiving repayments and completing the minimum required service
period,
!the number of individuals who have been granted waivers from
repaying the benefit if they do not fulfill the service agreement (an
agency head may waive the repayment for reasons of equity or
public interest), and
!the attrition rates of employees both receiving and not receiving
repayments.
Other information that could be included in the OPM report might be the
composition as to sex and race of recipients, to determine whether the program is
being administered in an equitable manner, and details on the written determination
document that recipients sign to attest that they would leave federal service in the
absence of the student loan repayment.
Congress, OPM, and the agencies themselves also may wish to examine whether
the intent of Congress that repayments be used sparingly and with great discretion is
being fulfilled, particularly since the number of repayments has increased so
significantly between FY2004 and FY2005. Individual executive agency reports on
student loan repayments are not available publicly. Perhaps agencies would consider
posting these reports on their Internet websites. Oversight of the repayment programs
may be strengthened by evaluations conducted by agency Inspectors General or the
National Academy of Public Administration.
Currently, several agencies have anecdotal evidence on the effectiveness of their
student loan repayment programs. Some agencies are into their fourth year of using
the incentive while others have one to three years of experience with the program.
In order to further assess the impact of repayments, agencies may institute systematic
entrance and exit interviews that query their employees on the importance of
receiving student loan repayments compared to other available recruitment and
retention incentives. In addition, the recruitment and retention results for new hires
who received and did not receive the repayments could be compared to determine the
effectiveness of the repayments. Information on the specific recruitment and
retention challenges that agencies are trying to mitigate through the use of
repayments also would illuminate whether they are primarily competing with other
agencies or with the private sector for staff.
Three executive branch agencies — the Departments of Justice and Defense and
the Securities and Exchange Commission — have been in the forefront of student
loan repayment programs since FY2003. The Department of State has been so since
FY2002. Together, these four agencies account for 81.3% (3,392) of recipients of
repayments and 84.1% ($22,432,654) of the total cost of repayments in the executive
branch in FY2005. OPM’s annual report could provide Congress with a more
complete measure of the efficiency and effectiveness of repayment programs if it
included detailed information on the administrative practices and costs and the
outcomes of the programs at these four agencies.
CRS-45
Appendix
Table 1. Student Loan Repayment — Executive and Legislative Branch Agencies, FY2004 and FY2005
In FY2004In FY2005
PaymentServiceNumber ofAverageTotal CostNumber ofAverageTotal CostTypes of
Agencies Authority Amo unt Agreement Recipients Repayment of Recipients Repayment of Positions
( Limit ) Amo unt Repayments Amo unt Repayments
ecutiveP.L. 101-510$10,000 perat least 32,102$4,856$10,208,8263,504$6,009$21,057,683Accountant,
ch — (1990); year;yearsAnalyst,
iki/CRS-RL31102binetenciesP.L. 106-398(2000);$60,000 totalAttorney,Economist,
g/wP.L. 108-123Engineer,
s.or(2003); I ntelligence
leakP.L. 108-136Specialist,
://wiki(2003)Managementand Program
http An a l ys i s ,
Scientist
CRS-46
In FY2004In FY2005
PaymentServiceNumber ofAverageTotal CostNumber ofAverageTotal CostTypes of
Agencies Authority Amo unt Agreement Recipients Repayment of Recipients Repayment of Positions
( Limit ) Amo unt Repayments Amo unt Repayments
ecutiveSame as above$10,000 perat least 3578$8,338$4,819,606667$8,405$5,606,214(in addition to
ch — year;yearspositions listed
n-Cabinet$60,000 totalabove)
encies Ad mi ni st r a t i o n,
Ar chivist,
Co nt r a c t i ng,
iki/CRS-RL31102 Info rmatio nT e c hno l o gy,
g/wLoan Specialist,
s.or Huma n
leak Reso ur ces,
Social Science,
://wiki Cr iminal
http I nve st i ga t o r
use ofP.L. 108-7$500 per1 year2,102$3,366$7,075,000notNANALegislative,
presentatives (2003) mo nt h, available Ad ministr a tive,
$40,000(NA)and Technical
P o sitio ns
nateP.L. 107-68$500 per1 year900$3,333$3,000,000NANANALegislative,
(2001) mo nt h, (approx.) (approx.) (approx.) Ad ministr a tive,
$40,000and Technical
P o sitio ns
CRS-47
In FY2004In FY2005
PaymentServiceNumber ofAverageTotal CostNumber ofAverageTotal CostTypes of
Agencies Authority Amo unt Agreement Recipients Repayment of Recipients Repayment of Positions
( Limit ) Amo unt Repayments Amo unt Repayments
ngressionalP.L. 107-68$6,000 per3 years3$4,894$14,683NANANAFinancial
dget Office(2001)year, $40,000Analyst, Health
to tal An a l ys t
vernmentSame as$10,000 perat least 3237$4,837$1,146,295NANANAAnalyst,
untabilityexecutiveyear; $60,000yearsAttorney,
iki/CRS-RL31102c e branch to tal Aud ito r ,Economist,
g/wSocial Scientist
s.or
leakvernmentSame as$10,000 perat least 328$9,059$253,638NANANASpecialists in
inting Officeexecutiveyear; $60,000yearsPrinting,
://wikibranch to tal Info rmatio n
http T e c hno l o gy,
Program
P l a nni ng,
Human Capital,
and
Co nt r a c t i ng;
Insp ector
General
CRS-48
In FY2004In FY2005
PaymentServiceNumber ofAverageTotal CostNumber ofAverageTotal CostTypes of
Agencies Authority Amo unt Agreement Recipients Repayment of Recipients Repayment of Positions
( Limit ) Amo unt Repayments Amo unt Repayments
brary ofSame as$10,000 perat least 38$5,750$46,000NANANAInformation
ngressexecutiveyear; $60,000yearsTechnology
branch to tal Sp ecialist,
Supervisory
Li b r a r i a n,
Supervisory
iki/CRS-RL31102 P r intingSp ecialist,
g/w Special
s.or Assista nt,
leak Co nfid ential
Assista nt,
://wikiLabor Relations
http Specialist
itolP.L. 107-117$10,000 per2 years107$8,822$944,000NANANAPredominantly
lice(2002);year; $40,000Officers,
P.L. 108-7totalInformation
(2003) T e c hno l o gy
and Human
Re so ur c e
Professionals
t a l 6,065 $27,508,048
(approx.) (approx.)
CRS-49
: The executive branch information on the number of recipients, total cost of repayments, and positions is derived from U.S. Office of Personnel Management, Federal Student
ent Program Fiscal Year 2004 Report to the Congress, April 2005 and U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal Year
t to the Congress, May 2006. Average repayment amounts were calculated by CRS. Examples of positions held by recipients of student loan repayments are included.
plete list of positions, see the OPM report. The legislative branch information for FY2004 was provided to CRS by the budget and human resources offices of the individual
in June 2005. Senate data are from the April 13, 2005, Senate Appropriations Subcommittee on Legislative branch hearings on the FY2006 (remarks of the Secretary of the
ate). Average repayment amounts were calculated by computer. The FY2005 data are not available as of the cover date of this report.
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CRS-50
Table 2. Student Loan Repayments by Executive Branch Agency, with Number of Recipients and Cost of
Repayments, FY2002, FY2003, FY2004, and FY2005
Fiscal Year 2002Fiscal Year 2003Fiscal Year 2004Fiscal Year 2005
AgencyNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepayments
partment of2$8,5244$28,00010$54,00017$93,650
r icultur e
partment of — — — — — — 2$10,000
mme r c e
iki/CRS-RL31102
g/wpartment of6$11,839469$1,309,247702$3,079,2281,077$4,818,492
s.ore nse
leakpartment of — — 2$12,00011$44,00016$74,834
://wikiucatio n
httppartment of17$50,59227$149,85536$86,65343$212,093
ergy
partment of8$35,00038$130,32355$195,74651$138,106
and Human
ices
partment of — — — — — — 18$160,000
meland Security
partment of — — — — 81$323,353180$397,255
using and Urban
velopment
CRS-51
Fiscal Year 2002Fiscal Year 2003Fiscal Year 2004Fiscal Year 2005
AgencyNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepayments
partment of the13$74,62520$113,01541$246,21647$318,276
terior
partment of1$4,000160$688,149331$1,919,4121,092$10,063,954
stice
partment of Labor — — 11$59,00024$118,08421$79,418
iki/CRS-RL31102partment of State407$2,000,000660$3,234,602734$3,610,773809$3,859,737
g/w
s.orpartment of — — — — 6$52,92818$180,000
leakansp o r tatio n
://wikipartment of theeasury9$14,82910$64,15018$155,36431$185,181
http
partment of — — 46$211,32953$323,06982$466,687
ans Affairs
ency for — — — — — — 43$200,000
ter natio na l
velopment
emical Safety and — — 1$2,000 — — — —
vestigation
rd
CRS-52
Fiscal Year 2002Fiscal Year 2003Fiscal Year 2004Fiscal Year 2005
AgencyNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepayments
mmittee for3$18,0002$12,0002$20,000 — —
rchase from
e Who Are
d or Severely
led
ense Nuclear1$6,0004$21,4505$41,6894$40,000
iki/CRS-RL31102etyrd
g/w
s.orronmental — — — — 7$41,00021$123,200
leakotection Agency
://wikiport-Import Bank3$18,00010$60,00012$76,1649$54,000
httpm Credit — — — — 15$71,462 — —
mi ni str a tio n
eral Energy35$226,43547$269,78778$703,83187$759,212
gul a t o r y
mmi s s i o n
eral Services7$39,48414$75,71117$93,1977$36,484
mi ni str a tio n
ter-American 1 $6,000 1 $6,000 1 $6,000 1 $6,000
und a t i o n
CRS-53
Fiscal Year 2002Fiscal Year 2003Fiscal Year 2004Fiscal Year 2005
AgencyNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepaymentsNumber ofRecipientsCost ofRepayments
nal Aeronautics8$48,00010$34,00040$341,78645$381,033
d Space
mi ni str a tio n
nal Archives — — — — 4$24,0006$44,302
d Records
mi ni str a tio n
iki/CRS-RL31102nal Mediation — — 4$11,1393$10,7504$20,512
g/wrd
s.or
leakclear Regulatory — — 5$30,00010$96,00022$220,000
mmi s s i o n
://wikice of Personnel — — — — — — 4$31,000
httpa na ge me nt
rities and — — 257$1,462,450384$3,293,727414$3,690,471
change
mmi s s i o n
tal of 15521$2,561,3281,802$7,984,2072,680$15,028,4324,171$26,663,897
Y2002), 22
Y2003), 26
Y2004), and 28
Y2005) Agencies
CRS-54
U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal Year 2002 Report to the Congress, June 2003. U.S. Office of Personnel Management,
al Student Loan Repayment Program Fiscal Year 2003 Report to the Congress, May 2004. U.S. Office of Personnel Management, Federal Student Loan Repayment Program
Year 2004 Report to the Congress, April 2005. U.S. Office of Personnel Management, Federal Student Loan Repayment Program Fiscal Year 2005 Report to the Congress,
2006, available at [http://www.opm.gov/oca/pay/StudentLoan]. The agencies are listed as they appear in the report. Reported costs are rounded to the nearest whole dollar.
The OPM report includes the Government Accountability Office (GAO) and the Government Printing Office (GPO), but data for these two legislative branch agencies are not
uded in this table. (GAO reported the following to OPM: in FY2002, 169 recipients at a cost of $602,662; in FY2003, 231 recipients at a cost of $945,206; in FY2004, 237
pients at a cost of $1,142,295; and in FY2005, 218 recipients at a cost of $1,170,876. GPO reported the following: in FY2002, no repayments; in FY2003, 44 recipients at a cost
in FY2004, 28 recipients at a cost of $253,638; and in FY2005, 20 recipients at a cost of $147,907.) See the legislative branch section in the text for additional information
e GAO and GPO programs.
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