Government Employees Get Help in Paying Back Student Loans

Aug 23rd, 2010 @ 5:09 AM by Debbie Dragon

According to an article in the Washington Post, Federal government employees with student loans benefited last year, as many of them had their student loans repaid for them. 36 different federal agencies provided student loan payback assistance to over 8,000 federal employees. The total cost to the government was $61.8 million in 2009, a 20% increase from 2008.

“President Barack Obama has highlighted the importance of recruitment and retention tools and has asked each Federal agency to do its part to ensure ‘this Government is as efficient as possible and that every taxpayer dollar that is spent is being spent wisely,’” Office of Persona Management said in a statement accompanying the statistics.

The loan payback program began in 2002 and was put into place as a means to try and recruit and retain government employees. Agencies within the government are able to repay up to $10,000 in loans for individual employees on an annual basis and up to $60,000 total. In 2009 the average payback per individual was $7,317 according to the Office of Personnel Management. In order for employees to receive the payback benefit they must sign a contract holding them to government employment for a minimum of three years.

According to the article in 2009 government lawyers were the group who received the most help with repayment while criminal investigators, administrative personnel, contract specialist s and intelligence analysts were not far behind. Agencies that paid out the most to their employees included The Justice Department coming in at $19.3 million followed by the Defense Department at $14.1 million. Also paying out large amounts were the State Department, the Securities and Exchange Commission and the Government Accountability Office.

While many agencies were able to help pay back student loans, 14 unnamed government agencies said that due to budget issues they were unable to assist any employees in 2009 in paying back their student loans. This was thought to have an impact in some areas of recruitment.

The article further stated that many companies use student loan repayments or even reimbursement for tuition as a means for recruiting and retaining employees. The government has been involved for less time in this concept and fiscal conservatives and some news outlets see it as a result of a growing pay gap between the public and private job employment sector.