Federal Manager's Daily Report

The maximum amount that agencies can give to employees for

repaying their student loans has increased under the National


Defense Authorization Act for fiscal year 2004, the Office

of Personnel Management has announced in a memo for human

resources officers.

The cap is going from $6,000 to $10,000 per calendar year and

from $40,000 to $60,000 in total, and OPM says it will soon

issue regulations reflecting the new cap.

In return for assistance, employees must sign up for service

in the paying agency for three years, and reimburse the agency

in the event that they quit or are fired for poor performance

if they don’t complete the three years.

Earlier this year agencies reported to OPM a significant

increase in repayments for fiscal 2002. Sixteen federal

agencies provided more than $3.1 million on behalf of 690

employees and several agencies reported that use of the program

has helped them hire and keep personnel.

For example, managers at the Department of State used the

program as an internal recruitment tool to attract employees

to positions that have been difficult to fill. Because its

foreign-service employees are required to bid for ongoing

assignments, State used the loan repayment program as incentive

to fill difficult assignments on time. Still, some agency

managers said they did not use the program because they did not

want their actions to be perceived as favoritism. For the full

NDAA memo go here