Student Loan Reimbursements Rise

The numbers of agencies and employees participating in the student loan reimbursement program rose in 2004, as did the amount paid out to employees, the Office of Personnel Management has reported. Under the program, agencies may reimburse employees up to $10,000 a year–$60,000 lifetime–as a recruiting and retention tool. In 2004, 28 agencies participated in the program, paying out $16.4 million to 2,945 employees (for an average payout of about $5,600), up from 24 agencies paying $9.1 million to 2,077 employees in 2003 (an average of about $4,400). Agencies told OPM that they generally consider the program an effective tool but that barriers remain to using the authority more widely, including a lack of funding caused by budget limitations, recipients’ tax liability, and the service agreement that comes with the payments. OPM noted that fixing the latter two issues would require legislation. A pending House bill (HR-1765) sponsored by Rep. Tom Davis, R-Va., the Government Reform Committee chairman, would make loan reimbursement payments tax-free.