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Decline in student loan repayment incentives for federal employees

A recent OPM report showed a decline in the use of student loan repayment incentives for federal employees in 2011, which it said reflected tighter budgets and personnel controls, particularly at the Defense Department. Below is a summary of spending reported by the OPM for various federal agencies:

Thirty-four Federal agencies provided 10,134 employees with a total of more than $71.8 million in student loan repayment benefits in 2011. This represents nearly an 11 percent decrease in the number of employees receiving student loan repayment benefits and a 16 percent decrease in agencies overall financial investment in this particular incentive. The average student loan repayment benefit was $7,091, a 6 percent decrease compared to CY 2010.

In 2011, more than 62 percent of all student loan repayment benefits were doled out to the Department of Defense (DOD), the Department of Justice, and the Department of State personnel. Combined, these three agencies provided 6,053 employees with more than $44.6 million in student loan repayment benefits. The other 31 agencies combined to provide 4,081 employees with just over $27 million in student loan repayment benefits.

The majority of the decrease in the use of student loan repayment benefits can be attributed to DOD’s student loan repayment program. DOD invested $15 million less in student loan repayment benefits than it did in 2010, a 51 percent cut. DOD provided student loan repayment benefits to 1,571 fewer employees than it did in 2010, which came to a 41 percent decrease.

The two main reasons for the DoD’s decline in benefits were budget constraints and hiring controls. Many DOD components did not have the funding to offer student loan repayments in 2011 as they had during 2010 and previous years.

In 2011, 34 Federal agencies provided 10,134 employees with a total of more than $71.8 million in student loan repayment benefits. This represents nearly an 11 percent decrease in the number of employees receiving student loan repayment benefits and a 16 percent decrease in agencies overall financial investment in this particular incentive since 2010.

In CY 2011, all 15 Federal departments and 19 agencies used student loan repayments as a human resources management tool. In addition to the 34 agencies that provided student loan repayments during CY 2011, 6 additional agencies have established a student loan repayment program. These agencies include the Government Printing Office, National Capital Planning Commission, Office of Government Ethics, Office of Personnel Management, Small Business Administration and the U.S. AbilityOne Commission. Thus, nearly half of the reporting agencies (40 out of 87) either provided student loan repayments during CY 2011 or have established a student loan repayment program.

Do you take advantage of your federal employee education benefits? If so, did you find the process of using them easy and have you seen a benefit in your career by having the additional education? Tell us in the comments.

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