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News Release

Friday, August 27, 2004
Contact: Brenda Bertrand
Tel: 202-606-2402


James Continues to Encourage Even Greater Use of Program to Recruit Top Talent

Washington, D.C. - Federal agencies are using the federal student loan repayment program as an incentive to recruit highly qualified candidates and retain current employees, according to a recent report to Congress. The report issued by the U.S. Office of Personnel Management (OPM) on the use of the federal student loan repayment program by agencies, showed agencies provided more than $9.1 million in student loan repayment benefits to 2,077 employees in FY 2003.

"I am pleased that agencies are utilizing the Student Loan Repayment Program more than they have in the past, but far more remains to be done," OPM Director Kay Coles James said. "Some agencies have demonstrated excellent results and have an established track record of results. Other agencies, including OPM itself, have repositioned their operations to make better use of repayments in the coming year, consistent with updated human capital plans, mission critical needs and revamped hiring processes."

OPM's annual report to Congress showed a significant increase in the use of the student loan repayment program in FY 2003. Overall, federal agencies used student loan repayments to recruit and retain three times as many employees in FY 2003 as in FY 2002 and invested nearly three times as much funding in the program. Twenty-four agencies provided student loan repayment benefits to their employees. In addition, six other agencies reported they have established an agency student loan repayment plan, and two agencies are in the process of establishing a plan.

In a recent memorandum to heads of executive departments and agencies, Director James further encouraged agencies to use the program as a "tool to manage their workforce strategically [and] develop a budget plan for using recruitment and retention incentives, including student loan repayments."

Under 5 U.S.C. 5379, federal agencies may repay as much as $10,000 on behalf of an employee in a calendar year, up to an aggregate maximum of $60,000 for any one employee. In return, the employee must sign a service agreement to remain in the service of the paying agency for a period of at least 3 years. The law also requires agencies to report annually to OPM on their use of the student loan repayment program during the previous fiscal year.

In conjunction with the release of the report, Director James commended agencies on their increased usage of the valuable program and other incentives for employee recruitment and retention. "The strategic implementation of this program and other existing flexibilities across the federal government is critical to fulfilling the President's Management Agenda; making this government results-oriented, market-based and citizen-centered. OPM is committed to work with agencies to attract and retain well-qualified, high-performing employees."

In addition to the annual report to Congress, OPM will continue to assist agencies in targeting their use of student loan repayments, as well as other recruitment and retention flexibilities, to meet their human capital management needs.

More information on the federal student loan repayment program, including the complete annual report to Congress, can be accessed at

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OPM leads and serves the Federal Government in enterprise human resources management by delivering policies and services to achieve a trusted, effective civilian workforce. By Empowering Excellence in Government through Great People, we provide leadership and support to U.S. agencies on issues including human resources policy and oversight, background investigations, federal employee benefits, retirement services, guidance on labor-management relations, and programs to improve workforce performance. For more information, visit or follow OPM on Twitter, Facebook, or LinkedIn.

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