[Senate Report 108-109]
[From the U.S. Government Publishing Office]
108th Congress
1st Session SENATE Report
108-109
_______________________________________________________________________
Calendar No. 220
FEDERAL EMPLOYEE STUDENT LOAN ASSISTANCE ACT
__________
R E P O R T
together with
ADDITIONAL VIEWS
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE
to accompany
S. 926
TO AMEND SECTION 5379 OF TITLE 5, UNITED STATES CODE, TO INCREASE THE
ANNUAL AND AGGRETATE LIMITS ON STUDENT LOAN REPAYMENTS BY FEDERAL
AGENCIES
July 21, 2003.--Ordered to be printed
COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Ann C. Fisher, Deputy Staff Director
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Lawrence B. Novey, Minority Counsel
Andrew Richardson, Staff Director, Subcommittee of Government
Management, the Federal Workforce and the District of Columbia
Emily J. Kirk, Minority Counsel, Subcommittee of Government Management,
the Federal Workforce and the District of Columbia
Amy B. Newhouse, Chief Clerk
Calendar No. 220
108th Congress
SENATE
Report
1st Session 108-109
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FEDERAL EMPLOYEE STUDENT LOAN ASSISTANCE ACT
_______
July 21, 2003.--Ordered to be printed
_______
Ms. Collins, from the Committee on Governmental Affairs, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 926]
The Committee on Governmental Affairs, to which was
referred the bill (S. 926) to amend section 5379 of title 5,
United States Code, to increase the annual and aggretate limits
on student loan repayments by Federal agencies, having
considered the same reports favorably thereon without an
amendment and recommends that the bill do pass.
I. Purpose and Summary
The purpose of S. 926, the Federal Employee Student Loan
Assistance Act, is to increase the annual and aggregate amounts
that federal agencies can offer a qualified employee to assist
in repaying a student loan. The current repayment amount for an
employee is limited to $6,000 per year and $40,000 total. This
legislation would raise the annual amount to $10,000 and the
aggregate amount to $60,000, reflecting an increase in annual
college tuition costs since the enactment of the original
statute in 1991. Repayment of student loans, as a recruitment
and retention incentive, offsets the higher salaries offered by
private industry and is a tool for restructuring the federal
civilian workforce to meet changing mission needs. Without this
additional authority, the rising cost of tuition would lessen
the competitive value of this recruitment and retention tool.
An employee for whom a student loan repayment benefit is
paid must sign a service agreement to remain in the service of
the paying agency for a period of at least three years. The
employee must reimburse the paying agency for all benefits paid
if he or she separates voluntarily or is separated
involuntarily for cause or poor performance before fulfilling
the service agreement.
II. Background
According to a June 2003 Office of Personnel Management
document entitled, Federal Student Loan Repayment Program--
Fiscal Year 2002: Report to the Congress, ``In FY 2002, 16
federal agencies provided more than $3.1 million in student
loan repayments for 690 federal employees. In addition, eight
other agencies reported that they have established an agency
loan repayment plan and expect to make use of the program in
the near future. In total, more than half (29) of the reporting
agencies (57) reported that they either made student loan
repayments in FY 2002, have an agency loan repayment plan in
place, or are in the process of establishing a student loan
repayment plan.'' The report continues, ``Several agencies
reported that use of the program has helped them achieve their
recruitment and retention goals. Agencies are also making a
concerted effort to make applicants and current employees aware
of the availability of student loan repayments. The most common
barrier to using the student loan repayment program reported by
agencies was a lack of funding caused by limited budgets. The
agencies also recommended several changes in the student loan
repayment program, such as eliminating the tax liability and
reducing the statutory 3-year service requirement in exchange
for a student loan repayment, as well as increasing the annual
payment limitation and lifetime payment limitation on student
loan repayments. These proposed changes would require
legislation and are under review.'' S. 926 addresses two of
these agency recommendations by raising the annual and
aggregate limits on student loan repayments.
III. Legislative History
S. 926 was introduced on April 28, 2003, by Senator George
V. Voinovich and was referred to the Senate Committee on
Governmental Affairs.
S. 926 was polled out by the Subcommittee on Oversight of
Government Management, the Federal Workforce and the District
of Columbia on June 11, 2003, by a vote of 10-0.
S. 926 was considered by the Committee on Governmental
Affairs on June 17, 2003, approved en bloc with other bills by
voice vote, and ordered to be reported, with no Members present
dissenting. Senators present were as follows: Collins,
Lieberman, Voinovich, Coleman, Fitzgerald, Sununu, Levin,
Akaka, Durbin, Lautenberg, and Pryor.
IV. Section-by-Section Analysis
Section 1. Short title
This Act may be cited as the ``Federal Employee Student
Loan Assistance Act''.
Section 2. Student loan repayments
This section amends section 5379(b)(2) of title 5 USC by
increasing the annual and aggregate amounts that agencies can
repay a highly qualified employee for a student loan to $10,000
and $60,000, respectively.
V. Estimated Cost of Legislation
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 20, 2003.
Hon. Susan M. Collins,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Madam Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 926, the Federal
Employee Student Loan Assistance Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Robert A. Sunshine
(For Douglas Holtz-Eakin, Director).
Enclosure.
S. 926--Federal Employee Student Loan Assistance Act
S. 926 would amend the federal student loan repayment
program to increase the limits on the amount of student loans
that agencies may repay on behalf of eligible employees. Under
current law, agencies can offer each eligible employee up to
$6,000 a year for student loan repayments, and the total amount
of repayment available to any employee is limited to $40,000.
This legislation would increase the yearly limitation on such
repayments to $10,000 and raise the individual limitation to
$60,000.
CBO estimates that implementing S. 926 would cost less than
$500,000 a year, subject to the availability of appropriated
funds. Enacting the bill would not affect direct spending or
revenues.
Based on information from the Office of Personnel
Management (OPM), CBO does not expect that an increase in the
limitations on student loan repayment would lead to a
significant increase in the cost of the program. OPM reports
that the most common barrier to federal agencies using the
student loan repayment program is a lack of specific funding.
During fiscal year 2002, 16 government agencies provided
student loan repayment benefits to 690 employees at a cost of
$3.1 million, with an average repayment amount of $4,500. (The
Department of State made most of those loan payments, providing
$2 million to 407 employees.) Because current spending for
student loan repayments does not appear to be significantly
constrained by the current annual limit of $6,000 per eligible
employee, CBO estimates that increasing the limit by $4,000
would result in only a minor increase in spending for this
benefit.
S. 926 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Matthew
Pickford. This estimate was approved by Robert A. Sunshine,
Assistant Director for Budget Analysis.
VI. Evaluation of Regulatory Impact
Paragraph 11(b)(1) of rule XXVI of the Standing Rules of
the Senate requires that each report accompanying a bill
evaluate the ``regulatory impact which would be incurred in
carrying out this bill.'' Carrying out S. 926 would have no
regulatory impact.
VII. Additional Views of Senator Akaka
I support the Federal Employee Student Loan Assistance Act,
S. 926, which will increase the annual and aggregate amounts
that federal agencies can offer a qualified employee to assist
in repaying a student loan. However, I am concerned with the
lack of funding available to agencies to effectively use this
important recruitment and retention tool. Without adequate
funding, federal agencies are hindered in their ability to hire
or provide appropriate retention incentives to talented
employees who are strong candidates for the program.
Responding to recommendations of the National Commission on
the Public Service that a loan forgiveness program be
established for federal service, Congress authorized a student
loan repayment program for highly qualified federal employees
in 1990. The April 1989 Commission report found that the
federal government faced serious problems in recruiting and
retaining a quality workforce. Student loan repayment was
viewed as a way to make government service more attractive to
candidates, many of whom have incurred significant student loan
debt in acquiring their education.
However, the program has not lived up to its full
potential. According to the Office of Personnel Management
(OPM) report entitled Federal Student Loan Repayment Program--
Fiscal Year 2002: Report to the Congress, of the 16 agencies
that have used this authority, most have awarded student loan
repayment to a small number of individuals.\1\ Only the
Department of State and the General Accounting Office have
utilized the program as intended.\2\ According to agencies, the
most common barrier to using the student loan repayment
incentive was a lack of funding for the program. One agency
even commented that because agencies have such limited budgets,
it is difficult, if not impossible, to find the money to fund
the program. This raises serious concerns about the effective
use of the program and our recruitment and retention efforts.
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\1\ Beneficiaries of student loan repayments in FY 2002 included 35
employees at the Federal Energy Regulatory Commission, 17 at the
Department of Energy, 13 at the Department of the Interior, 9 at the
Department of the Treasury, 8 at the National Aeronautics and Space
Administration, 8 at the Department of Health and Human Services, 7 at
the General Services Administration, 6 at the Department of Defense, 3
at the Export-Import Bank, 3 at the Committee for Purchase from People
Who Are Blind or Severely Disabled, 2 at the Department of Agriculture,
and 1 employee each at the Department of Justice, the Defense Nuclear
Facilities Safety Board, and the Inter-American Foundation.
\2\ The Department of State made loan repayments benefitting 407
employees while the General Accounting Office (GAO) made loan
repayments for 169 employees.
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If we are to bridge the gap between retiring employees and
the need for new workers, we must find ways to encourage
government service. Ensuring that student loan debt is not an
impediment to the federal government being an employer of
choice is an important step. This is especially important as
high educational debt has been found to make a significant
difference in the federal government's ability to recruit
talented employees. On June 4, 2003, Paul Light, Director of
the Brookings Institution Center for Public Service, testified
before the Committee that while the nature of the job remains
the most important consideration in making a decision about
where to work, college debt makes a difference in job choice
for the class of 2003.
The Committee notes in its report accompanying S. 926 that
funding for the student loan repayment program is a problem.
However, I do not believe that this problem has received the
attention it deserves. I am pleased to have joined Senator
Voinovich in urging the Appropriations Committee for the past
three years to provide funds to address agencies' human capital
needs. However, more must be done. To address this need,
federal agencies may require specific funding for recruitment
and retention initiatives. I look forward to working with my
colleagues to secure funding for the repayment of student loans
for federal employees. Only then will the federal government be
able to effectively compete with the private sector and recruit
and retain talented individuals.
Daniel K. Akaka.
VIII. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic and existing law, in which no
change is proposed, is shown in roman):
TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
PART III--EMPLOYEES
Subpart D--Pay and Allowances
CHAPTER 53--PAY RATES AND SYSTEMS
Subchapter VII--Miscellaneous Provisions
Sec. 5379. Student loan repayments
* * * * * * *
(b)(1) The head of an agency may, in order to recruit or
retain highly qualified personnel, establish a program under
which the agency may agree to repay (by direct payments on
behalf of the employee) any student loan previously taken out
by such employee.
(2) Payments under this section shall be made subject to
such terms, limitations, or conditions as may be mutually
agreed to by the agency and employee concerned, except that the
amount paid by an agency under this section may not exceed--
(A) [$6,000] $10,000 for any employee in any calendar
year; or
(B) a total of [$40,000] $60,000 in the case of any
employee.
* * * * * * *