U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

19–010

" SENATE ! 108th Congress 

1st Session 

REPORT

2003

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 


congress.#13
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COMMITTEE ON GOVERNMENTAL AFFAIRS 

SUSAN M. COLLINS, Maine, Chairman 

TED STEVENS, Alaska 

GEORGE V. VOINOVICH, Ohio 

NORM COLEMAN, Minnesota 

ARLEN SPECTER, Pennsylvania 

ROBERT F. BENNETT, Utah 

PETER G. FITZGERALD, Illinois 

JOHN E. SUNUNU, New Hampshire 

RICHARD C. SHELBY, Alabama 

JOSEPH I. LIEBERMAN, Connecticut 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

RICHARD J. DURBIN, Illinois 

THOMAS R. CARPER, Delaware 

MARK DAYTON, Minnesota 

FRANK LAUTENBERG, New Jersey 

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

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 sepaVerDate Jan 31 2003 06:54 Jul 22, 2003 Jkt 019010 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\SR109.XXX SR109
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rates 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 

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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. 

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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.

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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. 2The Department of State made loan repayments benefitting 407 employees while the General 

Accounting Office (GAO) made loan repayments for 169 employees. 

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. 

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, 

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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.

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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 

§ 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) ø$6,000¿ $10,000 for any employee in any calendar year; 

or 

(B) a total of ø$40,000¿ $60,000 in the case of any employee. 

* * * * * * *

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