U.S. hopes to lure workers with student loan payoffs

The Washington Post

WASHINGTON — The federal government is working on a deal to lure to its payroll recent college graduates with technical skills and piles of student loans to pay off.

Professional civil servants worried about repaying their college debts or thinking about taking new loans to continue their education may also get this new deal — if it keeps them in government service.

The Office of Personnel Management is polishing final regulations that would allow agencies to repay the college loans of prospective recruits and current civil servants with technical, professional or administrative skills in demand now or in the future. The Clinton administration is rushing to finish the rules before Jan. 20.

The move to help repay student loans, a growing burden for graduates as tuition continues to rise, is being taken to encourage more young people to consider government work and retain career civil servants as the number of federal employees eligible to retire mounts in the coming years.

Student loan debt has often been cited as a source of financial pressure on new graduates, and is one reason some have shied away from work in government and other service-oriented careers that don’t pay as much as some private-sector jobs.

"I think it would be a useful recruiting device and also a useful device for retaining people," said Edward Eitches, a union leader who represents 2,200 employees at the Department of Housing and Urban Development.

Eitches compared the proposed benefit to the practice some law schools follow of forgiving the loans of graduates who pursue public-interest careers.

Under proposed rules published in June, agencies could repay as much as $6,000 a year on the federally backed college loans of a new hire and current employee, up to a lifetime maximum of $40,000. In exchange, the employee must commit to remaining with the agency for at least three years and possibly longer, depending on the agreement reached.

Political appointees or policymakers would not be eligible.

Each agency is to decide specifically which applicants or employees to offer loan repayment, and how long they would have to stay. The proposed rules say agency officials are to be guided by principles of merit, equity and fairness in making the offers.

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