U.S. DEPARTMENT OF AGRICULTURE
WASHINGTON, D.C.
20250
DEPARTMENTAL REGULATION |
Number: 4050-537 |
|
SUBJECT: Repayment
of Student Loans |
DATE: September 1, 2004
|
|
OPI: Office
of Human Resources Management |
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1 PURPOSE
The
authority to repay student loans is one of several flexibilities available to
agencies to attract individuals to the Federal service, or to retain those
highly qualified personnel. Student
loan repayments should not be used to retain employees who leave for positions
in other Federal agencies, nor to recruit employees from other Federal
agencies.
2 AUTHORITY
This
policy constitutes the U.S. Department of Agriculture’s (USDA) Repayment of
Student Loans Plan. This Plan meets the
requirements set forth in 5 United States Code (U.S.C.) Section 5379 and 5 Code
of Federal Regulations (CFR) Part 537.
3 REFERENCES
AND RESOURCES
a Public
Law 108-136, National Defense Authorization Act for Fiscal Year 2004
b Public
Law 108-123, Federal Employee Student Loan Assistance Act, November 11, 2003
c Public
Law 101-510, National Defense Authorization Act for
Fiscal Year 1991, November 9, 1990,
codified as 5 U.S.C. 5379
d Public
Law 89-329, Higher Education Act of 1965, November 8, 1965, codified as 20
U.S.C. 1071 to1099 and amended by Public Law 105-224, October 7, 1998, codified
as 20 U.S.C. 1087aa to 1087gg
e Public
Health Service Act codified as 42 U.S.C. 292, et seq.
f 5 CFR
Part 537
g National
Finance Center Bulletin, Title I, Payroll/Personnel Manual, 01-15,
September
21, 2001
h Internet sites: http://www.opm.gov/oca/pay/StudentLoan/
http://www.hqnet.usda.gov/intranet/refer.htm
http://www.opm.gov/fedregis/html/archive.htm
FR, Jun 22, 2000, Vol. 65, No.120, pages 38791 to
38794
FR, Jan 11, 2001, Vol.
66, No. 8, pages 2789 to 2793
FR, Mar 16, 2001,
Vol. 66, No. 52, pages 15202 to 15203
FR, Jul 31, 2001,
Vol. 66, No. 147, pages 39405 to 39406
FR, Apr 20, 2004, Vol
69, No. 76, page 21039
4 SPECIAL
INSTRUCTION/CANCELLATIONS
This regulation supersedes and modifies DR 4050-537,
dated, April 2, 2002.
5 RESPONSIBILITIES
The
Director, Office of Human Resources Management (OHRM) is responsible for
setting policy and providing overall technical guidance and direction for the
Department’s Repayment of Student Loans Plan.
OHRM will provide staff assistance and monitor compliance with
Departmental policy, hereafter referred to as “the Plan.”
6 DELEGATIONS
OF AUTHORITY
Under
the Plan, the General Officers and agency heads listed in Part 2, subpart D of
title 7 of the Code of Federal Regulations are delegated the authority to
review and approve repayment of student loans.
The repayments may be all or part of any outstanding federally insured
student loan or loans previously taken out by a candidate who has been
appointed to a job or to retain a current employee of the agency. The General Officers and agency heads, are
responsible for ensuring that the repayments are granted in accordance with the
requirements set forth in the Plan.
Redelegations are encouraged and should be consistent with selection
authority.
7 DEFINITIONS
a Agency. As used in this document means agencies,
service and program offices of the Department whose head reports to the
Secretary, an Under Secretary, or an Assistant Secretary.
b Employees. Candidates who have been appointed to jobs
and are highly qualified, or current employees, except employees serving under
Schedule C or noncareer Senior Executive Service appointments, are eligible for
student loan repayments, if all other conditions are met.
c Student Loan. A loan made, insured or guaranteed under
parts B, D, or E of Title IV of the Higher Education Act of 1965 or a health
education assistance loan made or insured under part A of Title VII of the
Public Health Service Act, or under part E of Title VIII of that Act. A list of the qualifying student loans can
be found at the Internet site listed under “References” (http://www.opm.gov/oca/pay/StudentLoan/). Since updates to this list will occur, the
site should be checked before making any decisions to grant student loan
repayments.
8 REQUIREMENTS
Employees
who hold the following kinds of appointments are eligible to receive repayments
for student loans:
a Temporary employees serving on
appointments leading to conversion to term of at least 3 years or permanent
appointments, or
b Term employees with at least 3 years
left on their appointment; or
c Permanent employees; or
d Employees serving on excepted
appointments with conversion to term, career, or career- conditional
appointments (including, but not limited to, Career Intern or Presidential
Management Intern appointments).
9 PAYMENT
a Criteria
(1) Loan repayments must be based on a written determination that, in the absence of offering loan repayment benefits, it would be difficult to either fill the position with a highly qualified candidate or to retain a highly qualified employee in that position.
(2) Each determination for recruitment purposes (including the amount to be paid) must be made before the employee actually enters on duty in the position for which he or she was recruited.
(3) Payments authorized in order to recruit or retain an employee must be based upon a written determination that the high or unique qualifications of the employee or special need of the agency for the employee’s services makes it essential to retain the employee and that in the absence of offering student loan repayment benefits, the employee would be likely to accept or leave for employment outside the Federal service. This determination must be based on a written description of the extent to which the employee’s declination of a job offer or departure of an employee would affect the agency’s ability to carry out an activity or perform a function that is deemed essential to an agency’s mission.
(4) Agencies should develop written criteria for granting student loan repayments. These criteria can stipulate occupations, grade levels, geographic areas, licenses, certifications, degrees, special experience, and, other specifications needed to recruit employees or retain highly qualified employees in the Federal service.
(5) An employee who receives a student loan repayment and moves to another Federal agency or other USDA agency or Staff Office is not obligated to repay the benefit, unless the employee has agreed to make a repayment in this circumstance. The gaining agency is not obligated to reimburse the losing agency for the amount of the student loan repayment.
(6) Management officials must adhere to merit system principles and take into consideration the need to maintain a balanced workforce in which women and members of racial and ethnic minority groups are appropriately represented in government service.
(7) See Appendix A, for a Sample Recommendation of Approval for Repayment of Student Loan.
b Conditions for Payment. Payments will be at the discretion of the individual authorized
to make the determination and are subject to limitations, or conditions
mutually agreed to in writing, between the agency and the employee. Payments may be applied only to the
indebtedness outstanding at the time the agency and the employee enter into the
service agreement, and may not begin before the employee enters on duty with
the agency. Student loan repayment
benefits must be in addition to basic pay and any other form of compensation
otherwise payable to the employee involved.
Payments will be made by the National Finance Center (NFC) directly to
the holder of the loan by electronic funds transfer.
c Tax Withholdings.
Tax withholdings must be deducted or applied at the time any payment is
made. Tax withholding may not be spread
out over time. Since these tax
implications could create a financial hardship for the recipient of the
repayment benefit, agencies can lessen the impact of tax withholding on a
employee’s paycheck in one of the following ways:
(1) Agencies can make smaller payments at periodic intervals through the fiscal year or subsequent years, rather than issue payments under this part in one lump sum;
(2) Employees can write a check to the paying agency to cover the tax liability rather than have the tax liability withheld from the employee’s paycheck;
(3) Agencies can deduct the amount of taxes to be withheld from the loan repayment benefit before issuing payment to the holder of the loan;
(4) Please consult the Student Loan Repayment and National Finance Center (NFC) Internet sites for the latest information from the Internal Revenue Service regarding tax liabilities and payment procedures. See also NFC Bulletin, Title I, 01-15, dated September 21, 2001.
d Loans to be repaid.
Before authorizing loan repayments, an agency must verify with the
holder of the loan that the employee has an outstanding student loan that qualifies
for repayment. Agencies should verify
remaining balances with the holders of the loan to ensure that loans are not
overpaid. An agency may repay more than
one loan as long as the loan repayments do not exceed the limit. The amount paid by the agency is limited to
$10,000 per employee per calendar year or a total career payment of $60,000 per
employee.
e Size of payments.
In determining the size of the loan payments, an agency should take into
consideration the employee’s value to the agency, and how far in advance the
agency can commit funds. If budgetary
considerations are an issue, agencies have the discretion to determine the
repayment benefit amount given to an employee each year. This type of arrangement must be included in
the written service agreement with the employee. The amount paid by the agency is limited to $10,000 per employee
per calendar year, or a total career payment of $60,000 per employee.
f Employee responsibility. The employee will be responsible for making timely loan payments
on the portion of the loan(s) that continues to be the employee’s
responsibility. Payments do not exempt
an employee from his or her responsibility and/or liability for any loan(s) the
individual has taken out. The employee
will also be responsible for any income tax obligations resulting from the loan
repayment benefit.
g Service Agreements.
Before any loan repayments may be made an employee must sign a written
agreement to complete a specified period of employment with the agency and to
reimburse the agency for loan repayment benefits if the employee is separated
involuntarily on account of misconduct or failure to maintain an acceptable
level of performance, or the employee leaves the agency voluntarily. This agreement may also specify any other
employment conditions the agency considers to be appropriate, such as, but not
limited to, the employee’s position and the duties he or she is expected to
perform, work schedule, or level of performance.
(1) The minimum period of employment to be established under a service agreement must be 3 years, regardless of the amount of loan repayment authorized. Agencies can state in their service agreements that increases or renewals of payments made under this part can be made without requiring the employee to enter into a new service agreement, or agencies can require an additional period of service, in the service agreement.
(2) If the employee fails to reimburse the agency for the amount owed, a sum equal to the amount of the loan repayment must be recovered from the employee under USDA’s regulations for collection by offset from an indebted government employee under the authority of title 5 U.S.C. §5514 and 5 CFR Part 550 Subpart K, or through the appropriate provisions governing debt collection if the individual is no longer a Federal employee.
(3) There is no requirement to refund the loan repayment when the employee fails to complete a period of employment established under a service agreement because the employee is involuntarily separated for reasons other than misconduct or failure to maintain an acceptable level of performance or the employee leaves the agency voluntarily to enter into the service of any other agency, unless reimbursement to the paying agency is otherwise specified in the service agreement.
(4) Any amount repaid, or recovered from any employee will be credited to the appropriation account from which the amount involved was originally paid. If possible, any amount so credited will be merged with other sums in such account and will be available for the same purposes and period, and subject to the same limitations (if any), as the sums with which merged.
(5) General officers and agency heads, designated above, and their specific designees, are delegated the authority to waive in whole or in part, a right of recovery of an employee’s debt if he or she determines that recovery would be against equity and good conscience or against the public interest. The delegation includes payments to or on behalf of employees, or former employees, in full or in part, without regard to amount.
(6) A service agreement made under this part in no way constitutes a right, promise, or entitlement for continued employment or noncompetitive conversion to the competitive service. This language should be stated in the service agreement
(7) See Appendix B, for Sample Agreement for Repayment of Student Loan.
10 REPORTS
AND RECORDS
a No later than November 15 of each
year, Mission Areas and Staff Offices must provide OHRM/Personnel Policy and
Partnership Division the following information for the previous fiscal year
(See Appendix C):
(1) The
number of employees given student loan repayments;
(2) The pay
plan, series, grade, step, salary, title, and location of the employees who
received student loan repayments;
(3) The total
amount of the student loan paid to each employee; and
(4) The total
amount of student loan repayments made by the Mission Area or Staff Office.
b Each Mission Area and Staff Office
must keep a record of each student loan repayment determination and have the
records available for review when requested.
These records may be destroyed 3 years after the loan has been repaid,
or after the Office of Personnel Management has evaluated the program,
whichever is later.
-END-
APPENDIX A
SAMPLE RECOMMENDATION AND APPROVAL
OF THE REPAYMENT OF STUDENT LOAN(S)
1. Agency Name |
2. Agency
Code |
3. Case
No. |
4. Personnel Office Identifier |
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5. Name of Employee |
6. Social Security No. |
7. Duty Station
Code |
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8. Position Title |
9. Location (City, State) |
10. Pay
Plan/series/grade/step |
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11. Salary |
12. Organization |
13. Effective
Date |
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14. Accounting Code |
15. Mail
Check to (if applicable) |
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The
following information must be attached, for review by the recommending
and approving officials for a student loan repayment:
·
A written
justification outlining the difficulty experienced or expected in filling the
position if a student loan is not repaid, and
·
A written
determination that unusually high or unique qualifications of the employee or a
special need of the agency exists.
Or
· A written determination that the employee is likely to leave the Federal Government if the loan is not repaid, and
· A written description of the extent to which the employee’s departure would affect the agency.
· In addition, the proposed amount of the loan repayment, along with the rationale for the amount proposed.
17. Recommended Amount $ |
||
Signature of Recommending Official |
Title |
Date |
18. Approved Amount $ |
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Signature of Recommending Official |
Title |
Date |
SAMPLE RECOMMENDATION AND APPROVAL
OF THE REPAYMENT OF STUDENT LOAN(S)
Comments/Changes: |
||
Signature
of Approving Official |
Title |
Date |
Comments/changes: |
Form AD 1151 (9/2004)
Public Law 104-134 (April 26, 1996) requires
that any person doing business with the Federal Government furnish a social
security number or tax identification number.
This is an amendment to title 31, Section 7701. Furnishing the social security number, as
well as other data, is voluntary, but failure to do so may delay or prevent
action on the application. If your
agency uses the information furnished on this form for purposes other than
those indicated above, it may provide you with an additional statement
reflecting those purposes.
APPENDIX B
SAMPLE
SERVICE AGREEMENT FOR A RECEIPT
OF
REPAYMENT OF STUDENT LOAN(S)
In return for the repayment of my student loan(s) as described below, I hereby agree to remain an employee of the U.S. Department of Agriculture (USDA) - (the agency) for the period beginning following the effective date of the student loan repayment, unless I am separated for reasons beyond my control and which are acceptable to the above named agency. The amount of the repayment of student loan I will be receiving under this agreement is .
I agree that if I do not remain in the agency and maintain an acceptable level of performance for the above specified period I will repay to the agency the total amount of student loan repayment benefits I have received. I understand that this service agreement does not constitute a right, promise, or entitlement for continued employment or noncompetitive conversion to the competitive service. I understand that under such circumstances these monies are recoverable from me as a debt due the United States Government, and the agency is not responsible for making your loan payments and any late fees you are charged.
Signature |
Date |
Form AD-1152 (9/2004)
APPENDIX C
REPORTS AND RECORDS
a No later than November 15 of each year, Mission Areas and Staff Offices must provide OHRM/PPPD the following information for the previous fiscal year:
(1) The number of employees given student loan repayments___________________
(2) The pay plan, series, grade, step, salary and title of the employees who received student loan repayments (list below):
(3) The total amount of the student loan paid to each employee (list name of each student and amount received below):
(4) The total amount of student loan repayments made by the agencies, service and program offices .
b OHRM will request Race, Sex, National Origin, and Disability information from the National Finance Center data base. This information will be reviewed and evaluated to determine if there are any disparities or issued related to protected groups by grade, salary, title location, amount paid, or between Mission Areas or Staff Offices.
c Each Mission Are and Staff Office must keep a record of each student loan repayment determination and have the record available for review when requested. These records maybe destroyed after 3 years after the loan is repaid.