Federal Student Loan Repayment Program:

OPM Could Build on Its Efforts to Help Agencies Administer the Program and Measure Results

GAO-05-762: Published: Jul 22, 2005. Publicly Released: Jul 22, 2005.

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As federal workers retire in greater numbers, agencies will need to recruit and retain a new wave of talented individuals. Agencies need to determine if the federal student loan repayment (SLR) program is one of the best ways to make maximum use of available funds to attract and keep this key talent. GAO was asked to identify (1) why agencies use or are not using the program; (2) how agencies are implementing the SLR program; and (3) what results and suggestions agency officials could provide about the program and how they view the Office of Personnel Management's (OPM) role in facilitating its use. Ten agencies were selected to provide illustrative examples of why and how agencies decided to use or chose not to use the program.

The largest users among GAO's 10 selected executive branch agencies primarily employed their SLR programs as broad-based retention tools aimed at keeping more recently hired employees with the knowledge and skills critical to their agencies. Officials at these agencies said the program also has an indirect positive effect on their recruitment efforts because job candidates are aware of the benefit and find the incentive attractive. Other agencies used the program as a recruitment and retention tool on a case-by-case basis, offering repayments to highly qualified individuals in occupations where the labor market is competitive. Agencies not using the program reported no real need to do so at this time because they are not facing significant recruitment and retention challenges. Agencies have a large degree of discretion in structuring their SLR programs, and they were tailoring program aspects to meet their unique needs. Those using their programs as broad-based retention tools operated them centrally, while those making loan repayments on a case-by-case basis had decentralized programs operated by their component units. Agencies also varied in the size of their loan repayments depending on the results they were trying to achieve. Although agencies believe it is a useful tool, officials described the program as time consuming and cumbersome to operate. They suggested that more automation and consolidation of program activities would make the program more efficient and easier to operate. Officials also suggested ways to make the program more effective. Since the SLR program is relatively new, agencies did not yet have comprehensive data to assess the program's impact, although they will need to establish a baseline of measures now for future assessments of the program. Currently, anecdotal evidence indicates that employees value the program, and agency officials believe the incentive will become more attractive to agencies once administrative problems are reduced. OPM has taken a number of steps to provide agencies with information and guidance on implementing the program. Human capital officials recognized OPM's efforts, but felt they could use more assistance on the technical aspects of operating the program, more coordination in sharing lessons learned in implementing it, and help consolidating some of the program processes. OPM and the Chief Human Capital Officers (CHCO) Council have an important role in assisting agencies with implementing their SLR programs. They may also be able to help agencies assess their own program results as well as develop a common set of metrics to provide information to Congress on the impact of the SLR program governmentwide.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: The United States Attorney General should build on current efforts to measure the impact of the Department of Justice's (DOJ) Attorney Student Loan Repayment Program by determining now what indicators the department will use to track program success, what baseline DOJ will use to measure resulting program changes over time, what data DOJ needs to begin to collect, and whether DOJ could use periodic surveys to track employee attitudes about the program as additional indicators of success.

    Agency Affected: Department of Justice

    Status: Closed - Implemented

    Comments: By September 2005, the Department of Justice had determined several indicators it will use to track the success of its attorney student loan repayment program and consulted with statistical experts to determine the usefulness and validity of possible measurements of the program. The department has also coordinated with the National Finance Center to collect data for a longitudinal baseline it will use to measure resulting program changes. In addition, the department has implemented two actions to track employee attitudes about the program as additional indicators of success, including augmenting its exit survey and Attorney General's Honors Program application with questions about the student loan repayment program.

    Recommendation: The Secretary of State should build on current efforts to measure the impact of the Department of State's (DOS) SLR program by determining now what indicators DOS will use to track program success, what baseline DOS will use to measure resulting program changes over time, what data DOS needs to begin to collect, and whether DOS could use periodic surveys to track employee attitudes about the program as additional indicators of success.

    Agency Affected: Department of State

    Status: Closed - Implemented

    Comments: By the end of September 2006, the Department of State had expanded on earlier performance measurements to more closely monitor the success of the student loan repayment program in three areas. The Department of State is also comparing attrition and hiring rates in targeted occupational series with voluntary separation and transfer rates of employees subject to a student loan repayment service commitment and also those employees who separated after fulfilling their required program service commitments. In addition, the Department of State has determined that it will continue to track employee attitudes about the program through annual surveys.

    Recommendation: Consistent with OPM's ongoing efforts in this regard, to help improve the SLR program's efficiency and ease of administration, and to assess results, the Director of OPM, in conjunction with the CHCO Council, should help agencies determine ways in which they can monitor long-term program effects on their recruitment and retention needs, such as determining data to collect and use as indicators of effects. This, in turn, could provide a consistent set of governmentwide indicators that would allow OPM to assess, and report to Congress on, the program's overall results achieved.

    Agency Affected: Office of Personnel Management

    Status: Closed - Implemented

    Comments: On July 27, 2006, OPM hosted a meeting of the interagency working group on the student loan repayment program to discuss methods of measuring the effectiveness of the program. A metrics expert was in attendance to provide feedback and insight to agency program managers on measurement issues. In addition, in September 2006, OPM distributed to agency program managers a set of ideas for measuring the effectiveness of the student loan repayment program. OPM has also added a question about the program to the 2006 Federal Benefits Survey to try to measure the program's importance in decisions to accept federal government employment or remain in the federal government.

    Recommendation: Consistent with OPM's ongoing efforts in this regard, to help improve the SLR program's efficiency and ease of administration, and to assess results, the Director of OPM, in conjunction with the CHCO Council, should continue and expand on its efforts to provide agencies assistance and to help facilitate coordination and sharing of leading practices by, for example, conducting additional forums, sponsoring training sessions, or using other methods.

    Agency Affected: Office of Personnel Management

    Status: Closed - Implemented

    Comments: Beginning in August 2005, OPM hosted two interagency forums on student loan repayments where participants shared comments and concerns and exchanged ideas on how to help agencies use student loan repayment benefits more effectively. At the second forum, representatives from three agencies shared best practices and lessons learned regarding their programs. OPM also joined with agency program managers to establish an interagency working group, which also provides an opportunity for program managers to share best practices and lessons learned with each other and provide feedback to OPM on ways it can better assist agencies in using the program as a recruitment or retention incentive. OPM has an additional interagency working group meeting planned where Department of Education representatives will make a presentation on student loan lending practices and the loan payment process. In addition, to assist in sharing information with the student loan repayment program community, OPM established an e-mail list server in August 2005.

    Recommendation: Consistent with OPM's ongoing efforts in this regard, to help improve the SLR program's efficiency and ease of administration, and to assess results, the Director of OPM, in conjunction with the CHCO Council, should work with the agencies, determine where program streamlining and consolidation of agencies' administrative tasks are most feasible and appropriate, and design ways ways to implement these program improvements, especially those that could be implemented governmentwide and the most cost-effective ways to implement them. Examples of program improvements that could provide valuable help to agencies and ease the administrative burden include creating a central database of student loan lender information and establishing a shared service center arrangement for student loan repayments.

    Agency Affected: Office of Personnel Management

    Status: Closed - Implemented

    Comments: In the spring and fall of 2006, OPM hosted meetings of a student loan repayment program interagency working group where improvements for more efficiently operating the program were discussed and demonstrated. For example, in April 2006, OPM distributed a consolidated set of contact information for various student loan lenders and services to agency program managers. In addition, under OPM's Human Resources Line of Business initiative, OPM has selected five shared service centers to provide technology and services to federal agencies in a number of core human resources areas, including a requirement to manage the student loan repayment program.

    Recommendation: The Chairman of the Securities and Exchange Commission (SEC) should build on current efforts to measure the impact of SEC's SLR program by determining now what indicators SEC will use to track program success, what baseline SEC will use to measure resulting program changes over time, what data SEC needs to begin to collect, and whether SEC could use periodic surveys to track employee attitudes about the program as additional indicators of success.

    Agency Affected: United States Securities and Exchange Commission

    Status: Closed - Implemented

    Comments: By September 2006, the Securities and Exchange Commission had determined several indicators it will use to track the success of its student loan repayment program and consulted with statistical and metrics experts to determine the usefulness and validity of these measurements of the program. In addition, the agency tracks program participants who leave the agency before completing the service agreement to determine any trends regarding the occupations of those employees who leave early and the length of time between receiving benefits and leaving the agency. The agency also tracks employee attitudes about the program through exit surveys and its Annual Employee Survey as additional indicators of success.

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