Repayment of Student Loans, 64861-64868 [E8-26013]
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Federal Register / Vol. 73, No. 212 / Friday, October 31, 2008 / Rules and Regulations
the employee with specific information
as to how, when, and where the
payments are to be submitted.
(d) Coverage. Employee payments are
considered to be currently deposited if
received by the agency before, during, or
within 3 months after the end of the pay
period covered by the deposit. If the
contributions are not currently
deposited, coverage terminates on the
last day of the pay period for which the
required contributions were currently
deposited, subject to a 31-day extension
of group life insurance and health
benefits coverage as provided in parts
870 and 890 of this chapter and to the
conversion benefits provided in parts
870 and 890 of this chapter. Coverage so
terminated may not be re-established
before the employee actually enters on
duty, on the first day in a pay status in
an agency. However, terminated
retirement, health benefits, and group
life insurance coverage must be
reinstated retroactively when, in the
judgment of OPM, the failure to make
the required current deposit was due to
circumstances beyond the employee’s
control and the required payments were
deposited at the first opportunity.
Coverage under a system other than the
Civil Service Retirement System must
be reinstated retroactively if the agency
which administers the retirement
system determines that the failure to
make the required current deposit was
due to circumstances beyond the control
of the employee and the required
payments were deposited at the first
opportunity.
§ 352.310
[Removed]
8. Remove and reserve § 352.310.
9. Revise § 352.311 through § 352.314
to read as follows:
■
■
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§ 352.311
Reemployment.
(a) An employee who transferred to an
international organization with the
consent of the employing agency is
entitled to be reemployed in his or her
former position, or one of like seniority,
status, and pay, within 30 days of
applying for reemployment if the
employee:
(1) Is separated, either voluntarily or
involuntarily, without cause, within the
term of employment with an
international organization; and
(2) Applies for reemployment with
the employing agency or its successor
no later than 90 days after separation
from the international organization.
(b) Pay upon reemployment will be
set at that to which the employee would
have been entitled had the employee
remained with the employing agency.
(c) When an employee’s
reemployment right is to a position in
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the SES, reemployment may be to any
position in the SES for which the
employee is qualified. The employee
must be returned at not less than the
SES rate of basic pay as determined
under 5 CFR part 534, subpart D, at
which the employee was being paid
immediately before transfer to the
international organization, or if pay has
been adjusted under § 352.314(c), at not
less than the adjusted pay level.
(d) The period of separation caused by
the employment of the employee with
the international organization and the
period necessary to effect reemployment
are creditable service for all appropriate
civil service employment purposes (e.g.,
tenure, service computation date,
retirement, time in grade). Employees,
upon return, are also entitled to
restoration of any sick leave.
(e) An employee who elected to retain
Federal retirement coverage while
employed by the international
organization and has made all deposits
required for such coverage may make
contributions to the TSP which he or
she missed as a result of the service
with the international organization, and
receive make-up agency contributions
and lost earnings on the agency
contributions, consistent with
applicable TSP requirements.
§ 352.312
When to apply.
An employee may apply for
reemployment, in writing, either before
or after separation from the
international organization. If the
employee applies before separation, the
30-day period prescribed in § 352.311
begins either with the date of the
application or 30 days before the
employee’s date of separation from the
international organization, whichever is
later. If the employee applies for
reemployment after separation, the
application must be received by the
employing agency no later than 90 days
after separation from the international
organization.
§ 352.313
appeal.
Failure to reemploy and right of
Frm 00003
issue a decision to the Merit Systems
Protection Board under the provisions
of the Board’s regulations.
(c) An employee may submit an
appeal, alleging that the agency has
failed to comply with any of the other
provisions of sections 3343 and 3581–
3584 of title 5, United States Code, or
of this part, to the Merit Systems
Protection Board under the provisions
of the Board’s regulations.
§ 352.314 Consideration for promotion and
pay increases.
(a) The employing agency must
consider an employee who is detailed or
transferred to an international
organization for all promotions for
which the employee would be
considered if not absent. A promotion
based on this consideration is effective
on the date it would have been effective
if the employee were not absent.
(b) When the position of an employee
who is absent on detail or transfer to an
international organization is upgraded
during the employee’s absence, the
employing agency must place the
employee in the upgraded position
upon return.
(c) The employing agency must
consider an employee who is detailed or
transferred to an international
organization from an ungraded pay
system for all pay increases for which
the employee would have been
considered if not absent. An increase is
effective on the date it would have been
effective if the employee were not
absent.
[FR Doc. E8–26009 Filed 10–30–08; 8:45 am]
BILLING CODE 6325–39–P
OFFICE OF PERSONNEL
MANAGEMENT
5 CFR Part 537
RIN 3206–AK51
Repayment of Student Loans
Office of Personnel
Management.
ACTION: Final rule.
AGENCY:
(a) When an agency fails to reemploy
an employee within 30 days of receiving
the employee’s application, it must
notify the employee, in writing, of the
reasons and of the employee’s right to
appeal to the Merit Systems Protection
Board under the provisions of the
Board’s regulations. The agency must
comply with the provisions of § 1201.21
of this title.
(b) If the agency fails to reach and
issue a decision to the employee within
30 days from the date of the application
for reemployment, the employee is
entitled to appeal the agency’s failure to
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SUMMARY: The U.S. Office of Personnel
Management is issuing final regulations
to revise the rules governing the
authority to offer student loan
repayment benefits to Federal job
candidates or current Federal employees
when necessary to recruit or retain
highly qualified personnel. These
revisions include certain policy changes
and clarifications to assist agencies in
the administration of the Federal
student loan repayment program.
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The regulations are effective
December 1, 2008.
FOR FURTHER INFORMATION CONTACT:
Mark Harrington by telephone at (202)
606–2858; by fax at (202) 606–0824; or
by e-mail at pay-performancepolicy@opm.gov.
DATES:
On
January 9, 2007, the U.S. Office of
Personnel Management (OPM)
published proposed regulations (72 FR
914) to revise the rules implementing 5
U.S.C. 5379, which authorizes agencies
to offer student loan repayment benefits
to candidates for Federal jobs or current
Federal employees when necessary to
recruit or retain highly qualified
personnel. The primary purpose of the
revision was to make part 537 more
readable and usable. However, we have
also made substantive changes that will
improve the agencies’ program
administration and promote alignment
between this authority and related
authorities that support recruitment and
retention efforts.
The 60-day comment period for the
proposed regulations ended on March
12, 2007. During the comment period,
OPM received comments from four
Federal agencies, one union, and two
individuals.
SUPPLEMENTARY INFORMATION:
Definitions
An agency recommended we clarify
the definition of student loan repayment
benefit in § 537.102 by adding a
reference to § 537.106(b), which
describes student loans that qualify for
repayment. We agree and have added
the reference.
We also have made two additional
minor revisions in the definitions
section. Specifically, we have added
language clarifying that the definitions
in § 537.102 apply only for purposes of
part 537. We also have revised the
definition of time-limited appointment
to refer to a ‘‘non-permanent
appointment’’ rather than an
‘‘appointment of temporary duration’’ to
ensure there is no confusion with the
use of the term ‘‘temporary’’ in other
regulations (e.g., 5 CFR part 316, subpart
D).
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Comment on Authorizing Student Loan
Repayment Benefits To Retain an
Employee Likely To Leave for a
Different Position in the Federal Service
One agency commented on proposed
§ 537.105(a)(2)(ii), which requires an
agency to make a written determination
that an employee would otherwise be
likely to leave the agency for
employment outside the Federal service
and that it is essential to retain the
employee based on the employee’s high
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or unique qualifications or a special
need of the agency before authorizing
student loan repayment benefits to
retain a current agency employee. The
agency recommended we remove the
requirement that the employee be likely
to leave for employment outside the
Federal service to permit agencies to
offer student loan repayment benefits to
retain an employee likely to leave for a
different position in the Federal service.
The agency noted the authorizing
statute does not prohibit agencies from
offering student loan repayment benefits
to current employees who are likely to
leave for a different position in the
Federal service.
Comments on Authorizing Student
Loan Repayment Benefits To Recruit an
Employee From Another Federal
Agency
Two agencies, one union, and one
individual submitted comments in
opposition to proposed § 537.105(c),
which provides that an agency may not
authorize student loan repayment
benefits to recruit an individual from
outside the agency who is currently
employed in the Federal service. One
agency and the union commented that
it is inequitable for a newly appointed
employee to be eligible for student loan
repayment benefits while an employee
transferring from another Federal
agency is not. The agency stated this
provision will make it extremely
difficult for agencies to recruit for
mission-critical positions from other
agencies. The agency also commented
that all Federal agencies compete with
each other for job candidates and each
agency offers different benefits and
opportunities based on various factors,
including budget and certain
flexibilities available solely to the
particular agency. The union asserted
the focus should be on filling the
position with the best qualified
individual, with all the benefit options
open to an agency, regardless of the job
candidate’s current position.
Response to Comments on Authorizing
Student Loan Repayment Benefits To
Retain an Employee Likely To Leave for
a Different Position in the Federal
Service or To Recruit an Employee
From Another Federal Agency
Ensuring agencies have an effective
civilian workforce to achieve their goals
is one of the primary objectives of
strategic human capital management in
the Government. To meet this objective,
agencies must have the necessary
human resources tools to recruit and
retain essential employees to perform
mission-critical work. The student loan
repayment authority is one of several
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tools providing agencies substantial
flexibility to help recruit and retain key
employees.
We carefully considered the
comments recommending the
regulations be amended to provide
agencies with additional flexibility to
authorize student loan repayment
benefits to either retain a current
employee likely to leave for a different
position in the Federal service or to
recruit an individual from outside the
agency who is currently employed in
the Federal service. In determining
whether to provide additional
flexibility, we must balance the
workforce needs of a single agency with
the workforce needs of other agencies.
An employee providing valuable
services to one agency also may possess
the competencies that are valuable to
another agency. We also need to be
cautious when establishing new
flexibilities that have the potential to
result in costly and inefficient
interagency competition.
We have not amended proposed
§ 537.105(a)(2)(ii) to permit agencies to
authorize student loan repayment
benefits to retain an employee likely to
leave for a different position in the
Federal service. We note that this policy
was established at § 537.105(c) in OPM’s
original final regulations on the
repayment of student loans, which were
published on January 11, 2001 (66 FR
2790).
We also have not amended proposed
§ 537.105(c) to permit agencies to
authorize student loan repayment
benefits to recruit an employee from
outside the agency who is currently
employed in the Federal service. While
not previously addressed in OPM’s
regulations, it has been OPM’s
longstanding guidance that agencies
should not use the student loan
repayment authority to recruit current
Federal employees from other agencies.
The legislative history of 5 U.S.C.
5379 indicates Congress intended
student loan repayment benefits to be a
tool used to improve the Federal
Government’s ability to compete for top
college graduates by allowing Federal
agencies to repay the student loans of
those individuals. (See House Report
101–402, February 7, 1990.) The student
loan repayment authority is designed to
be used at an agency’s discretion as part
of a set of flexibilities—including
recruitment incentives under 5 CFR part
575, subpart A, and the superior
qualifications and special needs paysetting authority under 5 CFR 531.212—
allowing agencies to tailor employment
offers to the needs of individual job
candidates to compete with non-Federal
employers for the best and brightest
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personnel. The authority is not intended
to assist agencies in competing with
other Federal agencies for current
Federal employees.
We understand interagency
competition already exists, and some
agencies are disadvantaged because
other agencies have the flexibility to pay
higher salaries or provide other unique
incentives. However, we must balance
single agency needs against the
Governmentwide interest of avoiding
costly and inefficient interagency
competition. If these regulations were to
permit agencies to use student loan
repayment benefits to retain current
employees likely to leave for a different
position in the Federal service and to
recruit current employees from other
agencies, they could result in student
loan repayment bidding wars between
the current and prospective agencies.
We do not intend to discourage
interagency movements, which provide
certain benefits to both Federal agencies
and employees. However, we do not
think it is appropriate for Federal
agencies to use student loan repayment
benefits as a financial incentive to
compete with each other for current
Federal employees.
Request for Clarification Regarding
Advertising a Student Loan Repayment
Program and the Eligibility of
Employees Who Previously Transferred
From Another Federal Agency
One agency asked for clarification
concerning what constitutes recruitment
for the purpose of § 537.105(c). The
agency would like to retain its ability to
advertise its student loan repayment
program and be assured that simply
advertising the program will not be
prohibited. In addition, the agency is
concerned the new provision would
adversely impact the eligibility of an
employee with prior Federal work
experience if he or she otherwise would
be eligible to participate in the agency’s
student loan repayment program.
Although these final regulations
prohibit agencies from authorizing
student loan repayment benefits
expressly to recruit an individual from
outside the agency who is currently
employed in the Federal service, there
is no restriction prohibiting an agency
from advertising its student loan
repayment program as part of a general
recruitment effort. In addition, the
regulations do not prohibit an agency
from offering student loan repayment
benefits to an employee who previously
transferred from another agency. In
other words, an agency may not include
student loan repayment benefits as part
of a job offer in an effort to recruit a
current Federal employee from another
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agency. However, if at some point after
entering the new position the individual
meets the agency’s requirements for
participation in its student loan
repayment program, the agency may
provide student loan repayment benefits
to the employee.
Movement to a Position in a Different
Geographic Location Within the Same
Agency
An agency recommended we revise
the regulations to address a situation in
which an employee receiving student
loan repayment benefits moves to a
position in a different geographic
location within the same agency.
Specifically, the agency suggested
allowing agencies to make a
determination regarding whether to
terminate or continue providing student
loan repayment benefits when an
employee moves to a position in a
different geographic location within the
same agency. The agency stated the
agency component in the new
geographic location may not have the
funds to continue providing student
loan repayment benefits to the employee
and also may not have the same
circumstances to justify providing the
incentive. As provided by § 537.107(a),
a written service agreement may specify
any employment conditions the agency
considers to be appropriate, including
the individual’s position and the duties
he or she is expected to perform, his or
her work schedule, and his or her level
of performance. Also, § 537.107(f)
provides that an agency may include in
a service agreement specific conditions
(in addition to those required by law)
that trigger the loss of eligibility for
student loan repayment benefits and/or
a requirement that the employee
reimburse the agency for student loan
repayment benefits already received.
(Also see §§ 537.108(a)(3) and
537.109(a)(2).) Therefore, the
regulations already provide agencies
with the authority to make student loan
repayment benefits contingent on an
employee working in a position at a
certain geographic location. However, to
address the agency’s comment, we have
amended § 537.107(a) to clarify that an
agency may add language to the service
agreement to make the geographic
location of an employee’s position a
condition of receiving student loan
repayment benefits.
Suitability Determinations
An agency recommended we expand
on § 537.109(b)(1) to add suitability
determinations and failure to complete
a probationary period to the types of
involuntarily separations that trigger a
requirement for an employee to
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64863
reimburse his or her agency for student
loan repayment benefits received. We
agree in part. As provided by
§§ 537.107(f)(2) and 537.109(b)(1), a
service agreement may not require
reimbursement based on an involuntary
separation for reasons other than
misconduct or unacceptable
performance. We have revised
§§ 537.107(f)(2) and 537.109(b)(1) to
also require reimbursement when an
employee is separated involuntarily
prior to the completion of a service
agreement as a result of a negative
suitability determination under 5 CFR
part 731. However, we are not adding
language requiring reimbursement based
on an involuntary separation due to a
failure to complete a probationary
period because we believe such an
action would be considered an
involuntary separation for misconduct
or unacceptable performance, which are
already covered by the regulations.
Comment on Reimbursement
Requirements
One agency questioned whether the
provisions allowing agencies to require
reimbursement for employees who are
removed for poor performance or for
non-suitability exceed the statutory
authority granted to OPM under 5
U.S.C. 5379. We disagree, and for the
reasons explained below, we are not
changing our regulations in
§§ 537.107(f)(2) and 537.109(b)(1).
Section 5379 provides discretionary
authority for agencies to set up
programs for student loan
reimbursement for eligible employees.
(‘‘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’’
(emphasis added). See 5 U.S.C.
5379(b)(1).) Agencies are not required to
set up such programs, and employees
are not entitled to benefits under the
authority. Entitlement begins only after
a written agreement between the agency
and the employee is signed, and the
student loan reimbursement is subject to
‘‘such terms, limitations, or conditions,
as may be mutually agreed to by the
agency and employee concerned.’’ See 5
U.S.C. 5379(b)(2). If agencies decide to
offer the program, there are only three
statutory limitations. First, an agency
may not pay more than $10,000 per
calendar year or $60,000 total in student
loan repayments for an individual
employee (5 U.S.C. 5379(b)(2)). Second,
an agency may not reimburse an
employee for repayments made by the
employee before entering into an
agreement with the agency (5 U.S.C.
5379(b)(3)). Third, an agency must
require reimbursement if the employee
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is involuntarily separated for
misconduct or is voluntarily separated
before the completion of the term of the
agreement, (5 U.S.C. 5379(c)). In
addition, agencies must follow
regulations implemented by OPM under
the authority of 5 U.S.C. 5379(g).
Agencies may not expand a program
to provide for more benefits to
employees than are authorized by
statute. However, where a benefit is
discretionary, agencies may set
conditions, limitations, or terms on the
employee’s eligibility for payment of the
benefit. This is explicitly stated in the
statute. The phrase ‘‘terms, limitations,
or conditions as may be mutually agreed
to by the agency and employee
concerned’’ refers to aspects of the
administration of the program relating
to individual payments. OPM may
properly use its regulatory authority to
mandate that agencies uniformly
include certain terms, limitations, and
conditions in service agreements. (See 5
U.S.C. 5379(g), which allows OPM to
establish ‘‘standards and requirements’’
by regulation to ensure uniformity in
appropriate areas.) We believe that
requiring agencies to condition payment
of the student loan repayment benefit on
the employee’s acceptance of
reimbursement when involuntarily
separated for performance or for nonsuitability is within the letter and the
spirit of the authority given under 5
U.S.C. 5379(b)(2). It is good policy to
require that agencies seek
reimbursement when an employee has
been found unsuitable, engaged in
misconduct, or failed to perform
adequately. In summary, the statute
does not provide entitlement, and
employees are required to sign
agreements with conditions only if they
wish to participate in their agencies’
discretionary programs.
Commissioned Corps Officers of the
Public Health Service
One agency requested that OPM
delegate it the authority to offer student
loan repayment benefits to
Commissioned Corps Officers of the
Public Health Service. However, officers
of the Commissioned Corps are not
covered by the authorizing statute, and
OPM cannot extend eligibility to
Commissioned Corps officers by
regulation. The statute authorizing
student loan repayment benefits, 5
U.S.C. 5379, does not define
‘‘employee.’’ Therefore, the general title
5 definition of employee at 5 U.S.C.
2105 applies to the student loan
repayment authority. As such, proposed
§ 537.102 defines employee as ‘‘an
employee of an agency who satisfies the
definition of the term in 5 U.S.C. 2105.’’
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Under 5 U.S.C. 2105(a), the term
‘‘employee’’ includes officers and
individuals appointed in the ‘‘civil
service.’’ Section 2101(1) of title 5,
United States Code, states that ‘‘the
‘civil service’ consists of all appointive
positions in the executive, judicial, and
legislative branches of the Government
of the United States, except positions in
the uniformed services.’’ Under 5 U.S.C.
2101(3), the term ‘‘uniformed services’’
includes the Commissioned Corps of the
Public Health Service. Officers of the
Commissioned Corps are not employees
under 5 U.S.C. 2105 and thus are not
covered by the student loan repayment
authority in 5 U.S.C. 5379. OPM may
not extend an authority by regulation to
employees who are not covered by the
authorizing statute.
Other Comments
An individual provided a comment
generally opposing the authority for
Federal agencies to repay student loans.
We disagree. One of the biggest
challenges for Federal agencies is
attracting and retaining well-qualified,
high-performing employees. We believe
the student loan repayment authority is
a valuable human capital management
tool that enables agencies to recruit
highly qualified candidates into Federal
service and keep talented employees in
the Federal workforce.
A union recommended the sections
pertaining to benefit caps and employee
eligibility be looked at with an eye
towards increasing the maximum total
student loan repayment benefit. The
union noted student loan debt burdens
are continuously increasing and
requested that wherever possible, efforts
be made to give agencies the option of
offering greater benefits to recruit and
retain excellent employees. Under 5
U.S.C. 5379(b)(2), an agency may
provide student loan repayment benefits
of up to $10,000 for an employee in any
calendar year up to an aggregate total of
$60,000 for any one employee. An
increase in the annual or aggregate
limits on student loan repayment
benefits would require a statutory
amendment. We note that the Federal
Employee Student Loan Assistance Act
(Pub. L. 108–123, November 11, 2003)
increased the maximum amounts
Federal agencies are authorized to repay
under the Federal student loan
repayment program from $6,000 to
$10,000 per employee in any calendar
year and from $40,000 to a total of
$60,000 for any one employee. On April
20, 2004, OPM published a final rule (69
FR 21039) to revise § 537.106(c) in
accordance with the statutory
amendment.
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An agency recommended expanding
on § 537.106(a)(4) to emphasize that an
agency should not begin making loan
payments prior to the time the employee
starts work under any circumstances.
We have not made this recommended
change because we believe the
paragraph is sufficiently clear that
although an agency and a job candidate
may sign a service agreement before the
job candidate begins serving in the
position, the agency may not begin
making loan payments until the job
candidate actually begins serving in the
position. However, we are adding a
reference to § 537.107, which contains
the regulations regarding service
agreements.
An agency suggested that in order to
differentiate between paragraphs (1) and
(2) of 5 CFR 537.107(d), paragraph (1)
should be revised to read as follows:
‘‘Earlier than the date the service
agreement is signed, for individuals who
are current employees’’ (emphasis
added). We do not believe this change
is necessary. Because we have written
the phrase in the negative and use the
conjunction ‘‘or’’ between paragraphs
(1) and (2), both conditions must be met.
An agency suggested that even though
5 U.S.C. 5379(c)(2) allows agencies to
waive the reimbursement of student
loan repayments already made by an
agency if the employee enters into the
service of another agency, OPM should
consider making such reimbursement a
requirement. We disagree and are not
changing 5 CFR 537.107(e). We believe
that agencies should be allowed to make
their own decisions regarding the
granting of a waiver of recovery of
already paid benefits.
Finally, an agency points out that
under 5 CFR 537.110(a), records kept
under the Program may be destroyed
when 3 years have elapsed since the end
of the service period, but that a longer
record retention period may be
necessary where potential litigation is
involved (i.e., if there has been a default
of the service agreement and the agency
engages in debt collection). We agree
and are making the necessary changes to
that section.
E.O. 12866, Regulatory Review
This rule has been reviewed by the
Office of Management and Budget in
accordance with E.O. 12866.
Regulatory Flexibility Act
I certify that these regulations would
not have a significant economic impact
on a substantial number of small entities
because they would apply only to
Federal agencies and employees.
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List of Subjects in 5 CFR Part 537
Administrative practice and
procedure, Government employees,
Students, Wages.
Office of Personnel Management.
Michael W. Hager,
Acting Director.
Accordingly, OPM is revising 5 CFR
part 537 to read as follows:
■
PART 537—REPAYMENT OF STUDENT
LOANS
Sec.
537.101 Purpose.
537.102 Definitions.
537.103 Agency student loan repayment
plans.
537.104 Employee eligibility.
537.105 Criteria for payment.
537.106 Conditions and procedures for
providing student loan repayment
benefits.
537.107 Service agreements.
537.108 Loss of eligibility for student loan
repayment benefits.
537.109 Employee reimbursements to the
Government.
537.110 Records and reports.
Authority: 5 U.S.C. 5379(g).
§ 537.101
Purpose.
This part implements 5 U.S.C. 5379,
which authorizes agencies to establish a
student loan repayment program for the
purpose of recruiting or retaining highly
qualified personnel. Under such a
program, an agency may agree to repay
(by direct payment to the loan holder on
behalf of the employee) all or part of any
outstanding qualifying student loan or
loans previously taken out by a job
candidate to whom an offer of
employment has been made, or by a
current employee of the agency.
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§ 537.102
Definitions.
The definitions in this section apply
only to part 537. In this part:
Agency has the meaning given that
term in subparagraphs (A) through (E) of
5 U.S.C. 4101(1).
Authorized agency official means the
head of an Executive agency or an
official who is authorized to act for the
head of the agency in the matter
concerned.
Employee means an employee of an
agency who satisfies the definition of
the term in 5 U.S.C. 2105.
Loan payment means the net payment
made by an agency to the holder of a
student loan (after deducting any tax
withholdings that may be made from the
gross student loan repayment benefit
credited to the employee).
Service agreement means a written
agreement between an agency and an
employee (or job candidate) under
which the employee (or job candidate)
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agrees to a specified period of service in
exchange for student loan repayment
benefits, subject to the conditions set
forth under this part.
Student loan means—
(1) A loan made, insured, or
guaranteed under parts B, D or E of title
IV of the Higher Education Act of 1965;
or
(2) 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.
Student loan repayment benefit
means the benefit provided to an
employee under this part in which an
agency repays (by a direct payment on
behalf of the employee) a qualifying
student loan as described in
§ 537.106(b) previously taken out by
such employee. The dollar value of this
benefit is the gross amount credited to
the employee at the time of a loan
payment to the holder of the student
loan, before deducting any employee tax
withholdings from that gross amount as
described in § 537.106(a)(6)(iii). A
student loan repayment benefit is not
considered basic pay for any purpose.
Time-limited appointment means a
non-permanent appointment
including—
(1) A temporary appointment under 5
CFR part 316, subpart D, or similar
authority;
(2) A term appointment under 5 CFR
part 316, subpart C, or similar authority;
(3) An overseas limited appointment
with a time limitation under 5 CFR part
301, subpart B;
(4) A limited term or limited
emergency appointment in the Senior
Executive Service, as defined in 5 U.S.C.
3132(a), or an equivalent appointment
made for similar purposes;
(5) A Veterans Recruitment
Appointment under 5 CFR part 307;
(6) A Presidential Management Fellow
appointment under 5 CFR 213.3102(ii)
and 5 CFR 213.3102(jj);
(7) A Federal Career Intern
appointment under 5 CFR 213.3202(o);
and
(8) An appointment under the
fellowship and similar programs
authority at 5 CFR 213.3102(r).
§ 537.103
plans.
Agency student loan repayment
Before providing student loan
repayment benefits under this part, an
agency must establish a student loan
repayment plan. This plan must include
the following elements:
(a) The designation of officials with
authority to review and approve offering
student loan repayment benefits (which
may parallel the approval delegations
used for other recruitment, relocation,
and retention incentives);
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64865
(b) The situations in which the
student loan repayment authority may
be used;
(c) The criteria to meet or consider in
authorizing student loan repayment
benefits, including criteria for
determining the size and timing of the
loan payment(s);
(d) A system for selecting employees
(or job candidates) to receive student
loan repayment benefits that ensures
fair and equitable treatment;
(e) The requirements associated with
service agreements (including a basis for
determining the length of service to be
required if it is greater than the statutory
minimum);
(f) The procedures for making loan
payments;
(g) The provisions for recovering any
amount outstanding from an employee
who fails to satisfy a service agreement
and conditions for waiving an
employee’s obligation to reimburse the
agency for payments made under this
part; and
(h) Documentation and recordkeeping
requirements sufficient to allow
reconstruction of each action to approve
a student loan repayment benefit.
§ 537.104
Employee eligibility.
(a) Subject to the conditions in 5
U.S.C. 5379 and this part, an authorized
agency official may approve student
loan repayment benefits to recruit a
highly qualified job candidate or retain
a highly qualified employee who,
during the service period established
under a service agreement (consistent
with § 537.107), will be serving under—
(1) An appointment other than a timelimited appointment; or
(2) A time-limited appointment if—
(i) The employee (or job candidate)
will have at least 3 years remaining
under the appointment after the
beginning of the service period
established under a service agreement;
or
(ii) The time-limited appointment
authority leads to conversion to another
appointment of sufficient duration so
that his or her employment with the
agency is projected to last for at least 3
additional years after the beginning of
the service period established under a
service agreement.
(b) An employee occupying a position
that is excepted from the competitive
service because of its confidential,
policy-determining, policy-making, or
policy-advocating character is ineligible
for student loan repayment benefits.
(c) An employee becomes ineligible
for student loan repayment benefits
under the conditions described in
§ 537.108.
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§ 537.105
Federal Register / Vol. 73, No. 212 / Friday, October 31, 2008 / Rules and Regulations
Criteria for payment.
(a) General criteria. Before authorizing
student loan repayment benefits for an
employee (or job candidate), an agency
must make a written determination
that—
(1) The employee (or job candidate) is
highly qualified and otherwise eligible
(as described in § 537.104); and
(2)(i) In a case where the
authorization is granted to recruit a job
candidate to fill an agency position, the
agency otherwise would encounter
difficulty in filling a position with a
highly qualified individual; or
(ii) In a case where the authorization
is granted to retain a current employee
of the agency, the employee otherwise is
likely to leave the agency for
employment outside the Federal service
and it is essential to retain the employee
based on the employee’s high or unique
qualifications or a special need of the
agency.
(b) Retention considerations. In
making a determination under
paragraph (a)(2)(ii) of this section, an
agency must consider the extent to
which the employee’s departure would
affect the agency’s ability to carry out an
activity or perform a function that is
deemed essential to its mission.
(c) Current Federal employees. An
agency may not authorize student loan
repayment benefits to recruit an
individual from outside the agency who
is currently employed in the Federal
service.
(d) Selecting employees. When
selecting employees (or job candidates)
to receive student loan repayment
benefits, agencies must ensure that
benefits are awarded without regard to
political affiliation, race, color, religion,
national origin, sex, marital status, age,
or handicapping condition.
ebenthall on PROD1PC60 with RULES
§ 537.106 Conditions and procedures for
providing student loan repayment benefits.
(a) General conditions. (1) Student
loan repayment benefits may be
provided at the discretion of the agency
and are subject to such terms,
limitations, or conditions as may be
mutually agreed to in writing by the
agency and the employee (or job
candidate) as part of a service agreement
under § 537.107.
(2) The student loan to be repaid must
be a qualifying student loan as set forth
in paragraph (b) of this section.
(3) The agency must document in
writing each approval of student loan
repayment benefits. An authorized
agency official must review and approve
each written determination. The written
determination must show the employee
(or job candidate) meets the criteria
specified in § 537.105.
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(4) An authorized agency official must
approve student loan repayment
benefits in connection with a
recruitment action before the job
candidate actually enters on duty in the
position for which he or she was
recruited. The agency and the job
candidate may sign the service
agreement consistent with § 537.107
before the job candidate begins serving
in the position, but the agency may not
begin making loan payments until the
job candidate begins serving in the
position.
(5) Student loan repayment benefits
are in addition to basic pay and any
other form of compensation otherwise
payable to the employee involved.
(6) Appropriate tax withholdings
must be deducted or applied at the time
any payment is made. Since these tax
implications could create a financial
hardship for the recipient of the student
loan repayment benefit, agencies may
lessen the impact of tax withholdings on
an employee’s paycheck in one of the
following ways:
(i) Make smaller payments at periodic
intervals throughout the year, rather
than issue payments under this part in
one lump sum;
(ii) Allow the employee to write a
check to the agency to cover his or her
tax liability, rather than have the tax
liability withheld from the employee’s
paycheck;
(iii) Deduct the amount of taxes to be
withheld from the student loan
repayment benefit before the balance is
issued as a loan payment to the holder
of the loan.
Note to § 537.106(a)(6): Contact the
Internal Revenue Service for further details
concerning these options, as well as the tax
withholding implications of payments under
this part.
(b) Qualifying student loans. (1) The
agency may make loan payments only
for student loan debts that are
outstanding at the time the agency and
the employee (or job candidate) enter
into a service agreement. Before
authorizing loan payments, an agency
must verify with the holder of the loan
that the employee (or job candidate) has
an outstanding student loan that
qualifies for repayment under this part.
The agency must verify remaining
balances to ensure that loans are not
overpaid.
(2) The agency may repay more than
one loan if the employee’s student loan
repayment benefit does not exceed the
limits set forth in paragraph (c) of this
section.
(3) These regulations do not impose a
limit on the age of a student loan for
qualification purposes. The agency may,
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however, specify in its agency plan that
only student loans made within a
certain timeframe are eligible for
repayment.
(c) Benefit amount. (1) In determining
the amount of student loan repayment
benefits to approve, an agency must
consider the employee’s (or job
candidate’s) value to the agency and
how far in advance the agency is
permitted to commit funds. If an agency
decides to make additional student loan
repayment benefits contingent on
budget levels or other factors, it must
address these contingent benefits in the
written service agreement as described
in § 537.107(a).
(2) The amount of student loan
repayment benefits provided by an
agency is subject to both of the
following limits:
(i) $10,000 per employee per calendar
year; and
(ii) A total of $60,000 per employee.
(3) In applying the limits in paragraph
(c)(2) of this section, the agency must
count the full student loan repayment
benefit (i.e., before deducting any tax
withholdings as described in paragraph
(a)(6)(iii) of this section).
(d) Employee responsibility. Loan
payments made by an agency under this
part do not exempt an employee from
his or her responsibility and/or liability
for any loan(s) the individual has taken
out. The employee also is responsible
for any income tax obligations resulting
from the student loan repayment
benefit.
§ 537.107
Service agreements.
(a) Before an employing agency makes
any loan payments for an employee, the
employee (or job candidate) must sign a
written service agreement to complete a
specified period of service with the
agency and to reimburse the agency for
the student loan repayment benefit
when required by § 537.109. The service
agreement also may specify any other
employment conditions the agency
considers to be appropriate, including
the employee’s (or job candidate’s)
position and the duties he or she is
expected to perform, his or her work
schedule, his or her level of
performance, and the geographic
location of his or her position. (See
§§ 537.108 and 537.109.) The service
agreement may address the possibility
that, during the period the agreement is
in effect, the agency may modify the
agreement to provide student loan
repayment benefits in addition to those
fixed in the agreement based on
contingencies or conditions specified in
the agreement.
(b) The minimum period of service to
be established under a service
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agreement is 3 years, regardless of the
amount of student loan repayment
benefits authorized. The agency and the
employee may mutually agree to modify
an existing service agreement, subject to
the limitations at § 537.106(c)(2), to
provide additional student loan
repayment benefits for additional
service without the need for an entirely
new service agreement (which would
require a new 3-year minimum service
period). Periods of leave without pay, or
other periods during which the
employee is not in a pay status, do not
count toward completion of the required
service period. Thus, the service
completion date must be extended by
the total amount of time spent in nonpay status. However, as provided by 5
CFR 353.107, absence because of
uniformed service or compensable
injury is considered creditable toward
the required service period upon
reemployment.
(c) A service agreement made under
this part in no way constitutes a
promise of, or right or entitlement to,
appointment, continued employment, or
noncompetitive conversion to the
competitive service. This condition
should be stated in the service
agreement.
(d) The service period begins on the
date specified in the service agreement.
That beginning date may not be—
(1) Earlier than the date the service
agreement is signed; or
(2) Earlier than the date the individual
begins serving in the position for which
he or she was recruited (when student
loan repayment benefits are approved to
recruit a job candidate to fill an agency
position).
(e) The service agreement must
contain a provision addressing whether
the individual would be required to
reimburse the paying agency for student
loan repayment benefits if he or she
voluntarily separates from the paying
agency to work for another agency
before the end of the service period.
(See § 537.109(b)(2).)
(f) The agency may include in a
service agreement specific conditions
(in addition to those required by law)
that trigger the loss of eligibility for
student loan repayment benefits and/or
a requirement that the employee
reimburse the agency for student loan
repayment benefits already received.
(See §§ 537.108(a)(3) and 537.109(a)(2).)
However, a service agreement may not
require reimbursement based on—
(1) An employee’s failure to maintain
performance at a particular level (unless
the employee is separated based on
unacceptable performance); or
(2) An involuntary separation for
reasons other than misconduct,
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13:44 Oct 30, 2008
Jkt 217001
unacceptable performance, or a negative
suitability determination under 5 CFR
part 731 (e.g., an involuntary separation
resulting from a reduction in force or
medical reasons).
§ 537.108 Loss of eligibility for student
loan repayment benefits.
(a) An employee receiving student
loan repayment benefits from an agency
is ineligible for continued benefits from
that agency if the employee—
(1) Separates from the agency;
(2) Does not maintain an acceptable
level of performance, as determined
under standards and procedures
prescribed by the agency; or
(3) Violates a condition in the service
agreement, if the agreement specifically
provides that eligibility is lost when the
condition is violated.
(b) For the purpose of applying
paragraph (a)(2) of this section, an
acceptable level of performance is one
that is equivalent to level 3 (‘‘Fully
Successful’’ or equivalent) or higher, as
described in 5 CFR 430.208(d). An
employee loses eligibility for student
loan repayment benefits if his or her
most recent official performance
evaluation does not meet this
requirement.
§ 537.109 Employee reimbursements to
the Government.
(a) An employee is indebted to the
Federal Government and must
reimburse the paying agency for the
amount of any student loan repayment
benefits received under a service
agreement if he or she—
(1) Fails to complete the period of
service required in the applicable
service agreement (except as provided
by paragraph (b) of this section); or
(2) Violates any other condition that
specifically triggers a reimbursement
requirement under the agreement.
(b) An agency may not apply
paragraph (a) of this section based on an
employee’s failure to complete the
required period of service established
under a service agreement if—
(1) The employee is involuntarily
separated for reasons other than
misconduct, unacceptable performance,
or a negative suitability determination
under 5 CFR part 731; or
(2) The employee leaves the paying
agency voluntarily to enter into the
service of any other agency, unless
reimbursement to the agency is
otherwise required in the service
agreement, as provided by § 537.107(e).
(c) If an agency and an employee
mutually agree to modify an existing
service agreement to provide additional
student loan repayment benefits for
additional service (as provided by
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64867
§ 537.107(b)), the modified service
agreement may stipulate that, if the
employee completes the initial service
period but fails to complete the
additional service period, he or she is
required to reimburse the paying agency
only for the amount of any student loan
repayment benefits received during the
additional service period.
(d) If an employee fails to reimburse
the paying agency for the amount owed
under paragraph (a) of this section, a
sum equal to the amount outstanding is
recoverable from the employee under
the agency’s regulations for collection
by offset from an indebted Government
employee under 5 U.S.C. 5514 and 5
CFR part 550, subpart K, or through the
appropriate provisions governing
Federal debt collection if the individual
is no longer a Federal employee.
(e) An authorized agency official may
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. (See 5 U.S.C.
5379(c)(3).)
(f) Any amount reimbursed by, or
recovered from, an employee under this
section must be credited to the
appropriation account from which the
amount involved was originally paid.
Any amount so credited must be merged
with other sums in such account and
must be available for the same purposes
and time period, and subject to the same
limitations (if any), as the sums with
which merged. (See 5 U.S.C. 5379(c)(4).)
§ 537.110
Records and reports.
(a) Each agency must keep a record of
each determination to provide student
loan repayment benefits under this part
and make such records available for
review upon request by OPM. Such a
record may be destroyed when 3 years
have elapsed since the end of the
service period specified in the
employee’s service agreement unless
any dispute has arisen regarding the
agreement. If the service agreement has
not been fulfilled, there are other
disputes regarding the agreement or the
loan payouts, or the agreement has
become the subject of litigation, the
records should be kept until the agency
is notified by agency counsel that all
pending claims have been resolved, all
litigation concluded, and any applicable
periods for seeking further review has
elapsed and, in any event, for a
minimum of 6 years from the date the
facts giving rise to the dispute occurred.
If debt collection is pursued against the
employee for repayments made by the
agency, the agency must keep the
records until the agency is notified by
agency counsel that the debt is fully
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Federal Register / Vol. 73, No. 212 / Friday, October 31, 2008 / Rules and Regulations
collected, compromised, or settled
finally and that any applicable period
for seeking further review has elapsed.
(b) By March 31st of each year, each
agency must submit a written report to
OPM containing information about
student loan repayment benefits it
provided to employees during the
previous calendar year. Each report
must include the following information:
(1) The number of employees who
received student loan repayment
benefits;
(2) The job classifications of the
employees who received student loan
repayment benefits; and
(3) The cost to the Federal
Government of providing student loan
repayment benefits.
[FR Doc. E8–26013 Filed 10–30–08; 8:45 am]
BILLING CODE 6325–39–P
DEPARTMENT OF AGRICULTURE
Agricultural Marketing Service
7 CFR Parts 1140 and 1145
[Docket No. AMS–DA–08–0031; DA–08–05]
RIN 0581–AC86
Dairy Forward Pricing Program
Agricultural Marketing Service,
USDA.
ACTION: Final rule.
AGENCY:
SUMMARY: This final rule establishes a
program for producers and cooperative
associations of producers to voluntarily
enter into forward price contracts with
handlers for milk used for Class II, III,
or IV purposes under the Agricultural
Marketing Agreement Act of 1937
(AMAA). The program allows handlers
regulated under the Federal milk
marketing order program to pay
producers and cooperative associations
in accordance with the terms of a
forward contract and not have to pay the
minimum Federal order blend price for
milk. This program is established in
accordance with section 1502 of the
Food, Conservation and Energy Act of
2008 (2008 Farm Bill).
DATES: Effective Date: November 3,
2008.
John
R. Mengel, Chief Economist, USDA/
AMS/Dairy Programs, Office of the
Chief Economist, STOP 0229–Room
2753, 1400 Independence Ave., SW.,
Washington, DC 20250–0229, (202) 720–
4664, e-mail address:
john.mengel@usda.gov.
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FOR FURTHER INFORMATION CONTACT:
This rule
implements a program for producers
SUPPLEMENTARY INFORMATION:
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13:44 Oct 30, 2008
Jkt 217001
and cooperative associations of
producers to enter into forward price
contracts with handlers for Class II, III,
or IV milk under the AMAA. This
program is required to be established by
the 2008 Farm Bill. The program
authorizes that under the AMAA, milk
handlers pay producers or cooperative
associations of producers a negotiated
price, rather than the Federal order
minimum blend price for producer milk
if subject to conditions and terms of a
forward contract, provided the volume
of such milk does not exceed the
handler’s Class II, III, and IV utilization
for the month on the order that regulates
the milk. The program applies to
producer milk regulated under Federal
milk marketing orders that is not
classified as Class I milk or milk
otherwise intended for fluid use and
that is in the current of interstate or
foreign commerce or directly burdens,
obstructs, or affects interstate or foreign
commerce of Federally regulated milk.
The Federal milk marketing order
program consists of 10 Federal milk
marketing orders (7 CFR 1001–1135). In
accordance with the 2008 Farm Bill, the
program prohibits forward contracts
under the program from being entered
into after September 30, 2012, and no
forward contracts entered into under the
program may extend beyond September
30, 2015.
Background
The Consolidated Appropriations Act
of 2000 amended the Agricultural
Marketing Agreement Act of 1937 1 to
mandate the implementation of a Dairy
Forward Pricing Pilot Program (DFPPP)
through December 31, 2004. The law
allowed proprietary handlers, and
cooperative associations acting as milk
handlers with respect to non-member
milk, regulated under the Federal milk
marketing order program to forward
contract for deliveries of milk from
producers or cooperative associations of
producers at prices exempt from
minimum Federal milk marketing order
blend prices.2 The 2000 Act required
that the Department conduct a study on
the DFPPP to be submitted to Congress
concerning impacts on milk prices paid
to producers.3 The study, covering the
1 Section 23 of the Agricultural Adjustment Act
(7 U.S.C. 601 et seq.), reenacted with amendments
by the Agricultural Marketing Agreement Act of
1937, as enacted by Public Law 106–113 (113 Stat.
1501A–519).
2 See Final Rule for Dairy Forward Pricing Pilot
Program, July 18, 2000; 65 FR 44408; 7 CFR Part
1140.
3 See A Study of the Dairy Forward Pricing Pilot
Program and Its Effect on Prices Paid to Producers
for Milk, October 31, 2002. Prepared for the Senate
Committee on Agriculture, Nutrition and Forestry
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Sfmt 4700
period from September 2000 to March
2002, indicated that participation in the
DFPPP was relatively small in terms of
numbers of producers, handlers, and
milk quantities. On a monthly average
basis, 3.9 percent of eligible producers,
5.7 percent of proprietary
manufacturing plants, and 5.3 percent of
pooled milk received from eligible
producers participated. The study
concluded the DFPPP to be effective in
reducing price volatility. The average
monthly price received for contract milk
was $14.02, ranging from a low of
$13.23 to a high of $14.86. The average
monthly price of the same milk, had it
not been under contract, was $14.51,
ranging from a low of $12.04 to a high
of $17.75. Thus, the study concluded
that price volatility was substantially
reduced for producers and handlers that
participated in the Program. Subsequent
reports published by the Department,
covering the entire period of the
Program from September 2000 through
December 2004, indicated results that
were consistent with conclusions of the
report submitted to Congress. The study
and the final report on the DFPPP can
be found at https://www.ams.usda.gov/
dairy.
This Final Rule removes the
regulations covering the DFPPP that
appeared in 7 CFR Part 1140, (7 U.S.C.
601 et seq.; as amended by section
1001(a)(8) of Public Law 106–113) and
establishes a new 7 CFR Part 1145, as
mandated by the 2008 Farm Bill.
The program does not invalidate,
supersede, or otherwise change any
existing contractual agreements between
handlers and producers. Contracts
eligible under this program are those
contracts beginning no earlier than the
effective date of this final rule.
Executive Order 12866
This rule has been determined to be
not significant for purposes of Executive
Order 12866, and therefore has not been
reviewed by the Office of Management
and Budget.
Executive Order 12988
This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. It is not intended to have a
retroactive effect. The adopted
amendments do not preempt any state
or local laws, regulations, or policies,
unless they present an irreconcilable
conflict with this rule. There are no
administrative procedures which must
be exhausted prior to judicial challenge
to the provisions of this rule.
and the House Committee on Agriculture; https://
www.ams.usda.gov/dairy.
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]]>Agencies
[Federal Register Volume 73, Number 212 (Friday, October 31, 2008)]
[Rules and Regulations]
[Pages 64861-64868]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26013]
-----------------------------------------------------------------------
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 537
RIN 3206-AK51
Repayment of Student Loans
AGENCY: Office of Personnel Management.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The U.S. Office of Personnel Management is issuing final
regulations to revise the rules governing the authority to offer
student loan repayment benefits to Federal job candidates or current
Federal employees when necessary to recruit or retain highly qualified
personnel. These revisions include certain policy changes and
clarifications to assist agencies in the administration of the Federal
student loan repayment program.
[[Page 64862]]
DATES: The regulations are effective December 1, 2008.
FOR FURTHER INFORMATION CONTACT: Mark Harrington by telephone at (202)
606-2858; by fax at (202) 606-0824; or by e-mail at pay-performance-
policy@opm.gov.
SUPPLEMENTARY INFORMATION: On January 9, 2007, the U.S. Office of
Personnel Management (OPM) published proposed regulations (72 FR 914)
to revise the rules implementing 5 U.S.C. 5379, which authorizes
agencies to offer student loan repayment benefits to candidates for
Federal jobs or current Federal employees when necessary to recruit or
retain highly qualified personnel. The primary purpose of the revision
was to make part 537 more readable and usable. However, we have also
made substantive changes that will improve the agencies' program
administration and promote alignment between this authority and related
authorities that support recruitment and retention efforts.
The 60-day comment period for the proposed regulations ended on
March 12, 2007. During the comment period, OPM received comments from
four Federal agencies, one union, and two individuals.
Definitions
An agency recommended we clarify the definition of student loan
repayment benefit in Sec. 537.102 by adding a reference to Sec.
537.106(b), which describes student loans that qualify for repayment.
We agree and have added the reference.
We also have made two additional minor revisions in the definitions
section. Specifically, we have added language clarifying that the
definitions in Sec. 537.102 apply only for purposes of part 537. We
also have revised the definition of time-limited appointment to refer
to a ``non-permanent appointment'' rather than an ``appointment of
temporary duration'' to ensure there is no confusion with the use of
the term ``temporary'' in other regulations (e.g., 5 CFR part 316,
subpart D).
Comment on Authorizing Student Loan Repayment Benefits To Retain an
Employee Likely To Leave for a Different Position in the Federal
Service
One agency commented on proposed Sec. 537.105(a)(2)(ii), which
requires an agency to make a written determination that an employee
would otherwise be likely to leave the agency for employment outside
the Federal service and that it is essential to retain the employee
based on the employee's high or unique qualifications or a special need
of the agency before authorizing student loan repayment benefits to
retain a current agency employee. The agency recommended we remove the
requirement that the employee be likely to leave for employment outside
the Federal service to permit agencies to offer student loan repayment
benefits to retain an employee likely to leave for a different position
in the Federal service. The agency noted the authorizing statute does
not prohibit agencies from offering student loan repayment benefits to
current employees who are likely to leave for a different position in
the Federal service.
Comments on Authorizing Student Loan Repayment Benefits To Recruit an
Employee From Another Federal Agency
Two agencies, one union, and one individual submitted comments in
opposition to proposed Sec. 537.105(c), which provides that an agency
may not authorize student loan repayment benefits to recruit an
individual from outside the agency who is currently employed in the
Federal service. One agency and the union commented that it is
inequitable for a newly appointed employee to be eligible for student
loan repayment benefits while an employee transferring from another
Federal agency is not. The agency stated this provision will make it
extremely difficult for agencies to recruit for mission-critical
positions from other agencies. The agency also commented that all
Federal agencies compete with each other for job candidates and each
agency offers different benefits and opportunities based on various
factors, including budget and certain flexibilities available solely to
the particular agency. The union asserted the focus should be on
filling the position with the best qualified individual, with all the
benefit options open to an agency, regardless of the job candidate's
current position.
Response to Comments on Authorizing Student Loan Repayment Benefits To
Retain an Employee Likely To Leave for a Different Position in the
Federal Service or To Recruit an Employee From Another Federal Agency
Ensuring agencies have an effective civilian workforce to achieve
their goals is one of the primary objectives of strategic human capital
management in the Government. To meet this objective, agencies must
have the necessary human resources tools to recruit and retain
essential employees to perform mission-critical work. The student loan
repayment authority is one of several tools providing agencies
substantial flexibility to help recruit and retain key employees.
We carefully considered the comments recommending the regulations
be amended to provide agencies with additional flexibility to authorize
student loan repayment benefits to either retain a current employee
likely to leave for a different position in the Federal service or to
recruit an individual from outside the agency who is currently employed
in the Federal service. In determining whether to provide additional
flexibility, we must balance the workforce needs of a single agency
with the workforce needs of other agencies. An employee providing
valuable services to one agency also may possess the competencies that
are valuable to another agency. We also need to be cautious when
establishing new flexibilities that have the potential to result in
costly and inefficient interagency competition.
We have not amended proposed Sec. 537.105(a)(2)(ii) to permit
agencies to authorize student loan repayment benefits to retain an
employee likely to leave for a different position in the Federal
service. We note that this policy was established at Sec. 537.105(c)
in OPM's original final regulations on the repayment of student loans,
which were published on January 11, 2001 (66 FR 2790).
We also have not amended proposed Sec. 537.105(c) to permit
agencies to authorize student loan repayment benefits to recruit an
employee from outside the agency who is currently employed in the
Federal service. While not previously addressed in OPM's regulations,
it has been OPM's longstanding guidance that agencies should not use
the student loan repayment authority to recruit current Federal
employees from other agencies.
The legislative history of 5 U.S.C. 5379 indicates Congress
intended student loan repayment benefits to be a tool used to improve
the Federal Government's ability to compete for top college graduates
by allowing Federal agencies to repay the student loans of those
individuals. (See House Report 101-402, February 7, 1990.) The student
loan repayment authority is designed to be used at an agency's
discretion as part of a set of flexibilities--including recruitment
incentives under 5 CFR part 575, subpart A, and the superior
qualifications and special needs pay-setting authority under 5 CFR
531.212--allowing agencies to tailor employment offers to the needs of
individual job candidates to compete with non-Federal employers for the
best and brightest
[[Page 64863]]
personnel. The authority is not intended to assist agencies in
competing with other Federal agencies for current Federal employees.
We understand interagency competition already exists, and some
agencies are disadvantaged because other agencies have the flexibility
to pay higher salaries or provide other unique incentives. However, we
must balance single agency needs against the Governmentwide interest of
avoiding costly and inefficient interagency competition. If these
regulations were to permit agencies to use student loan repayment
benefits to retain current employees likely to leave for a different
position in the Federal service and to recruit current employees from
other agencies, they could result in student loan repayment bidding
wars between the current and prospective agencies. We do not intend to
discourage interagency movements, which provide certain benefits to
both Federal agencies and employees. However, we do not think it is
appropriate for Federal agencies to use student loan repayment benefits
as a financial incentive to compete with each other for current Federal
employees.
Request for Clarification Regarding Advertising a Student Loan
Repayment Program and the Eligibility of Employees Who Previously
Transferred From Another Federal Agency
One agency asked for clarification concerning what constitutes
recruitment for the purpose of Sec. 537.105(c). The agency would like
to retain its ability to advertise its student loan repayment program
and be assured that simply advertising the program will not be
prohibited. In addition, the agency is concerned the new provision
would adversely impact the eligibility of an employee with prior
Federal work experience if he or she otherwise would be eligible to
participate in the agency's student loan repayment program.
Although these final regulations prohibit agencies from authorizing
student loan repayment benefits expressly to recruit an individual from
outside the agency who is currently employed in the Federal service,
there is no restriction prohibiting an agency from advertising its
student loan repayment program as part of a general recruitment effort.
In addition, the regulations do not prohibit an agency from offering
student loan repayment benefits to an employee who previously
transferred from another agency. In other words, an agency may not
include student loan repayment benefits as part of a job offer in an
effort to recruit a current Federal employee from another agency.
However, if at some point after entering the new position the
individual meets the agency's requirements for participation in its
student loan repayment program, the agency may provide student loan
repayment benefits to the employee.
Movement to a Position in a Different Geographic Location Within the
Same Agency
An agency recommended we revise the regulations to address a
situation in which an employee receiving student loan repayment
benefits moves to a position in a different geographic location within
the same agency. Specifically, the agency suggested allowing agencies
to make a determination regarding whether to terminate or continue
providing student loan repayment benefits when an employee moves to a
position in a different geographic location within the same agency. The
agency stated the agency component in the new geographic location may
not have the funds to continue providing student loan repayment
benefits to the employee and also may not have the same circumstances
to justify providing the incentive. As provided by Sec. 537.107(a), a
written service agreement may specify any employment conditions the
agency considers to be appropriate, including the individual's position
and the duties he or she is expected to perform, his or her work
schedule, and his or her level of performance. Also, Sec. 537.107(f)
provides that an agency may include in a service agreement specific
conditions (in addition to those required by law) that trigger the loss
of eligibility for student loan repayment benefits and/or a requirement
that the employee reimburse the agency for student loan repayment
benefits already received. (Also see Sec. Sec. 537.108(a)(3) and
537.109(a)(2).) Therefore, the regulations already provide agencies
with the authority to make student loan repayment benefits contingent
on an employee working in a position at a certain geographic location.
However, to address the agency's comment, we have amended Sec.
537.107(a) to clarify that an agency may add language to the service
agreement to make the geographic location of an employee's position a
condition of receiving student loan repayment benefits.
Suitability Determinations
An agency recommended we expand on Sec. 537.109(b)(1) to add
suitability determinations and failure to complete a probationary
period to the types of involuntarily separations that trigger a
requirement for an employee to reimburse his or her agency for student
loan repayment benefits received. We agree in part. As provided by
Sec. Sec. 537.107(f)(2) and 537.109(b)(1), a service agreement may not
require reimbursement based on an involuntary separation for reasons
other than misconduct or unacceptable performance. We have revised
Sec. Sec. 537.107(f)(2) and 537.109(b)(1) to also require
reimbursement when an employee is separated involuntarily prior to the
completion of a service agreement as a result of a negative suitability
determination under 5 CFR part 731. However, we are not adding language
requiring reimbursement based on an involuntary separation due to a
failure to complete a probationary period because we believe such an
action would be considered an involuntary separation for misconduct or
unacceptable performance, which are already covered by the regulations.
Comment on Reimbursement Requirements
One agency questioned whether the provisions allowing agencies to
require reimbursement for employees who are removed for poor
performance or for non-suitability exceed the statutory authority
granted to OPM under 5 U.S.C. 5379. We disagree, and for the reasons
explained below, we are not changing our regulations in Sec. Sec.
537.107(f)(2) and 537.109(b)(1).
Section 5379 provides discretionary authority for agencies to set
up programs for student loan reimbursement for eligible employees.
(``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'' (emphasis added). See 5 U.S.C. 5379(b)(1).) Agencies
are not required to set up such programs, and employees are not
entitled to benefits under the authority. Entitlement begins only after
a written agreement between the agency and the employee is signed, and
the student loan reimbursement is subject to ``such terms, limitations,
or conditions, as may be mutually agreed to by the agency and employee
concerned.'' See 5 U.S.C. 5379(b)(2). If agencies decide to offer the
program, there are only three statutory limitations. First, an agency
may not pay more than $10,000 per calendar year or $60,000 total in
student loan repayments for an individual employee (5 U.S.C.
5379(b)(2)). Second, an agency may not reimburse an employee for
repayments made by the employee before entering into an agreement with
the agency (5 U.S.C. 5379(b)(3)). Third, an agency must require
reimbursement if the employee
[[Page 64864]]
is involuntarily separated for misconduct or is voluntarily separated
before the completion of the term of the agreement, (5 U.S.C. 5379(c)).
In addition, agencies must follow regulations implemented by OPM under
the authority of 5 U.S.C. 5379(g).
Agencies may not expand a program to provide for more benefits to
employees than are authorized by statute. However, where a benefit is
discretionary, agencies may set conditions, limitations, or terms on
the employee's eligibility for payment of the benefit. This is
explicitly stated in the statute. The phrase ``terms, limitations, or
conditions as may be mutually agreed to by the agency and employee
concerned'' refers to aspects of the administration of the program
relating to individual payments. OPM may properly use its regulatory
authority to mandate that agencies uniformly include certain terms,
limitations, and conditions in service agreements. (See 5 U.S.C.
5379(g), which allows OPM to establish ``standards and requirements''
by regulation to ensure uniformity in appropriate areas.) We believe
that requiring agencies to condition payment of the student loan
repayment benefit on the employee's acceptance of reimbursement when
involuntarily separated for performance or for non-suitability is
within the letter and the spirit of the authority given under 5 U.S.C.
5379(b)(2). It is good policy to require that agencies seek
reimbursement when an employee has been found unsuitable, engaged in
misconduct, or failed to perform adequately. In summary, the statute
does not provide entitlement, and employees are required to sign
agreements with conditions only if they wish to participate in their
agencies' discretionary programs.
Commissioned Corps Officers of the Public Health Service
One agency requested that OPM delegate it the authority to offer
student loan repayment benefits to Commissioned Corps Officers of the
Public Health Service. However, officers of the Commissioned Corps are
not covered by the authorizing statute, and OPM cannot extend
eligibility to Commissioned Corps officers by regulation. The statute
authorizing student loan repayment benefits, 5 U.S.C. 5379, does not
define ``employee.'' Therefore, the general title 5 definition of
employee at 5 U.S.C. 2105 applies to the student loan repayment
authority. As such, proposed Sec. 537.102 defines employee as ``an
employee of an agency who satisfies the definition of the term in 5
U.S.C. 2105.'' Under 5 U.S.C. 2105(a), the term ``employee'' includes
officers and individuals appointed in the ``civil service.'' Section
2101(1) of title 5, United States Code, states that ``the `civil
service' consists of all appointive positions in the executive,
judicial, and legislative branches of the Government of the United
States, except positions in the uniformed services.'' Under 5 U.S.C.
2101(3), the term ``uniformed services'' includes the Commissioned
Corps of the Public Health Service. Officers of the Commissioned Corps
are not employees under 5 U.S.C. 2105 and thus are not covered by the
student loan repayment authority in 5 U.S.C. 5379. OPM may not extend
an authority by regulation to employees who are not covered by the
authorizing statute.
Other Comments
An individual provided a comment generally opposing the authority
for Federal agencies to repay student loans. We disagree. One of the
biggest challenges for Federal agencies is attracting and retaining
well-qualified, high-performing employees. We believe the student loan
repayment authority is a valuable human capital management tool that
enables agencies to recruit highly qualified candidates into Federal
service and keep talented employees in the Federal workforce.
A union recommended the sections pertaining to benefit caps and
employee eligibility be looked at with an eye towards increasing the
maximum total student loan repayment benefit. The union noted student
loan debt burdens are continuously increasing and requested that
wherever possible, efforts be made to give agencies the option of
offering greater benefits to recruit and retain excellent employees.
Under 5 U.S.C. 5379(b)(2), an agency may provide student loan repayment
benefits of up to $10,000 for an employee in any calendar year up to an
aggregate total of $60,000 for any one employee. An increase in the
annual or aggregate limits on student loan repayment benefits would
require a statutory amendment. We note that the Federal Employee
Student Loan Assistance Act (Pub. L. 108-123, November 11, 2003)
increased the maximum amounts Federal agencies are authorized to repay
under the Federal student loan repayment program from $6,000 to $10,000
per employee in any calendar year and from $40,000 to a total of
$60,000 for any one employee. On April 20, 2004, OPM published a final
rule (69 FR 21039) to revise Sec. 537.106(c) in accordance with the
statutory amendment.
An agency recommended expanding on Sec. 537.106(a)(4) to emphasize
that an agency should not begin making loan payments prior to the time
the employee starts work under any circumstances. We have not made this
recommended change because we believe the paragraph is sufficiently
clear that although an agency and a job candidate may sign a service
agreement before the job candidate begins serving in the position, the
agency may not begin making loan payments until the job candidate
actually begins serving in the position. However, we are adding a
reference to Sec. 537.107, which contains the regulations regarding
service agreements.
An agency suggested that in order to differentiate between
paragraphs (1) and (2) of 5 CFR 537.107(d), paragraph (1) should be
revised to read as follows: ``Earlier than the date the service
agreement is signed, for individuals who are current employees''
(emphasis added). We do not believe this change is necessary. Because
we have written the phrase in the negative and use the conjunction
``or'' between paragraphs (1) and (2), both conditions must be met.
An agency suggested that even though 5 U.S.C. 5379(c)(2) allows
agencies to waive the reimbursement of student loan repayments already
made by an agency if the employee enters into the service of another
agency, OPM should consider making such reimbursement a requirement. We
disagree and are not changing 5 CFR 537.107(e). We believe that
agencies should be allowed to make their own decisions regarding the
granting of a waiver of recovery of already paid benefits.
Finally, an agency points out that under 5 CFR 537.110(a), records
kept under the Program may be destroyed when 3 years have elapsed since
the end of the service period, but that a longer record retention
period may be necessary where potential litigation is involved (i.e.,
if there has been a default of the service agreement and the agency
engages in debt collection). We agree and are making the necessary
changes to that section.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
Regulatory Flexibility Act
I certify that these regulations would not have a significant
economic impact on a substantial number of small entities because they
would apply only to Federal agencies and employees.
[[Page 64865]]
List of Subjects in 5 CFR Part 537
Administrative practice and procedure, Government employees,
Students, Wages.
Office of Personnel Management.
Michael W. Hager,
Acting Director.
0
Accordingly, OPM is revising 5 CFR part 537 to read as follows:
PART 537--REPAYMENT OF STUDENT LOANS
Sec.
537.101 Purpose.
537.102 Definitions.
537.103 Agency student loan repayment plans.
537.104 Employee eligibility.
537.105 Criteria for payment.
537.106 Conditions and procedures for providing student loan
repayment benefits.
537.107 Service agreements.
537.108 Loss of eligibility for student loan repayment benefits.
537.109 Employee reimbursements to the Government.
537.110 Records and reports.
Authority: 5 U.S.C. 5379(g).
Sec. 537.101 Purpose.
This part implements 5 U.S.C. 5379, which authorizes agencies to
establish a student loan repayment program for the purpose of
recruiting or retaining highly qualified personnel. Under such a
program, an agency may agree to repay (by direct payment to the loan
holder on behalf of the employee) all or part of any outstanding
qualifying student loan or loans previously taken out by a job
candidate to whom an offer of employment has been made, or by a current
employee of the agency.
Sec. 537.102 Definitions.
The definitions in this section apply only to part 537. In this
part:
Agency has the meaning given that term in subparagraphs (A) through
(E) of 5 U.S.C. 4101(1).
Authorized agency official means the head of an Executive agency or
an official who is authorized to act for the head of the agency in the
matter concerned.
Employee means an employee of an agency who satisfies the
definition of the term in 5 U.S.C. 2105.
Loan payment means the net payment made by an agency to the holder
of a student loan (after deducting any tax withholdings that may be
made from the gross student loan repayment benefit credited to the
employee).
Service agreement means a written agreement between an agency and
an employee (or job candidate) under which the employee (or job
candidate) agrees to a specified period of service in exchange for
student loan repayment benefits, subject to the conditions set forth
under this part.
Student loan means--
(1) A loan made, insured, or guaranteed under parts B, D or E of
title IV of the Higher Education Act of 1965; or
(2) 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.
Student loan repayment benefit means the benefit provided to an
employee under this part in which an agency repays (by a direct payment
on behalf of the employee) a qualifying student loan as described in
Sec. 537.106(b) previously taken out by such employee. The dollar
value of this benefit is the gross amount credited to the employee at
the time of a loan payment to the holder of the student loan, before
deducting any employee tax withholdings from that gross amount as
described in Sec. 537.106(a)(6)(iii). A student loan repayment benefit
is not considered basic pay for any purpose.
Time-limited appointment means a non-permanent appointment
including--
(1) A temporary appointment under 5 CFR part 316, subpart D, or
similar authority;
(2) A term appointment under 5 CFR part 316, subpart C, or similar
authority;
(3) An overseas limited appointment with a time limitation under 5
CFR part 301, subpart B;
(4) A limited term or limited emergency appointment in the Senior
Executive Service, as defined in 5 U.S.C. 3132(a), or an equivalent
appointment made for similar purposes;
(5) A Veterans Recruitment Appointment under 5 CFR part 307;
(6) A Presidential Management Fellow appointment under 5 CFR
213.3102(ii) and 5 CFR 213.3102(jj);
(7) A Federal Career Intern appointment under 5 CFR 213.3202(o);
and
(8) An appointment under the fellowship and similar programs
authority at 5 CFR 213.3102(r).
Sec. 537.103 Agency student loan repayment plans.
Before providing student loan repayment benefits under this part,
an agency must establish a student loan repayment plan. This plan must
include the following elements:
(a) The designation of officials with authority to review and
approve offering student loan repayment benefits (which may parallel
the approval delegations used for other recruitment, relocation, and
retention incentives);
(b) The situations in which the student loan repayment authority
may be used;
(c) The criteria to meet or consider in authorizing student loan
repayment benefits, including criteria for determining the size and
timing of the loan payment(s);
(d) A system for selecting employees (or job candidates) to receive
student loan repayment benefits that ensures fair and equitable
treatment;
(e) The requirements associated with service agreements (including
a basis for determining the length of service to be required if it is
greater than the statutory minimum);
(f) The procedures for making loan payments;
(g) The provisions for recovering any amount outstanding from an
employee who fails to satisfy a service agreement and conditions for
waiving an employee's obligation to reimburse the agency for payments
made under this part; and
(h) Documentation and recordkeeping requirements sufficient to
allow reconstruction of each action to approve a student loan repayment
benefit.
Sec. 537.104 Employee eligibility.
(a) Subject to the conditions in 5 U.S.C. 5379 and this part, an
authorized agency official may approve student loan repayment benefits
to recruit a highly qualified job candidate or retain a highly
qualified employee who, during the service period established under a
service agreement (consistent with Sec. 537.107), will be serving
under--
(1) An appointment other than a time-limited appointment; or
(2) A time-limited appointment if--
(i) The employee (or job candidate) will have at least 3 years
remaining under the appointment after the beginning of the service
period established under a service agreement; or
(ii) The time-limited appointment authority leads to conversion to
another appointment of sufficient duration so that his or her
employment with the agency is projected to last for at least 3
additional years after the beginning of the service period established
under a service agreement.
(b) An employee occupying a position that is excepted from the
competitive service because of its confidential, policy-determining,
policy-making, or policy-advocating character is ineligible for student
loan repayment benefits.
(c) An employee becomes ineligible for student loan repayment
benefits under the conditions described in Sec. 537.108.
[[Page 64866]]
Sec. 537.105 Criteria for payment.
(a) General criteria. Before authorizing student loan repayment
benefits for an employee (or job candidate), an agency must make a
written determination that--
(1) The employee (or job candidate) is highly qualified and
otherwise eligible (as described in Sec. 537.104); and
(2)(i) In a case where the authorization is granted to recruit a
job candidate to fill an agency position, the agency otherwise would
encounter difficulty in filling a position with a highly qualified
individual; or
(ii) In a case where the authorization is granted to retain a
current employee of the agency, the employee otherwise is likely to
leave the agency for employment outside the Federal service and it is
essential to retain the employee based on the employee's high or unique
qualifications or a special need of the agency.
(b) Retention considerations. In making a determination under
paragraph (a)(2)(ii) of this section, an agency must consider the
extent to which the employee's departure would affect the agency's
ability to carry out an activity or perform a function that is deemed
essential to its mission.
(c) Current Federal employees. An agency may not authorize student
loan repayment benefits to recruit an individual from outside the
agency who is currently employed in the Federal service.
(d) Selecting employees. When selecting employees (or job
candidates) to receive student loan repayment benefits, agencies must
ensure that benefits are awarded without regard to political
affiliation, race, color, religion, national origin, sex, marital
status, age, or handicapping condition.
Sec. 537.106 Conditions and procedures for providing student loan
repayment benefits.
(a) General conditions. (1) Student loan repayment benefits may be
provided at the discretion of the agency and are subject to such terms,
limitations, or conditions as may be mutually agreed to in writing by
the agency and the employee (or job candidate) as part of a service
agreement under Sec. 537.107.
(2) The student loan to be repaid must be a qualifying student loan
as set forth in paragraph (b) of this section.
(3) The agency must document in writing each approval of student
loan repayment benefits. An authorized agency official must review and
approve each written determination. The written determination must show
the employee (or job candidate) meets the criteria specified in Sec.
537.105.
(4) An authorized agency official must approve student loan
repayment benefits in connection with a recruitment action before the
job candidate actually enters on duty in the position for which he or
she was recruited. The agency and the job candidate may sign the
service agreement consistent with Sec. 537.107 before the job
candidate begins serving in the position, but the agency may not begin
making loan payments until the job candidate begins serving in the
position.
(5) Student loan repayment benefits are in addition to basic pay
and any other form of compensation otherwise payable to the employee
involved.
(6) Appropriate tax withholdings must be deducted or applied at the
time any payment is made. Since these tax implications could create a
financial hardship for the recipient of the student loan repayment
benefit, agencies may lessen the impact of tax withholdings on an
employee's paycheck in one of the following ways:
(i) Make smaller payments at periodic intervals throughout the
year, rather than issue payments under this part in one lump sum;
(ii) Allow the employee to write a check to the agency to cover his
or her tax liability, rather than have the tax liability withheld from
the employee's paycheck;
(iii) Deduct the amount of taxes to be withheld from the student
loan repayment benefit before the balance is issued as a loan payment
to the holder of the loan.
Note to Sec. 537.106(a)(6): Contact the Internal Revenue
Service for further details concerning these options, as well as the
tax withholding implications of payments under this part.
(b) Qualifying student loans. (1) The agency may make loan payments
only for student loan debts that are outstanding at the time the agency
and the employee (or job candidate) enter into a service agreement.
Before authorizing loan payments, an agency must verify with the holder
of the loan that the employee (or job candidate) has an outstanding
student loan that qualifies for repayment under this part. The agency
must verify remaining balances to ensure that loans are not overpaid.
(2) The agency may repay more than one loan if the employee's
student loan repayment benefit does not exceed the limits set forth in
paragraph (c) of this section.
(3) These regulations do not impose a limit on the age of a student
loan for qualification purposes. The agency may, however, specify in
its agency plan that only student loans made within a certain timeframe
are eligible for repayment.
(c) Benefit amount. (1) In determining the amount of student loan
repayment benefits to approve, an agency must consider the employee's
(or job candidate's) value to the agency and how far in advance the
agency is permitted to commit funds. If an agency decides to make
additional student loan repayment benefits contingent on budget levels
or other factors, it must address these contingent benefits in the
written service agreement as described in Sec. 537.107(a).
(2) The amount of student loan repayment benefits provided by an
agency is subject to both of the following limits:
(i) $10,000 per employee per calendar year; and
(ii) A total of $60,000 per employee.
(3) In applying the limits in paragraph (c)(2) of this section, the
agency must count the full student loan repayment benefit (i.e., before
deducting any tax withholdings as described in paragraph (a)(6)(iii) of
this section).
(d) Employee responsibility. Loan payments made by an agency under
this part do not exempt an employee from his or her responsibility and/
or liability for any loan(s) the individual has taken out. The employee
also is responsible for any income tax obligations resulting from the
student loan repayment benefit.
Sec. 537.107 Service agreements.
(a) Before an employing agency makes any loan payments for an
employee, the employee (or job candidate) must sign a written service
agreement to complete a specified period of service with the agency and
to reimburse the agency for the student loan repayment benefit when
required by Sec. 537.109. The service agreement also may specify any
other employment conditions the agency considers to be appropriate,
including the employee's (or job candidate's) position and the duties
he or she is expected to perform, his or her work schedule, his or her
level of performance, and the geographic location of his or her
position. (See Sec. Sec. 537.108 and 537.109.) The service agreement
may address the possibility that, during the period the agreement is in
effect, the agency may modify the agreement to provide student loan
repayment benefits in addition to those fixed in the agreement based on
contingencies or conditions specified in the agreement.
(b) The minimum period of service to be established under a service
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agreement is 3 years, regardless of the amount of student loan
repayment benefits authorized. The agency and the employee may mutually
agree to modify an existing service agreement, subject to the
limitations at Sec. 537.106(c)(2), to provide additional student loan
repayment benefits for additional service without the need for an
entirely new service agreement (which would require a new 3-year
minimum service period). Periods of leave without pay, or other periods
during which the employee is not in a pay status, do not count toward
completion of the required service period. Thus, the service completion
date must be extended by the total amount of time spent in non-pay
status. However, as provided by 5 CFR 353.107, absence because of
uniformed service or compensable injury is considered creditable toward
the required service period upon reemployment.
(c) A service agreement made under this part in no way constitutes
a promise of, or right or entitlement to, appointment, continued
employment, or noncompetitive conversion to the competitive service.
This condition should be stated in the service agreement.
(d) The service period begins on the date specified in the service
agreement. That beginning date may not be--
(1) Earlier than the date the service agreement is signed; or
(2) Earlier than the date the individual begins serving in the
position for which he or she was recruited (when student loan repayment
benefits are approved to recruit a job candidate to fill an agency
position).
(e) The service agreement must contain a provision addressing
whether the individual would be required to reimburse the paying agency
for student loan repayment benefits if he or she voluntarily separates
from the paying agency to work for another agency before the end of the
service period. (See Sec. 537.109(b)(2).)
(f) The agency may include in a service agreement specific
conditions (in addition to those required by law) that trigger the loss
of eligibility for student loan repayment benefits and/or a requirement
that the employee reimburse the agency for student loan repayment
benefits already received. (See Sec. Sec. 537.108(a)(3) and
537.109(a)(2).) However, a service agreement may not require
reimbursement based on--
(1) An employee's failure to maintain performance at a particular
level (unless the employee is separated based on unacceptable
performance); or
(2) An involuntary separation for reasons other than misconduct,
unacceptable performance, or a negative suitability determination under
5 CFR part 731 (e.g., an involuntary separation resulting from a
reduction in force or medical reasons).
Sec. 537.108 Loss of eligibility for student loan repayment benefits.
(a) An employee receiving student loan repayment benefits from an
agency is ineligible for continued benefits from that agency if the
employee--
(1) Separates from the agency;
(2) Does not maintain an acceptable level of performance, as
determined under standards and procedures prescribed by the agency; or
(3) Violates a condition in the service agreement, if the agreement
specifically provides that eligibility is lost when the condition is
violated.
(b) For the purpose of applying paragraph (a)(2) of this section,
an acceptable level of performance is one that is equivalent to level 3
(``Fully Successful'' or equivalent) or higher, as described in 5 CFR
430.208(d). An employee loses eligibility for student loan repayment
benefits if his or her most recent official performance evaluation does
not meet this requirement.
Sec. 537.109 Employee reimbursements to the Government.
(a) An employee is indebted to the Federal Government and must
reimburse the paying agency for the amount of any student loan
repayment benefits received under a service agreement if he or she--
(1) Fails to complete the period of service required in the
applicable service agreement (except as provided by paragraph (b) of
this section); or
(2) Violates any other condition that specifically triggers a
reimbursement requirement under the agreement.
(b) An agency may not apply paragraph (a) of this section based on
an employee's failure to complete the required period of service
established under a service agreement if--
(1) The employee is involuntarily separated for reasons other than
misconduct, unacceptable performance, or a negative suitability
determination under 5 CFR part 731; or
(2) The employee leaves the paying agency voluntarily to enter into
the service of any other agency, unless reimbursement to the agency is
otherwise required in the service agreement, as provided by Sec.
537.107(e).
(c) If an agency and an employee mutually agree to modify an
existing service agreement to provide additional student loan repayment
benefits for additional service (as provided by Sec. 537.107(b)), the
modified service agreement may stipulate that, if the employee
completes the initial service period but fails to complete the
additional service period, he or she is required to reimburse the
paying agency only for the amount of any student loan repayment
benefits received during the additional service period.
(d) If an employee fails to reimburse the paying agency for the
amount owed under paragraph (a) of this section, a sum equal to the
amount outstanding is recoverable from the employee under the agency's
regulations for collection by offset from an indebted Government
employee under 5 U.S.C. 5514 and 5 CFR part 550, subpart K, or through
the appropriate provisions governing Federal debt collection if the
individual is no longer a Federal employee.
(e) An authorized agency official may 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. (See 5 U.S.C. 5379(c)(3).)
(f) Any amount reimbursed by, or recovered from, an employee under
this section must be credited to the appropriation account from which
the amount involved was originally paid. Any amount so credited must be
merged with other sums in such account and must be available for the
same purposes and time period, and subject to the same limitations (if
any), as the sums with which merged. (See 5 U.S.C. 5379(c)(4).)
Sec. 537.110 Records and reports.
(a) Each agency must keep a record of each determination to provide
student loan repayment benefits under this part and make such records
available for review upon request by OPM. Such a record may be
destroyed when 3 years have elapsed since the end of the service period
specified in the employee's service agreement unless any dispute has
arisen regarding the agreement. If the service agreement has not been
fulfilled, there are other disputes regarding the agreement or the loan
payouts, or the agreement has become the subject of litigation, the
records should be kept until the agency is notified by agency counsel
that all pending claims have been resolved, all litigation concluded,
and any applicable periods for seeking further review has elapsed and,
in any event, for a minimum of 6 years from the date the facts giving
rise to the dispute occurred. If debt collection is pursued against the
employee for repayments made by the agency, the agency must keep the
records until the agency is notified by agency counsel that the debt is
fully
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collected, compromised, or settled finally and that any applicable
period for seeking further review has elapsed.
(b) By March 31st of each year, each agency must submit a written
report to OPM containing information about student loan repayment
benefits it provided to employees during the previous calendar year.
Each report must include the following information:
(1) The number of employees who received student loan repayment
benefits;
(2) The job classifications of the employees who received student
loan repayment benefits; and
(3) The cost to the Federal Government of providing student loan
repayment benefits.
[FR Doc. E8-26013 Filed 10-30-08; 8:45 am]
BILLING CODE 6325-39-P
