The federal government is increasingly relying on a recruitment tool growing in popularity with employers that range from one of the best-known firms in corporate America to a brothel: Helping to pay off their workers’ student loans.
Last year, the federal government helped 8,469 federal employees make a dent in their student loans to the tune of more than $58.7 million, according to a report from the Office of Personnel Management released last month. That’s a 15% jump in the number of workers receiving the benefit and an 11% increase in the amount of money agencies are spending on the benefit, the report found.
The federal government’s growing use of the perk comes as it’s gaining buzz among companies. PricewaterhouseCoopers announced last month that it would put up to $1,200 a year toward its employees’ student loans during their first six years of entry-level employment. The firm is working with a Boston-based startup that launched a platform last month to help companies easily manage making payments toward their employees’ student loans. Even a brothel owner started a program earlier this month to help his workers make a dent in their student loans.
It’s no surprise employers are beginning to understand the power of student loan repayment to lure and retain top talent. Nearly 40 million Americans have student loan debt worth an estimated $1.2 trillion and getting some help with it seems to be an attractive proposition. About 55% of current students, recent college graduates and prospective college students said they would prefer student loan repayment help to company-sponsored health insurance, according to a recent survey from ionTuition, an online platform that helps borrowers manage their student loans.
The federal government is using loan repayment largely to target workers in the science, technology, engineering and math fields, which are in high demand, according to the OPM report. The Department of Defense offered it to the most employees out of any agency and they used it largely to recruit and retain engineers and nurses, according to the report.
But intelligence analysts at the Justice Department, passport and visa examiners at the State Department, human resource specialists at the Department of Veterans Affairs and a variety of other professions at different agencies got help with their student loans as well.
Federal agencies can put up to $10,000 toward an employees’ student loan each year and no more than $60,000 total. Only certain types of federally-made, insured or guaranteed loans qualify for the perk. In return, the employee has to agree to stay at the agency for at least three years.
Government workers also have access to another student loan benefit not available to most workers. Employees working for the government or in nonprofit sectors can have their loans forgiven after 10 years as long as they make consistent payments on them during that period.
