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entitled 'Federal Student Loan Repayment Program: OPM Could Build on
Its Efforts to Help Agencies Administer the Program and Measure
Results' which was released on July 22, 2005.
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Report to Congressional Requesters:
July 2005:
Federal Student Loan Repayment Program:
OPM Could Build on Its Efforts to Help Agencies Administer the Program
and Measure Results:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-762]:
GAO Highlights:
Highlights of GAO-05-762, a report to congressional requesters:
Why GAO Did This Study:
As federal workers retire in greater numbers, agencies will need to
recruit and retain a new wave of talented individuals. Agencies need to
determine if the federal student loan repayment (SLR) program is one of
the best ways to make maximum use of available funds to attract and
keep this key talent.
GAO was asked to identify (1) why agencies use or are not using the
program; (2) how agencies are implementing the SLR program; and (3)
what results and suggestions agency officials could provide about the
program and how they view the Office of Personnel Management’s (OPM)
role in facilitating its use. Ten agencies were selected to provide
illustrative examples of why and how agencies decided to use or chose
not to use the program.
What GAO Found:
The largest users among GAO’s 10 selected executive branch agencies
primarily employed their SLR programs as broad-based retention tools
aimed at keeping more recently hired employees with the knowledge and
skills critical to their agencies. Officials at these agencies said the
program also has an indirect positive effect on their recruitment
efforts because job candidates are aware of the benefit and find the
incentive attractive. Other agencies used the program as a recruitment
and retention tool on a case-by-case basis, offering repayments to
highly qualified individuals in occupations where the labor market is
competitive. Agencies not using the program reported no real need to do
so at this time because they are not facing significant recruitment and
retention challenges.
Agencies have a large degree of discretion in structuring their SLR
programs, and they were tailoring program aspects to meet their unique
needs. Those using their programs as broad-based retention tools
operated them centrally, while those making loan repayments on a case-
by-case basis had decentralized programs operated by their component
units. Agencies also varied in the size of their loan repayments
depending on the results they were trying to achieve.
Although agencies believe it is a useful tool, officials described the
program as time consuming and cumbersome to operate. They suggested
that more automation and consolidation of program activities would make
the program more efficient and easier to operate. Officials also
suggested ways to make the program more effective. Since the SLR
program is relatively new, agencies did not yet have comprehensive data
to assess the program’s impact, although they will need to establish a
baseline of measures now for future assessments of the program.
Currently, anecdotal evidence indicates that employees value the
program, and agency officials believe the incentive will become more
attractive to agencies once administrative problems are reduced.
OPM has taken a number of steps to provide agencies with information
and guidance on implementing the program. Human capital officials
recognized OPM’s efforts, but felt they could use more assistance on
the technical aspects of operating the program, more coordination in
sharing lessons learned in implementing it, and help consolidating some
of the program processes. OPM and the CHCO Council have an important
role in assisting agencies with implementing their SLR programs. They
may also be able to help agencies assess their own program results as
well as develop a common set of metrics to provide information to
Congress on the impact of the SLR program governmentwide.
What GAO Recommends:
GAO recommends that OPM work with the Chief Human Capital Officers
(CHCO) Council to determine more efficient ways to administer the SLR
program and to measure its results. GAO also recommends that the
selected agencies using the SLR program extensively build on current
efforts to measure the impact of their SLR programs. OPM generally
agreed with the recommendations. The selected agencies either generally
supported the recommendations or did not express an overall opinion
about them.
www.gao.gov/cgi-bin/getrpt?GAO-05-762 .
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Eileen Larence, (202) 512-
6806, larencee@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Selected Agencies' Use of the SLR Program Largely Depended on Their
Unique Recruitment and Retention Needs:
Agencies Tailored SLR Program Administration to Meet Their Unique
Needs:
Agency Officials Suggested Ways to Make the SLR Program More Efficient
and Effective, but Agencies Do Not Yet Have Processes to Assess the
Long-term Impact of Their Programs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Background Information on the Case Study Agencies:
Appendix III: Comments from the Office of Personnel Management:
Appendix IV: Comments from the Department of State:
Appendix V: Comments from the Department of Justice:
Appendix VI: Comments from the Department of Energy:
Appendix VII: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Summary of Selected Agencies' SLR Program Features:
Figure:
Figure 1: Fiscal Year 2004 Benefits Provided by Users of the Student
Loan Repayment Program:
Letter July 22, 2005:
The Honorable George V. Voinovich:
Chairman:
The Honorable Daniel K. Akaka:
Ranking Member:
Subcommittee on Oversight of Government Management, the Federal
Workforce, and the District of Columbia:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Richard J. Durbin:
United States Senate:
The Honorable Jon Porter:
Chairman: S
ubcommittee on the Federal Workforce and Agency Organization:
Committee on Government Reform:
House of Representatives:
At a time when rising educational debt has the potential to drive
college and professional school graduates away from public service and
into higher paid private sector jobs, student loan repayment is viewed
as one tool the federal government can use to attract and keep valuable
talent. Congress passed a law in 1990 authorizing agencies to repay, at
their discretion, their employees' student loans as a means to recruit
and retain a talented workforce.[Footnote 1] In 2001, the Office of
Personnel Management (OPM) issued final regulations to implement the
federal student loan repayment (SLR) program. The regulations were
subsequently changed in 2004 to reflect legislative amendments that
increased the ceiling on annual and total loan repayments. The
provisions of the federal SLR program legislation initially authorized
student loan repayments of up to $6,000 per year to a total of $40,000
per employee. These ceilings were later increased to a maximum amount
of $10,000 per calendar year and a total of $60,000. Income and
employment taxes are withheld from the repayment amount, and an
employee seeking student loan repayment must sign a written service
agreement to work for the agency for at least 3 years. The law requires
that agencies make the loan repayments directly to the lending
institutions.
After a slow start, agencies' use of the SLR program has increased
substantially since 2001. OPM reported that federal agencies increased
the number of employees receiving student loan repayments by 42 percent
in fiscal year 2004 compared to the previous fiscal year (from 2,077 to
2,945 employees) and increased their overall financial investment in
the program by 79 percent (from $9.18 million to $16.42 million). Most
of these repayments, approximately 81 percent, were made by five
agencies, including GAO. In making these investments, agencies were
required to address a range of issues, such as funding and criteria for
participation, to determine whether a SLR program was desirable or
feasible for them. Funding is particularly important given that the law
providing authority to establish the programs does not provide separate
or additional funding to implement them. Instead, agencies generally
need to reallocate funds from existing pay and benefits programs or
other recruitment and retention incentives to repay employees' student
loans. Consequently, agencies must determine whether to use the SLR
program given available funds and other tools to recruit and retain key
talent.
To obtain a better understanding of agencies' use of the federal SLR
program, you asked us to identify (1) why selected executive branch
agencies are using or not using the program, (2) how agencies are
implementing the SLR program, and (3) what results and suggestions
agency officials could provide about the program and how they view
OPM's role in facilitating its use.
To address our objectives, we identified a set of federal agencies
varying in size and mission that had established SLR programs, were in
the process of establishing programs, or had chosen not to use them. We
then selected 10 agencies to provide illustrative examples of why and
how agencies decided to use the program or chose not to use it. We
selected the Department of State (DOS), the Department of Justice
(DOJ),[Footnote 2] and the Securities and Exchange Commission (SEC)
because they were among the largest users of the program through fiscal
year 2004, and the General Services Administration (GSA) and the
Department of Energy (DOE) because they used their programs on a more
case-by-case basis. We selected the Department of Transportation (DOT)
and the Department of Commerce (Commerce) because they were initiating
programs, and the Social Security Administration (SSA), the Equal
Employment Opportunity Commission (EEOC), and the Small Business
Administration (SBA) because they did not use the program. Background
information on the agencies appears in appendix II. We reviewed
available documentation, such as strategic workforce plans, SLR
implementation plans, and other documents associated with administering
the program. To obtain governmentwide data on agencies' use of the
program and to help identify our case study agencies, we reviewed and
analyzed OPM's annual reports to Congress on the SLR program.[Footnote
3] We interviewed agency officials, such as human capital officers, SLR
program managers, and recruitment directors, from the selected
agencies, as well as officials from OPM and other relevant parties. We
conducted our review in Washington, D.C., in accordance with generally
accepted government auditing standards from July 2004 through June
2005. Detailed information on our scope and methodology appears in
appendix I.
Results in Brief:
The agencies' decisions to use the SLR program were largely based on
how well the program met each agency's unique recruitment and retention
needs. Six of our case study agencies were using the program, one was
just beginning to implement it, and three had chosen not to implement
it. DOS, DOJ, and SEC, the largest users among the case study agencies,
reported using the program primarily for broad-based retention efforts
aimed, in many cases, at retaining more recently hired employees with
knowledge and skills critical to the agencies. Officials at these
agencies said that the program had a strong indirect effect on their
recruitment efforts as well, because job candidates know the program
exists and find it attractive. Officials from three other agencies,
GSA, DOE, and DOT, said they offer student loan repayments in
recruiting specific individuals, such as Presidential Management
Fellows, and in occupations where the labor market is competitive, such
as engineering. In addition, they offer student loan repayments to
employees with skills critical to the agency that they need to retain.
Officials at Commerce, which recently offered its first repayment, said
the department will also use the program on a case-by-case basis for
both recruitment and retention. SSA, EEOC, and SBA officials reported
having no real need to implement the program at this time, because
their agencies are not facing significant recruitment and retention
challenges. SSA officials, for example, said the agency's recruitment
needs generally do not require a focus on individuals with highly
technical or unique qualifications.
Likewise, agencies are implementing the SLR program to meet their
unique needs by tailoring various aspects of their programs. For
example, the agencies using the SLR program more extensively and
primarily as a broad-based retention tool operated their programs
centrally, while the agencies using student loan repayments on a case-
by-case basis decentralized operations to units within the agencies.
DOS, for example, centrally funds and administers the program for all
units within the department, such as the Bureau of Consular Affairs.
DOE, on the other hand, allows its units to implement their own
programs, primarily because they have diverse needs, including
different geographic labor markets. Agencies also varied the amount of
recipients' loan repayments to achieve particular results. The DOJ
attorney program, for example, offers the largest loan repayments to
attorneys in the lowest salary positions to attract a broader base of
individuals who otherwise may not have been interested in these
positions. Agencies also varied the length of service required before
an employee can become eligible for the program. For instance, SEC, an
agency that reports little difficulty recruiting candidates but has a
relatively high attrition rate, requires employees to serve at least 1
year before becoming eligible to participate in the program. Because
program participants sign a 3-year service agreement, the agency is
likely to retain these employees for a minimum of 4 years.
Agency officials provided suggestions for making the SLR program more
efficient and effective, but agencies using the SLR program did not yet
have comprehensive data on the extent to which it is aiding them in
their recruitment and retention efforts. For example, most officials
agreed that the program is cumbersome to administer and proposed that
certain changes, such as more automation of the application and loan
repayment processes and consolidation of other program activities,
could make it more efficient. In particular, an official at DOT
indicated that alternative approaches could be explored to increase the
cost effectiveness of administrative functions for agencies that use
the program extensively. For example, one approach may be to create
shared services--similar to the approach used to provide payroll
services, wherein a small number of agencies service multiple agencies.
Officials also suggested changes to the program they believed would
increase its effectiveness by making the program more attractive to
candidates and employees, such as reducing the 3-year service
agreement. As for determining program results, although the program is
still relatively new to most agencies, establishing now what data and
indicators they will track to determine the program's effects, as well
as a baseline to measure the changes over time, is important for future
assessments of the program. All agencies are tracking the number of SLR
recipients who do not fulfill their service agreements and stated that
few are leaving the agency before their agreements expire, indicating
the program is having at least a short-term positive impact on
retention. As for longer-term measures of effect, agency officials
identified several indicators they could track, such as participant
attrition rates and survey data measuring employee attitudes about the
program. Officials stated that they would need to track attrition rates
of loan repayment recipients for at least a 3-year cycle because
recipients sign at least a 3-year service agreement and are less likely
to leave during this time frame. Nevertheless, agencies could establish
the tracking systems now, and could conduct the employee surveys on a
periodic basis to gauge program results.
Finally, agency officials' views were mixed on OPM's role in
facilitating their use of the SLR program. They suggested that more
coordination among agencies, which OPM could facilitate, would help
with program implementation and administration. OPM has taken a number
of steps to provide agencies with program information and guidance,
including making reference materials, such as questions and answers on
administering student loan repayments, available on its Web site, and
sponsoring a forum for program managers. Since a number of the changes
in program administration, such as more automation of the process or
establishing shared-service arrangements, would benefit all agencies
using the program, OPM, as the central human capital office, is well-
positioned to help implement these program improvements. In addition,
continued OPM support, such as the forums and training sessions on the
program, could be helpful. Some of this assistance could also include
working with the agencies to develop indicators and measures of program
results, which in turn could help OPM to assess and report on program
results governmentwide.
Given the challenges cited in administering the program and its
potential to grow, simplifying and consolidating administrative tasks,
sharing lessons learned, and assessing results will help ensure
agencies make maximum use of funds to recruit and retain key talent, a
critical goal in an era of fiscal constraints. In light of this, we
recommend that the Director of OPM, in conjunction with the Chief Human
Capital Officers (CHCO) Council,[Footnote 4] continue to work with
agencies using the program to determine the most important program
improvements to implement, especially those that would have
governmentwide benefits, such as shared service arrangements, and the
most cost-effective ways to implement them. OPM could also help
agencies identify possible data to collect, and indicators to use, to
track long-term program results, as well as possible governmentwide
indicators OPM could use to report overall program results to Congress.
We are also recommending to our selected agencies making extensive use
of the SLR program that they continue their efforts to measure the
impact of their programs.
We provided a draft of this report to the Director of OPM and to our 10
selected agencies for their review and comment. We received written
comments from OPM, DOS, DOJ, and DOE, which are included in appendixes
III, IV, V, and VI respectively. OPM and DOS concurred with our
recommendations. DOJ did not comment specifically on the
recommendations but stated that the department has already started to
develop ways to measure the impact of the attorney student loan
repayment program on retention. DOE offered two opinions on our
recommendations to OPM. First, DOE stated that the report did not fully
describe OPM's efforts in assessing program implementation as part of
its annual reporting process to Congress. We added language in the
report to expand on what OPM included in its most recent report. DOE
also suggested that GAO recommend that OPM assist agencies in measuring
the effectiveness of specific incentives such as student loan
repayments by including questions about them in the Federal Human
Capital Survey. While this may be an effective method to collect data
on program results, we did not prescribe the measures of effectiveness
OPM should use but recommended that it work jointly with agencies and
the CHCO Council to design these measures. These four agencies, as well
as several of the remaining agencies, also provided technical comments,
which we have incorporated as appropriate.
Background:
In 1989, the National Commission on the Public Service found that the
federal government experienced difficulties in recruiting and retaining
a quality workforce.[Footnote 5] The commission recommended that a
student loan forgiveness program be established, and the SLR program
was proposed in response to that recommendation. The reasons underlying
enactment of the federal SLR program continue today and include the
impending retirements of large numbers of federal workers and the
difficulty, at times, in attracting the right individuals to public
service to help fill the gaps. Today's college graduates are entering
the workforce with even more substantial education loans than in 1989,
and studies indicate that educational debt prevents many graduates from
choosing employers in which they are interested but that provide lower
salaries. A 2002 Congressional Budget Office study concluded that
federal employees in selected professional and administrative
occupations tend to hold jobs that paid less than comparable jobs in
the private sector. The report stated that the jobs that show the
greatest pay disadvantage for federal workers make up an increasing
share of federal employment.[Footnote 6]
The provisions of the federal student loan repayment program
legislation authorize student loan repayments as recruitment or
retention incentives for highly qualified federal job candidates or
current employees. In retention situations, however, the SLR program
may be used only when an employee is likely to leave for employment
outside the federal government, not to another federal agency. As
mentioned previously, agencies are authorized to provide an employee
with a maximum repayment amount of $10,000 per calendar year up to a
total of $60,000, with the payments included in gross income for both
income and employment tax purposes. An employee who separates
voluntarily from the agency, who does not maintain an acceptable level
of performance, or who violates any of the conditions of the service
agreement becomes ineligible to continue to receive the benefit and
must reimburse the agency for the total amount of any repayment
benefits received. Under the law, student loans made, insured, or
guaranteed under the Higher Education Act of 1965 or health education
assistance loans made or insured under the Public Health Service Act
are eligible for repayment. The SLR program legislation covers
executive and select legislative branch agencies and government
corporations such as the Pension Benefit Guaranty Corporation.[Footnote
7]
Authorizing legislation also requires OPM to annually report to
Congress on agency program use. According to OPM, the Department of
Health and Human Services was the only agency to make a student loan
repayment in fiscal year 2001. More agencies began using the program in
fiscal year 2002, with 16 of them reporting to OPM that they had repaid
some employees' student loans. Participation increased again in fiscal
year 2003 with 24 agencies distributing more than $9.18 million among a
total of 2,077 recipients. During fiscal year 2004, 28 agencies
provided 2,945 employees with a total of more than $16.42 million in
student loan repayments. Compared to fiscal year 2003, this represents
a 42 percent increase in the number of employees receiving the benefit
and a 79 percent increase in the agencies' overall financial investment
in the program. As figure 1 shows, five agencies invested the most
funding on student loan repayments in fiscal year 2004. These five
agencies also made the greatest number of loan repayments.
Figure 1: Fiscal Year 2004 Benefits Provided by Users of the Student
Loan Repayment Program:
[See PDF for image]
[End of figure]
As with other human capital flexibilities, Congress has directed that
agencies use the incentive strategically; therefore, some agencies may
not need to make large numbers of student loan repayments to use the
program effectively, or need to use the program at all to manage their
workforces.
GAO is one of the top five agencies accounting for most of the student
loan repayments made in fiscal year 2004. GAO implemented its SLR
program in fiscal year 2002 for employees who indicated interest and
were willing to make a 3-year commitment to stay with the agency. The
objective of the program is to facilitate the recruitment and retention
of highly qualified employees by (1) providing an incentive for
selected candidates to accept a GAO position that may otherwise be
difficult to fill and (2) retaining highly competent employees with
knowledge or skills critical to GAO. At the current time, GAO's program
is used mostly to retain top talent. The goal is to retain employees
longer than 3 years, after which they are more likely to consider a
longer-term career at GAO. The agency focuses on retaining recently
hired staff because of the considerable time and effort expended on
selecting these employees and the substantial amount of money required
to train new hires who will replace retiring employees. The program's
operating plan specifies groups or categories of employees who will be
considered for student loan repayment for retention purposes based on
job series. Analysts and financial auditors, for example, generally
received the same amount of loan repayment, $5,000 in fiscal year 2004.
Employees in often hard-to-fill job series--such as economists and
attorneys--are considered for GAO's maximum loan repayment, $6,000 in
fiscal year 2004, on a case-by-case basis. To help measure the
effectiveness of its program, GAO distributed a survey to program
recipients in 2004. More than 50 percent of respondents confirmed that
the program had some influence over their decision to stay with GAO.
Pending legislation in the House of Representatives and the Senate
would exclude student loan repayments from gross income for federal tax
purposes. The Generating Opportunity by Forgiving Educational Debt for
Service bill would, in effect, increase the amount of the student loan
repayment benefit by relieving federal employees of the obligation to
pay income tax on the repayments their federal agencies have provided
them.[Footnote 8] Those in favor of eliminating the tax argue that,
with the current program, the federal government is taxing its own
ability to recruit and retain employees. They also note that loan
repayments made by educational institutions or nonprofit organizations
to encourage public service are not counted as taxable income for the
recipient.
Legislation was also introduced but not passed in the last Congress to
authorize a separate SLR program for federal employees in national
security positions. The Homeland Security Federal Workforce Act would
grant authority to the heads of selected agencies to establish a pilot
SLR program to recruit or retain highly qualified professional
personnel employed by their agencies in national security
positions.[Footnote 9] This pilot program, which would remain in effect
for 8 years, would be limited to agencies with national security
responsibilities, namely national security positions in the Departments
of Defense, Energy, Homeland Security, Justice, State, and the
Treasury; the Central Intelligence Agency; and the National Security
Agency. The proposed SLR program is similar to the existing one except
that the legislation will authorize the appropriation of funding
specifically for the loan repayments. However, actual funding of the
loan repayments may be at the discretion of Congress via annual
appropriations acts. The legislation also requires that, no later than
4 years after its enactment, the OPM Director report to the appropriate
congressional committees on the status of the programs established and
the success of such programs in recruiting and retaining employees for
national security positions.
Selected Agencies' Use of the SLR Program Largely Depended on Their
Unique Recruitment and Retention Needs:
DOS, DOJ, and SEC used the SLR program more extensively and primarily
as a broad-based tool to retain more recently hired employees in
specific positions that require knowledge or skills critical to the
agency. GSA, DOE, and DOT, on the other hand, used it in on a case-by-
case basis as an incentive to either recruit selected highly qualified
candidates or retain employees with skills critical to the agency.
Commerce recently started to offer repayments, also on a case-by-case
basis, for recruitment and retention. At this time, SSA, EEOC, and SBA
were satisfied with their efforts using other recruitment and retention
tools and have not needed to use the program.
DOS, DOJ, and SEC Use the Program Primarily to Retain Employees:
DOS heads the list of federal agencies in the number of employees
participating in, and funds expended on, student loan repayments. The
department began using the program in fiscal year 2002 and reported
making loan repayments for 734 employees in fiscal year 2004.
Repayments totaled approximately $3.6 million. Officials from DOS noted
that many of their recently hired employees have student loan debts.
For example, most of the Presidential Management Fellows entering the
department have eligible student debt, which automatically qualifies
them for the benefit. DOS uses its program primarily to recruit current
employees for foreign service hardship posts, and also to retain
employees in civil service positions that are difficult to fill. The
department has determined that offering the program to candidates who
accept or remain in positions at the most difficult posts, such as
those experiencing hazardous political or health-related conditions,
helps attract candidates to seek these assignments or encourages
employees to remain in them. Employees, or potential employees, in
certain historically difficult-to-fill civil service occupational
series may also qualify for the program. These positions range from
those requiring historians with a Ph.D. in history to passport and visa
examiners working throughout the country. While DOS primarily uses the
program for retention, its recruiters also report that the SLR program
is of great interest on college campuses across the country, thereby
indirectly helping recruiting. The department noted that student loan
repayments are only one of several incentives and benefits available to
those considering a State Department career, but that the repayments
are an important part of its overall benefits package.
While DOJ made only one student loan repayment in fiscal year 2002, it
began using the program extensively in fiscal year 2003. In fiscal year
2004, the department reported making 331 repayments totaling
approximately $1.9 million, with the majority of payments made on
behalf of attorneys, special agents, and intelligence analysts. DOJ's
use of the SLR program is unique in that there is a centrally
administered departmentwide program for attorneys, as well as unit-run
programs for a variety of other positions. According to the attorney
SLR program officials, DOJ uses the program mostly to retain
experienced attorneys. About 10 percent of the loan repayments is being
used for recruitment, including qualifying new attorneys entering the
department under the Honors Program.[Footnote 10] An attorney SLR
program manager reported that DOJ advertises the program heavily to law
students because it perceives the program to be an effective indirect
recruiting tool.
In terms of DOJ's unit-run programs, 12 of its 16 components reported
using the SLR program in fiscal year 2004, according to a DOJ human
capital official. For example, the Bureau of Prisons found the program
helped to retain highly skilled and experienced employees who would
consider seeking employment in the private sector, as well as attract
candidates who normally would not be interested in working with the
agency due to the salary level.
SEC, which began using the SLR program in the last half of fiscal year
2003, reported making 384 student loan repayments totaling
approximately $3.3 million in fiscal year 2004. Most of these
repayments were made on behalf of attorneys. According to SEC
officials, the agency generally does not have trouble attracting job
candidates, but it does have a relatively high attrition rate. An
official remarked that the agency has a highly skilled workforce
comprised largely of securities attorneys, accountants, and examiners,
many of whom are highly sought after by the private sector, and it
historically has been a challenge for SEC to retain them. SEC,
therefore, uses the program only for retention. SEC officials said that
thus far they have had only a few employees leave before the 3-year
service agreement was completed. In addition, they reported that a
large percentage of employees are reapplying for benefits, indicating
their willingness to stay with the agency long enough to reduce or pay
off their student loan debt. Although the program is used for
retention, SEC advertises in its recruitment efforts that the benefit
is available after 1 year of service, making it an indirect recruiting
incentive. Officials noted that SEC also uses other recruitment and
retention incentives, but uses those incentives on a strategic basis to
recruit and retain highly qualified employees with qualifications
critical to SEC's mission.
GSA, DOE, and DOT Target Repayments to Both Recruit and Retain Specific
Individuals for Certain Occupations; Commerce Also Intends to Use Its
Program for These Reasons:
GSA units generally determine the use of incentive pay, including
student loan repayments, on a case-by-case basis. GSA guidance on the
program states that student loan repayments are not an entitlement, but
rather a recruitment and retention incentive that may be used
optionally by a manager who would not otherwise be able to recruit or
retain a highly qualified employee with qualifications critical to GSA
missions. An official noted that SLR authorizations are based on the
particular recruitment or retention situation, whether the position is
a critical need or difficult to fill, and the ability of the unit to
fund the repayments. In fiscal year 2004, GSA repaid 17 loans at a
total cost of approximately $93,000. The agency reported that it uses
the SLR program for both recruitment and retention, although most of
the repayments in fiscal year 2004 were for recruitment. GSA plans to
increase its use of the program only if the number of critical
vacancies increases and the number of available candidates decreases.
DOE uses the SLR program on a case-by-case basis determined by factors
such as labor market conditions that may affect recruiting efforts.
Each case must be justified by the recommending official, concurred
with by the respective financial and human capital staffs, and approved
by a top manager authorized to grant the incentive. DOE reported
spending approximately $87,000 on 36 repayments in fiscal year 2004 and
using the program almost equally for recruitment and retention. Student
loan repayments were offered to employees in a variety of different
occupations, such as engineering and financial analysis. According to a
DOE official, program use is expected to increase in incremental
amounts annually for recruiting entry-level engineers and scientists,
but not for retention purposes. Because DOE views the SLR program as
more expensive than other incentives, managers are asked to be
selective about their SLR offers. DOE has developed recruitment and
retention worksheets to help managers determine the cost of a loan
repayment compared to using other incentives, so they can evaluate the
most strategic use of resources.
DOT began using the program in fiscal year 2004 by making six loan
repayments totaling approximately $53,000. Three of these were made on
behalf of Presidential Management Fellows. The agency made the
repayments for both recruitment and retention purposes. DOT officials
speculated that the program will play a role in future hiring, as it
appears to be a more valuable tool for entry-level employees who are
more likely to have student loans. Agency officials also said that
since DOT views the program as an expensive benefit and because the
agency is now operating with a lower budget, they will use the program
sparingly. Since repayment will be a targeted benefit, a human capital
official noted that it probably will not be featured in the standard
DOT recruitment materials or brochures.
Commerce is planning to use the program to recruit and retain specific
individuals in mission-critical occupations, such as statisticians. It
recently reported offering its first student loan repayment to an
applicant who turned it down because of the length of the service
agreement. Commerce intends to use the SLR program for both retention
and recruitment, depending on the needs of its units. For example, the
National Institute of Standards and Technology, which needs technical
staff, will most likely use it for recruitment, while the Office of
General Counsel, with a high turnover rate for attorneys, will likely
use it for retention.
SSA, EEOC, and SBA Reported They Have No Need to Implement the SLR
Program at This Time:
According to SSA officials, the agency has not needed the SLR program
to recruit or retain staff. The agency meets its hiring needs through a
national recruiting program and generally does not focus its
recruitment efforts on individuals with highly technical or unique
qualifications. Therefore, SSA is able to meet its hiring targets
without extensive use of special incentives. When needed, officials
said the agency has successfully used recruitment bonuses, retention
allowances, relocation bonuses, and above-minimum salaries to recruit
and retain highly qualified individuals for hard-to-fill positions. The
officials believed that these other incentives provided recipients with
greater flexibility to use their bonuses or allowances to meet their
own needs, whether to repay student loans or for other reasons. The
officials acknowledged, however, that if SSA cannot continue to
successfully recruit or retain employees through its national
recruiting program or the use of other flexibilities, they would
reconsider their decision not to use the SLR program.
According to agency officials, EEOC does not use the SLR program
because of fiscal constraints and because the organization has
qualities that attract and retain employees without the program. In
addition, the agency has not used other recruitment and retention
incentives recently. An EEOC human capital official noted that the
agency has lost 350 employees in the last 3 and a half years and will
likely lose more employees in the near future. Rather than having to
use monetary recruitment or retention incentives, agency officials
remarked that individuals are drawn to work at EEOC primarily because
of the mission it pursues. On the basis of anecdotal evidence, they
also believe that employees stay with EEOC to a large degree because of
the positive work-life balance the agency offers them.
According to SBA officials, the agency is doing very limited hiring and
rarely needs to offer recruitment and retention incentives. SBA
officials explained that the agency recruited 156 employees during
fiscal year 2004 and was able to successfully recruit the desired
talent without using the incentive. The officials further stated they
were not aware of candidates not accepting a position at SBA because
the agency lacked a SLR program. As SBA becomes more targeted in its
recruitment activities, agency officials remarked that they will
consider using the SLR program along with other recruitment
flexibilities.
Agencies Tailored SLR Program Administration to Meet Their Unique
Needs:
To address needs unique to their organizations, agencies customized
aspects of their SLR programs. Table 1 illustrates some implementation
differences among our selected agencies.
Table 1: Summary of Selected Agencies' SLR Program Features:
Agency: U.S. Department of State;
Program features:
* Centrally administered and centrally funded;
* Participation criteria post or position based;
* Self-nominating participation;
* Annual loan repayments generally $4,700;
* Multiple application periods annually.
Agency: U.S. Department of Justice;
Program features:
* Centrally administered departmentwide attorney SLR program and
separate unit-run programs;
* Self-nominating attorney program participation; manager-recommended
unit-run participation;
* Attorney program requires $10,000 minimum loan debt;
* Attorney program gives the most support to lowest salaried
participants--up to $6,000 annually;
* Higher salaried attorneys receive only matching loan repayments;
* Attorney program selections by administrative panel.
Agency: U.S. Securities and Exchange Commission;
Program features:
* Centrally administered and centrally funded;
* Self-nominating or manager-recommended participation;
* One-year qualifying length of service required for program
participation;
* 75 percent of fiscal year 2004 repayments were $10,000;
* Additional year of service required for each renewal.
Agency: U.S. General Services Administration;
Program features:
* Decentralized administration and unit-based funding;
* Manager- nominated participation on a case-by-case basis;
* Fiscal year 2004 loan repayments were generally $6,000.
Agency: U.S. Department of Energy;
Program features:
* Decentralized administration and unit-based funding;
* Manager-nominated participation on a case-by-case basis;
* Repayment amounts vary widely--maximum of approximately $6,000
annually;
* Service agreements between units do not necessarily transfer;
* Additional years of service not always required for renewals;
* Current students also eligible to participate.
Agency: U.S. Department of Transportation;
Program features:
* Decentralized administration and unit-based funding;
* Manager-nominated participation on a case-by-case basis;
* Fiscal year 2004 repayments averaged $9,000;
* Recipients can transfer between units without breaking the service
agreement.
Source: GAO presentation.
[End of table]
Agencies Operated Their Programs Differently:
Agencies centralized SLR program operations at the department level to
coordinate departmentwide needs or decentralized operations to their
individual units to offer them needed flexibility. The agencies
operating their programs centrally used the SLR program primarily as a
broad-based retention tool, while the agencies running decentralized
programs used student loan repayments on a case-by-case basis. DOS, for
example, has a centrally operated and funded SLR program that serves
the specific recruitment and retention needs of all units within the
department, such as those of the Bureau of Consular Affairs. In
contrast, DOJ runs both centralized and decentralized programs. For
example, the DOJ attorney SLR program is centrally administered,
although as of fiscal year 2004, the recipient's unit agency had to
bear the costs of the repayments. Starting in fiscal year 2005, almost
30 percent of the program costs are being paid centrally with the
balance coming from the individual DOJ units that participate. DOJ
units offering repayments to employees in a wide variety of positions
operate and fund these programs. GSA, DOE, and DOT have decentralized
programs. Managers in individual units nominate specific candidates or
employees for participation in the program, and the units provide the
funding for the loan repayments. DOE, for example, allows its units to
implement their own programs, primarily because they have diverse
needs, including different geographic labor markets. The National
Nuclear Security Administration, an agency within DOE, issues its own
human capital program requirements and guidelines, consistent with
overall departmental human capital policy, and administers its own SLR
program at its various sites and locations across the country.
Agencies also varied the amount of the loan repayment, depending on the
results they needed to achieve. For example, to make the benefit
meaningful to its employees, SEC has repaid the maximum amount
allowable of $10,000, unless the loan balance is less than that amount.
DOJ, for its attorney SLR program, offers a maximum amount of $6,000
annually to attorneys with salaries below $74,000 to attract a broad
base of individuals who otherwise may seek employment in the private
sector. For attorneys with higher salaries, DOJ matches the recipient's
own annual repayment amount up to a maximum of $6,000. A DOS official
said the department's goal is to offer meaningful loan repayments to
the largest number of individuals possible, so DOS has repaid the same
amount for all eligible employees, which for the past 3 years has been
$4,700. If a recipient's outstanding loan balance is less, DOS repays
the lower amount.
Agencies Shape Their Participation and Selection Criteria to Address
Their Unique Needs:
Agencies varied the length of time employees were required to wait
before becoming eligible for the SLR program depending on results they
were trying to achieve. For example, the DOJ attorney SLR program has
no longevity requirements. Attorneys may apply during the first
application period following their employment. Officials are concerned
that they could miss opportunities to hire highly qualified law
students with large student loan debts, who may be unable to accept
DOJ's entry-level positions because of economic concerns. Officials
said the application process is self-nominating, and an attorney must
have a qualifying student loan debt base of at least $10,000 to be
eligible for the program. SEC officials said the agency has few
problems attracting employees but historically has had challenges
retaining them, often because SEC experience makes employees very
marketable in the private sector. The agency has tailored its program
participation criteria to address this need by requiring employees to
complete at least 1 year of employment with SEC before they are
eligible for the program. With the 3-year service agreement, SEC then
has the potential to retain employees for at least 4 years, which also
helps to ensure a greater return from recruitment and training costs.
Agency Officials Suggested Ways to Make the SLR Program More Efficient
and Effective, but Agencies Do Not Yet Have Processes to Assess the
Long-term Impact of Their Programs:
Officials from agencies using the program agreed that certain changes,
such as more automation of the application and loan repayment processes
and consolidation of some other program activities, would help to
improve the program's administration. Several officials also suggested
ways they believed would increase the program's effectiveness by making
it more attractive to candidates and employees, such as reducing the
length of the service agreement. As for assessing the results of their
programs, agencies did not yet have processes in place to gauge long-
term effects on their recruitment and retention efforts. Officials from
agencies with SLR programs did note several indicators they plan to
use, and suggested that anecdotal evidence indicates employees value
the SLR program. They stated that since the program is relatively new,
they did not yet have enough data to track long-range statistical
trends that would help them measure program results. Nevertheless, it
will be important for these agencies to establish, up front, goals for
their programs, a recruitment and retention baseline from which they
can monitor changes that result from the program, and the data they
will collect to measure these changes in order to assess long-term
effects.
Most Agency Officials Agreed That the Program Is Cumbersome to
Administer and Suggested Ways It Could Be More Efficient:
While the agencies using the program believe it is a useful tool,
officials characterized it as cumbersome to administer. Human capital
offices generally administer the program and are performing some tasks
and activities that are uncharacteristic of their function and unique
to the program. Program administrators, for example, must interact with
a large number of lending institutions, verify loans, and, at times,
act as collection agencies. An official from DOS remarked that, aside
from the Department of Education, which administers student loans,
there are few federal workers who have knowledge of the student loan
business. Therefore, agency staff must develop expertise and establish
and modify procedures to operate the program. The official noted that
for the 734 DOS employees who received the loan repayments in fiscal
year 2004, the department made almost 800 individual transactions to 55
different lending institutions. The agencies were either not tracking
administrative costs associated with operating the program or were just
starting to track them. The agency officials said they were absorbing
the time and costs associated with the program into their regular
operations.
Agency officials reported that processing loan repayments involves many
steps that can include time-consuming complications. SEC officials, for
example, said their entire administrative process, prior to actual
payment distribution to the various lenders, can take more than 3
months. This process involves steps such as verifying that the employee
has a loan eligible for repayment, verifying the amount of the
outstanding loan balance, and eventually, ensuring that the loan
repayment is applied to the correct outstanding loan. SEC officials
also noted that its payroll provider cannot make electronic transfers
of loan repayments, requiring them to issue paper checks that are
burdensome and sometimes applied to the wrong account. Furthermore, the
Department of Education, one of the largest student loan lenders
through its Direct Loan Program, is unable to accept electronic
transfers of funds from agencies for loan repayments. According to an
Education official, they are looking at ways to collect direct loan
repayments electronically. Other complications included processing
repayments for employees who have loans with multiple lenders,
distinguishing private loans that are not eligible for the program from
federally guaranteed student loans, and having recipients supply
incorrect addresses for their lenders. In addition, officials said that
administrative problems with the various payroll providers, who process
the loan payments, were a concern. A DOT official, for example, said
they were using a payroll system that was being phased out through
OPM's e-payroll initiative.[Footnote 11] The official remarked that it
was costly for DOT to incorporate the loan repayments into this
outdated payroll system, causing the agency to experience delays in
implementing the program. An official at DOE said its payroll provider
had been unable to provide biweekly loan repayment options until
recently.
Officials from most of the agencies using the program suggested ways to
help administer the program more efficiently, primarily through more
automation and consolidation of activities.
* SEC human capital officials said that automation of SLR program
activities, such as the ability to make electronic fund transfers for
all repayments, would make the process far easier. They also suggested
implementing an electronic signature to help expedite the SLR
application process and recommended that some of the responsibility for
making the program operate more smoothly be shifted to SLR recipients.
For example, SEC requires recipients to provide verification to the
human capital office that their loan repayments were applied correctly.
In addition, SEC officials estimated that about 1 month of their
processing time could possibly be eliminated if each of the various
lenders had one designated representative to work with federal agencies
on resolving loan repayment problems.
* A program manager at DOS suggested creating a central database of
student loans and student loan lenders to assist with processing steps
such as verifying the correct names and mailing addresses.
* A human capital official at DOE said OPM should require payroll
service providers to use processes for student loan repayments similar
to those used for other incentives, such as recruitment bonuses.
* An official at DOT indicated that alternative approaches could be
explored to increase the cost effectiveness of administrative functions
for agencies that use the program extensively. For example, one
approach may be to create shared services, similar to the approach used
to provide payroll services, wherein a small number of agencies service
multiple agencies.
* Finally, agency officials suggested that more sharing of best
practices with other federal agencies experiencing similar challenges
would help with implementing the SLR program. DOS and DOJ officials
said they consulted with each other about whether to centralize or
decentralize their programs and shared program document templates. This
type of collaboration could help agencies beginning to implement the
program avoid some of the growing pains experienced by the current user
agencies.
DOJ's attorney SLR program, in particular, found a number of ways to
increase its program's efficiency. For example, DOJ maintains a Web
page that is updated regularly to make the SLR process transparent to
applicants and inform all eligible attorneys about the program. The
department credited the Web page with reducing the need to respond to
questions about the program. In addition, DOJ standardized the
application process for the attorney SLR benefit by posting request,
validation, and review forms on its Web site in form-fillable versions.
The department also credited a process that requires applicants to
submit a valid, signed service agreement at the time of application for
expediting the repayment process. The presigned service agreement
includes a release authorizing loan holders to discharge financial
information to the department for loan validation at the same time it
eliminates the need for the department to secure service agreements
after selections are made.[Footnote 12] DOJ's attorney SLR program also
reported learning it could reduce administrative burdens by only
validating loan information for the attorneys actually selected to
receive SLR benefits.
While agency officials could suggest ways to improve the program's
administration, individual agencies may find it difficult to design
some of the program improvements for themselves, and some of these
changes could be more beneficial when implemented governmentwide. For
example, it may be more effective to automate portions of the repayment
process for all user agencies, rather than have each agency
individually pursue this. Likewise, the President's Management Agenda
calls for the federal government to "support projects that offer
performance gains that transcend traditional agency boundaries."
Sharing services across agencies for specific SLR administrative
activities may present an opportunity for program managers to purchase
human capital services from specialized providers, such as they
currently do for payroll services, thereby reducing costs through
economies of scale and freeing their staff to focus on more strategic
rather than administrative activities. In prior work, we identified
similar opportunities for agencies to use alternative service delivery
(ASD) for a range of human capital activities, and recommended that OPM
work with the CHCO Council to promote the innovative use of
ASD.[Footnote 13] OPM, in written comments, agreed with this role.
Agency Officials Also Suggested Ways to Make the Program More
Effective:
Agency officials identified several program characteristics they
believe impede the program. Likewise, OPM's fiscal year 2004 report to
Congress on the SLR program noted common impediments. Of the barriers
agencies reported to both GAO and OPM, the most frequently cited
included difficulty in funding the program, the tax liability
associated with the repayments, and the length of the required service
agreement. A DOE human capital official, for example, remarked that
factors, such as detailing its employees to Iraq, have created more
competing budget needs within units; in one case, a unit wanted to use
the incentive but determined it could not commit to SLR payments
because of the cost of overtime premiums for detailed employees. In
addition, on the basis of comments they have received from program
recipients and candidates who decided not to participate in the
program, officials from several of the agencies we reviewed remarked
that eliminating the tax liability and reducing or prorating the
service agreement could make the program more attractive.
For example, officials from four agencies felt that eliminating the tax
liability on loan repayments would make the program more attractive to
candidates and recipients, and therefore, more effective. Currently,
after withholding income and payroll taxes, the actual repayment amount
applied to the employee's loan is only about 62 percent of the total
payment. According to officials, this diminishes the program's value
and makes it a less attractive incentive. Additionally, because the
repayment is taxable, an official noted they can never completely pay
off a recipient's loan. A DOS official also remarked that many of the
questions they answer about the program concern the tax liability
issue. As mentioned previously, legislation is pending in Congress that
would exclude loan repayments from gross income for federal tax
purposes. In testimony on a previous draft of this legislation, we
stated that the legislation had merit, would help to further leverage
existing SLR program dollars, and would help agencies in their efforts
to attract and retain top talent.[Footnote 14] The loss of revenue from
this change, however, would need to be balanced against other pressing
federal budget needs.
Agency officials had varying views about the service agreements. For
example, DOE officials suggested that the service period should be
comparable to other recruitment and retention incentives. OPM
regulations state that recruitment bonuses, for instance, require a
minimum service period of 6 months. The DOE officials suggested that
when the SLR benefit is used for recruitment, a minimum of a 6-month
commitment would also be appropriate. Along the same lines, an SEC
official remarked that employees felt the repayment should be prorated
if they left the agency before their 3-year commitment is fulfilled. On
the other hand, a DOJ official not in favor of reducing the length of
the service agreement thought the 3-year agreement retained employees
for an appropriate time and that enough flexibility in waiving the
agreement was present to avoid situations that might be unfair to some
recipients.
Agency Officials Say They Plan to Assess the Program's Impact but Need
More Data to Determine Long-term Effects:
Agencies using the program had not yet established processes to measure
the extent to which the SLR program was helping them to meet their
recruitment and retention needs. Agencies need such measurements to
help them determine if the program is worth the investment compared to
other available human capital incentives, such as recruitment and
retention bonuses. Agencies are tracking the extent to which employees
comply with, or do not complete, the terms of their service agreements.
Several officials remarked that almost all employees are completing
their terms of service, indicating the program is helping retention, at
least in the short term.
Agency officials did report that based on anecdotal evidence, they
believe the program helps to make their agency more attractive to
potential job candidates and helps them retain high quality employees.
A GSA official said that, although it has not surveyed employees
formally, informal feedback from them about the program is positive,
and GSA managers using the program report being able to fill their
positions with candidates who have the qualifications desired. An SEC
official noted that the program appears to be attractive to prospective
hires because the agency receives numerous inquiries about how the
program works. DOS recruiters also report that one of the questions
frequently asked by those considering federal service is the level of
the department's assistance in paying off student loans.
When asked about ways to measure the program's long-term effects,
officials from several agencies suggested tracking the attrition rates
of program recipients as one measure. However, the officials noted that
to do so, they would need to monitor attrition rates for at least 3
years, since recipients sign a 3-year service agreement and relatively
few leave during this time. Monitoring the number of employees who
resign after the agency repaid their loans could indicate whether
recipients were working for the agency just long enough to have their
student loans repaid. Fiscal year 2006 will be the first year a
substantial cohort of federal employees would have completed the
minimum 3-year service requirement.[Footnote 15] In addition, a DOJ
official believed that reviewing the attrition rates and career paths
of its Honors Attorneys participating in the program would be helpful,
since these are generally highly sought-after individuals. Thus, if
DOJ's attrition rates decline, this could indicate that the SLR program
is having a positive impact. DOJ is also adding questions to its honors
program application about awareness of the attorney SLR program and
whether it influenced the applicant's decision to apply.
Recognizing that agencies in some cases will need multiyear data to
measure the SLR program's long-term effects, it is nevertheless
important that agencies using the program decide on and put in place
program goals and methods to track indicators of success when they
implement the program. This will help them to establish an initial data
baseline they can use to track changes as a result of the program,
determine what data they should collect over time, and begin to collect
that data. In addition, agencies would not have to wait to implement
other options for monitoring program effects. For example, several
agency officials noted that they will use employee survey data or
responses from exit interviews to gauge how much impact the SLR
incentive had on employees' decisions to join or stay with the agency.
Agencies could conduct such surveys and collect these data now or when
initiating their programs, and periodically over time, as an indicator
of program results.
We recognize that gauging the program's direct effect on recruitment
and retention trends may be difficult because student loan repayments
are not likely to be the only major factor in an employee's decision to
join or stay with an agency, although the incentive may help to tip the
scale in the agency's favor. Other factors, such as labor market
conditions, could also affect these decisions. In prior work, we have
described similar difficulties federal managers face in developing
useful, outcome-oriented measures of performance and proposed that
agencies collaborate more to develop strategies to identify performance
indicators and measure contributions to specific outcomes.[Footnote 16]
We also recognize that OPM and the CHCO Council could help to
facilitate this coordination.
OPM and the CHCO Council Have an Important Role in Assisting Agencies
with the SLR Program:
As the President's agent and adviser for human capital activities,
OPM's overall goal is to aid federal agencies in adopting human
resources management systems that improve their ability to build
successful, high-performing organizations. Likewise, legislation
creating the CHCO Council highlighted the importance of agencies
sharing information and coordinating their human capital activities,
and we have reported that the CHCO Council could help facilitate such
coordination. OPM has taken a number of steps to provide agencies with
information and guidance on the SLR program. For example, OPM posts
informational materials on its Web site including a fact sheet,
applicable laws and regulations, questions and answers, sample agency
plans, and OPM's annual reports to Congress about the SLR program. In
its fiscal year 2004 report to Congress, OPM reported more extensively
on agencies' experiences with implementing the program than it had in
previous years. For instance, the report included information on the
barriers agencies faced in implementing the program and whether
agencies were using specific metrics for measuring program
effectiveness. In September 2004, OPM held a focus group to explore
whether the agency is a good source of program information and what
types of problems agencies are typically encountering with the program.
According to OPM, the focus group included representatives from several
agencies using the SLR program. These representatives shared successes
with the SLR program, obstacles they faced in using it, and suggestions
for program improvements.
Agency officials' comments about OPM's assistance were mixed. DOS
officials said they consulted with OPM in the early stages of their
implementation process, but DOJ officials reported they had not
requested assistance from OPM. SEC officials noted that while their
contact with OPM had been limited, they would have liked more concrete
answers to their detailed questions involving program implementation.
DOT officials see themselves as having primarily a reporting
relationship with OPM. A DOE official commented that OPM has been a
strong advocate of the SLR program, providing the guidance the agency
needed to implement it. Nevertheless, a number of these officials
suggested that more coordination across the agencies using the program
would be helpful, and OPM may be in the best position to do this.
As we previously highlighted, agency officials pointed to the need to
partner with other agencies to find more efficient ways to implement
their SLR programs. They said some improvements would involve sharing
information more readily, such as ways to tailor the program to fit
their particular needs, as well as easing administrative burdens
associated with the program. Given the range and cumbersome nature of
the activities involved in operating the program, officials said they
could use help in identifying improvements to the program. For example,
OPM, working with the CHCO Council, could sponsor additional forums, an
interagency working group, or even training sessions, to encourage
information sharing. One topic for these forums and this collaboration
could also be developing measures of program effectiveness. OPM itself,
in its most recent report to Congress on the SLR program, stated that
an agency challenge has been to determine appropriate measures. By
helping agencies address this challenge, OPM could help to determine if
there is a common subset of measures or indicators that agencies could
track and report to OPM to assess the SLR program's impact
governmentwide.
Conclusions:
Federal agencies have a large degree of discretion in structuring SLR
programs to meet their unique needs, and the SLR program shows promise
as an effective tool for attracting and retaining the talent needed to
sustain the federal workforce. The federal government faces potential
workforce problems now and in the years ahead, including the fact that
its employees are retiring in greater numbers. Therefore, recruiting
and retaining a new wave of talented individuals, who view the federal
government as an employer of choice, is imperative. To address how best
to meet this human capital challenge, agencies will need to be able to
identify and select the recruitment and retention incentives that are
most appropriate and effective for achieving this goal. In addition, to
make the most effective use of monetary incentives such as the SLR
program, streamlined and efficient administrative processes for
implementing such programs need to be in place, and decision makers
need concrete evidence that such programs are achieving agency and
overall federal workforce goals.
OPM, working with the CHCO Council, may be in the best position to help
agencies work together to identify potential SLR program changes and
then determine the most cost-effective ways to implement them. If the
program continues to grow, making it easier to administer will help
ensure agencies make maximum use of available funds to recruit and
retain key talent, so critical in a time of fiscal constraints.
Likewise, OPM and the CHCO Council could build on efforts to date and
continue to facilitate coordination across agencies, in particular
helping them to determine what data to collect and assess as indicators
of the program's results. In addition, OPM may be able to better report
to Congress on the impact of the SLR program governmentwide if it works
with the agencies to determine if there is a subset of common
indicators all agencies could annually track and report to OPM.
Recommendations for Executive Action:
Consistent with OPM's ongoing efforts in this regard, we recommend that
the Director of OPM, in conjunction with the CHCO Council, take the
following actions to help improve the SLR program's efficiency and ease
of administration, and to assess results:
* Working with the agencies, determine where program streamlining and
consolidation of agencies' administrative tasks are most feasible and
appropriate, and design ways to implement these program improvements,
especially those that could be implemented governmentwide and the most
cost-effective ways to implement them. Examples of program improvements
that could provide valuable help to agencies and ease the
administrative burden include creating a central database of student
loan lender information and establishing a shared service center
arrangement for student loan repayments.
* Continue and expand on its efforts to provide agencies assistance and
to help facilitate coordination and sharing of leading practices by,
for example, conducting additional forums, sponsoring training
sessions, or using other methods.
* Help agencies determine ways in which they can monitor long-term
program effects on their recruitment and retention needs, such as
determining data to collect and use as indicators of effects. This, in
turn, could provide a consistent set of governmentwide indicators that
would allow OPM to assess, and report to Congress on, the program's
overall results achieved.
In addition, with respect to the selected agencies using the SLR
program most extensively, we recommend the following actions:
* The Secretary of State: Build on current efforts to measure the
impact of DOS's SLR program by determining now what indicators DOS will
use to track program success, what baseline DOS will use to measure
resulting program changes over time, what data DOS needs to begin to
collect, and whether DOS could use periodic surveys to track employee
attitudes about the program as additional indicators of success.
* The United States Attorney General: Build on current efforts to
measure the impact of DOJ's Attorney Student Loan Repayment Program by
determining now what indicators the department will use to track
program success, what baseline DOJ will use to measure resulting
program changes over time, what data DOJ needs to begin to collect, and
whether DOJ could use periodic surveys to track employee attitudes
about the program as additional indicators of success.
* The Chairman of the Securities and Exchange Commission: Build on
current efforts to measure the impact of SEC's SLR program by
determining now what indicators SEC will use to track program success,
what baseline SEC will use to measure resulting program changes over
time, what data SEC needs to begin to collect, and whether SEC could
use periodic surveys to track employee attitudes about the program as
additional indicators of success.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Director of OPM, the
Secretary of State, the Attorney General, the Chairman of SEC, the
Administrator of GSA, the Secretary of Energy, the Secretary of
Transportation, the Secretary of Commerce, the Commissioner of SSA, the
Chair of EEOC, and the Administrator of SBA. OPM, DOS, DOJ, and DOE
provided written comments on the draft report, which are included in
appendixes III, IV, V, and VI respectively. SBA provided a comment on
the report via e-mail and the Director of the Office of Human Resources
Management stated, on behalf of the Secretary of Commerce, that it
concurred with the report. SEC, DOT, SSA, and EEOC provided technical
comments, and where appropriate, we have made changes to the report to
reflect all of the agencies' technical comments. GSA reported that it
had no comments on this report.
The following summarizes significant comments provided by the agencies.
* OPM generally agreed with the recommendations and stated that it will
continue its efforts to promote effective human capital strategies and,
as part of these efforts, will work with the CHCO Council to improve
the administration of the SLR program and facilitate the sharing of
best practices to improve program efficiency. OPM also stated that it
would assist the agencies in establishing data requirements for
tracking the use of student loan repayments and noted the agency
anticipates a greatly improved ability to track and measure the success
of the SLR program.
* DOS fully supported the recommendations and stated that it looks
forward to working constructively with OPM to identify possible areas
of program consolidation and to share best practices. The department
reported that it is committed to establishing additional program
indicators this year and is aware of the need to measure and track the
impact the SLR program has had on both civil and foreign service
recruitment and retention efforts.
* DOJ did not express an opinion about the report or the
recommendations but stated that the department has already started to
develop ways to measure the impact of the attorney SLR program on
attorney retention. DOJ also emphasized that it will most likely take a
number of years of data collection before it accumulates sufficient
data to provide meaningful statistics.
* DOE stated that the report did not fully describe the efforts of OPM
in assessing program implementation as part of its annual reporting
process to Congress. We added language in the report to more
comprehensively characterize what OPM included in its most recent
report. DOE also suggested that GAO recommend that OPM assist agencies
in measuring the effectiveness of specific student loan repayment,
recruitment, and retention incentives by including questions in the
Federal Human Capital Survey. While this may be a feasible and
effective approach to collecting data on program results, we did not
prescribe the methods OPM should develop or use to measure the
effectiveness of the program, but instead recommended that OPM work
jointly with the agencies and the CHCO Council to devise these means.
* SBA said that the agency will periodically monitor the use of the
program in other agencies through the CHCO Council so that should the
need arise, SBA will be in a position to implement the best aspects of
other agencies' programs.
We are sending copies of this report to other interested congressional
parties, the Director of OPM, the Secretary of State, the Attorney
General, the Chairman of the SEC, and the heads of the other federal
agencies discussed in this report. In addition, we will make copies
available to other interested parties upon request. This report also
will be made available at no charge on GAO's Web site at [Hyperlink,
http://www.gao.gov]. If you or your staff have any questions about this
report, please contact me at (202) 512-6806 or [Hyperlink,
larencee@gao.gov]. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of the
report. Other contributors are acknowledged in appendix VII.
Signed by:
Eileen Regen Larence:
Director, Strategic Issues:
[End of section]
Appendixes:
Appendix I: Objectives, Scope, and Methodology:
The objectives of our review were to identify:
* why selected executive branch agencies are using or not using the
student loan repayment (SLR) program,
* how agencies are implementing the SLR program, and:
* what results and suggestions agency officials could provide about the
program and how they view the Office of Personnel Management's (OPM)
role in facilitating the program's use.
To address these objectives, we first reviewed and analyzed OPM's
annual reports to Congress on the SLR program[Footnote 17] to obtain
governmentwide data on agencies' use of the program and to help
identify our case study agencies. We also consulted with an official at
the Congressional Research Service (CRS) to discuss its research on the
SLR program, and we reviewed CRS's reports to Congress on student loan
repayment for federal employees. We interviewed officials from the
Partnership for Public Service, an organization with an objective of
helping to recruit and retain excellence in the federal workforce, to
hear its views on the program's effectiveness governmentwide, and
officials from GAO's human capital office to get background information
on program implementation.
We then identified a set of federal agencies varying in size and
mission that had established SLR programs, were in the process of
establishing programs, or had chosen not to use them. We selected the
Department of State (DOS), the Department of Justice (DOJ), and the
Securities and Exchange Commission (SEC) as case study agencies because
they were among the largest users of the SLR program in fiscal years
2003 and 2004, while the General Services Administration (GSA) and the
Department of Energy (DOE) are users of the program but give fewer loan
repayments on a case-by-case basis.
We selected the Department of Transportation (DOT) and the Department
of Commerce (Commerce) because they are large departments that were in
the process of implementing SLR programs. Since we started our review,
DOT has begun to make loan repayments. The Social Security
Administration (SSA), the Equal Employment Opportunity Commission
(EEOC), and the Small Business Administration (SBA) are among the
larger agencies that have chosen not to use the program. The agency
selection process was not designed to be representative of the use of
the SLR program in the federal government as a whole, but rather to
provide illustrative examples of why and how agencies decided to use
the program or chose not to use it.
We interviewed agency officials, such as human capital officers, SLR
program managers, and recruitment directors, from the selected
agencies, and obtained available documentation, such as strategic
workforce plans, recruitment and retention worksheets, SLR
implementation plans, and other documents associated with administering
the program. In addition, we met with officials from OPM to gain a
governmentwide perspective of agencies' SLR programs and with officials
from the Department of Education to discuss the department's Direct
Loan Program and its interaction with agencies making student loan
repayments. After reviewing and analyzing agency responses, we used the
supporting documents that some of the agencies provided to further
develop our analysis of their use of the program. We did not observe or
evaluate the operation of the agencies' SLR programs. To assess the
reliability of the number of employees receiving student loan
repayments and SLR repayment cost data, we compared the OPM-reported
data with data we received from the selected agencies. We determined
the data were sufficiently reliable for the purposes of the report. Our
review was conducted in accordance with generally accepted government
auditing standards from July 2004 through June 2005.
[End of section]
Appendix II: Background Information on the Case Study Agencies:
This appendix provides background information on our 10 case study
agencies. These agencies varied in their mission and size. The agencies
also face unique recruitment and retention challenges and have
different strategies for addressing them.[Footnote 18]
U.S. Department of State (DOS):
DOS is a cabinet-level federal agency responsible for U.S. foreign
affairs and diplomatic initiatives with a mission of creating a more
secure, democratic, and prosperous world for the benefit of the
American people and the international community. Headquartered in
Washington, D.C., DOS has 250 embassies and consulates worldwide with
approximately 40,000 employees comprised of foreign service employees,
civil service employees, and foreign service national employees. DOS's
recruitment goals include outreach to a broader segment of the U.S.
population by increasing its presence at business and other
professional schools. DOS also recruits top quality candidates with
management skills and language skills in Arabic, Chinese, and other
difficult languages.
U.S. Department of Justice (DOJ):
DOJ is a cabinet-level agency whose mission is to lead foreign and
domestic counterterrorism efforts, enforce federal laws, provide legal
advice to the President and to all other federal agencies, investigate
federal crimes and prosecute violators, operate the federal prison
system, and ensure the civil rights of all Americans. DOJ is
headquartered in Washington, D.C., and has 61 unit agencies nationwide.
The department has approximately 100,000 employees working in
occupations such as security and protection, legal, compliance and
enforcement, and information technology. Currently, DOJ's hiring
challenges relate to combating terrorism. The department places
priority on hiring candidates with foreign language and intelligence
analysis expertise and Federal Bureau of Investigation counterterrorism
agents. DOJ is moving to develop and implement a departmentwide
recruitment strategy that focuses on leveraging resources for common
occupations, sharing "best practices" cases on the Internet,
establishing relationships with targeted universities, and
participating in job and career fairs.
U.S. Securities and Exchange Commission (SEC):
SEC's mission is to protect investors; maintain fair, orderly, and
efficient markets; and facilitate capital formation. The agency is
headquartered in Washington, D.C., and has 11 regional and district
offices. SEC has approximately 3,800 employees in occupations such as
securities attorneys, accountants, and examiners. The agency has
developed a formal, centralized recruiting program to coordinate its
recruiting efforts for these occupations. The agency also recently
created the SEC Business Associates Program to introduce business
professionals to regulation of the securities markets and the work of
the commission. Individuals with master's degrees in business or other
related fields can apply directly to the program. The program offers 2-
year internships designed to provide on-the-job training for talented
individuals, with eligibility for conversion to a permanent position.
U.S. General Services Administration (GSA):
GSA's mission is to help federal agencies better serve the public by
offering, at best value, superior workplaces, expert solutions,
acquisition services, and management policies. Headquartered in
Washington, D.C., GSA has regional offices in 11 cities nationwide. The
agency has over 12,000 employees working in information technology,
accounting and budgeting, administrative and program management, and
business and industry. Currently, GSA's workforce is relatively stable,
with an average separation rate of 5 to 6 percent. The agency hires an
average of 900 employees annually. GSA seeks candidates who have strong
customer service, acquisition, information technology, realty,
financial management, and project management skills.
U.S. Department of Energy (DOE):
DOE is a cabinet-level agency whose mission is to advance the national,
economic, and energy security of the United States; promote scientific
and technological innovation in support of that mission; and ensure the
environmental cleanup of the national nuclear weapons complex.
Headquartered in Washington, D.C., DOE has regional power
administrations, laboratories, and technology centers nationwide. The
department has approximately 15,000 employees who work in engineering,
physical sciences, compliance and enforcement, and quality assurance.
DOE's recruiting efforts focus on information technology, foreign
affairs, and intelligence, as well as areas such as physical sciences
and project management. The department's outreach efforts include
participation in job and career fairs, partnerships with minority
organizations, and distribution of position vacancy announcements to a
variety of minority and advocacy organizations.
U.S. Department of Transportation (DOT):
DOT is a cabinet-level agency whose mission is to serve the United
States by ensuring a fast, safe, efficient, accessible, and convenient
transportation system that meets national interests and enhances the
quality of life of the American people, today and into the future. The
department is headquartered in Washington, D.C., and has offices
nationwide. DOT has approximately 56,000 employees who work in various
professional fields such as community planning and engineering. The
department is focused on sustaining its current workforce numbers.
DOT's top priority will be to recruit air traffic controllers because
roughly half of the number of current air traffic controllers could
retire by 2012. In 2003, DOT created a Corporate Recruitment Workgroup
that coordinates participation at various recruitment conferences and
career fairs. The department has also addressed some of its entry-level
hiring needs by developing a Career Residency Program, a 2-year program
with a goal of broadening the search for talented transportation
specialists, engineers, and information technology professionals.
U.S. Department of Commerce (Commerce):
Commerce is a cabinet-level agency whose mission is to promote economic
growth and security through export growth, sustainable economic
development, and economic information and analysis. Headquartered in
Washington, D.C., Commerce's unit agencies, such as the National
Oceanic and Atmospheric Administration, the Bureau of the Census, and
the International Trade Administration, have offices nationwide. The
department has more than 36,900 employees in a variety of professional
fields. Commerce estimates it could lose one-fifth of its current
workforce to retirement by 2007, and the department plans to focus its
recruitment efforts on a variety of positions such as mathematical
statisticians, chemists, patent examiners, and trade specialists.
Commerce is developing comprehensive college outreach relations and
partnerships to recruit entry-level workers and coordinate and partner
with trade associations, professional societies, and alumni
organizations to attract experienced applicants.
U.S. Social Security Administration (SSA):
SSA's mission is to advance the economic security of the nation's
people through compassionate and vigilant leadership in shaping and
managing America's social security programs. Headquartered in
Baltimore, Maryland, SSA has regional and field offices nationwide. The
agency has approximately 65,000 employees in a variety of professional
fields including the social sciences and information technology. Over
the past several years, SSA has aggressively recruited between 3,000 to
4,000 employees, most at the entry level. SSA focuses recruiting
efforts on positions providing direct service to the public, such as
claims representatives as well as information technology professionals.
SSA has created a National Recruitment Coordinator position to develop
an agencywide recruitment strategy and marketing campaign that
highlights the work and impact of the agency. The agency's recruitment
and marketing plan coordinates nationwide and on-campus recruitment.
SSA has also recently launched a new campaign to attract veterans to
the agency.
U.S. Equal Employment Opportunity Commission (EEOC):
EEOC's mission is to ensure equality of opportunity by vigorously
enforcing federal laws prohibiting employment discrimination through
investigation, conciliation, litigation, coordination, adjudication,
education, and technical assistance. The agency is headquartered in
Washington, D.C., and has 51 field offices nationwide. EEOC has
approximately 2,500 employees working in various positions such as
attorneys, mediators, and investigators. On the basis of historical
trends, EEOC will separate, due to expected retirements, at least 100
employees annually for the next few years. Depending on the amount of
separation savings, EEOC may have the opportunity to backfill selected
positions based on workload and other factors. In addition, EEOC
recently announced plans to reorganize the agency by reducing levels of
management, opening two new field offices, and strengthening the
existing field offices.
U.S. Small Business Administration (SBA):
SBA's mission is to maintain and strengthen the nation's economy by
aiding, counseling, assisting, and protecting the interests of small
businesses, and by helping families and businesses recover from
national disasters. Headquartered in Washington, D.C., SBA has regional
offices nationwide. The agency has approximately 3,000 employees
working in business analysis, contracting, and financial analysis.
Currently, SBA recruitment is limited to replacing those who leave the
agency. The Office of Human Resources centrally manages recruitment
from headquarters and uses its recruitment Web site to communicate with
prospective candidates. SBA recruitment and outreach efforts also
involve using on-line newspapers to advertise work opportunities.
[End of section]
Appendix III: Comments from the Office of Personnel Management:
OFFICE OF THE DIRECTOR:
UNITED STATES OFFICE OF PERSONNEL MANAGEMENT:
WASHINGTON, DC 20415-1000:
JUL 06 2005:
Ms. Eileen Regen Larence:
Director, Strategic Issues:
Government Accountability Office:
441 G Street, NW.
Washington, DC 20548:
Dear Ms. Larence:
Thank you for the opportunity to comment on the Government
Accountability Office's (GAO's) draft report, entitled "Federal Student
Loan Repayment Program: OPM Could Build on Its Efforts to Help Agencies
Administer the Program and Measure Results" (GAO-05-762).
We were pleased to see that the Office of Personnel Management's
(OPM's) reports on the Federal Student Loan Repayment Program for FY
2001 through FY 2004, which provide Governmentwide data on agencies'
use of the program, were helpful in preparing GAO's draft report. Many
of the successes and concerns identified in GAO's report also were
reported by agencies in OPM's reports.
OPM is proud to embrace its leadership role in assisting Federal
agencies to improve the strategic management of their workforces to
better accomplish their missions. We will continue our efforts to
promote effective human capital strategies, such as using the student
loan repayment program, to build successful, high-performing
organizations. As part of those efforts, we will work with the Chief
Human Capital Officers Council to improve the administration of the
student loan repayment program and to facilitate the sharing of best
practices to improve the efficiency of the program.
OPM has had limited ability to assist agencies in establishing data
requirements and indicators to track the effect of the student loan
repayment program on their recruitment and retention efforts. Much of
the data concerning student loan repayments is available in agency
payroll systems which, up until now, have not provided information to a
Governmentwide OPM database. As we transition from the Central
Personnel Data File (approximately 97 human resources data elements) to
the Enterprise Human Resources Integration (EHRI) data warehouse (more
than 400 human resources, training, and payroll data elements), OPM
will have a greatly improved ability to track and measure the success
of this program. Building from EHRI, we can assist agencies in
establishing data requirements for tracking the use of student loan
repayments. Once data become available in EHRI, we can create a
baseline against which agency progress may be measured. Further, the
establishment and operation of HR shared service centers under the
Administration's HR Line of Business initiative, which will result in a
small number of providers serving multiple agencies, may be a cost-
effective way to consolidate and automate the administration of student
loan repayments.
We suggest a technical edit in your report. On page 2, the percentage
of student loan repayments made by five agencies in FY 2004 should be
81 percent, not 79 percent. (A total of 2,945 employees received
student loan repayment benefits in FY 2004. Of that number, 2,388
repayment benefits were provided by five agencies.)
We appreciate the opportunity to provide comments on your draft report
on the Federal student loan repayment program. If you have any further
questions, please contact Nancy Kichak, OPM's Acting Associate Director
for Strategic Human Resources Policy, at (202) 606-0722.
Sincerely,
Signed by:
Linda M. Springer:
Director:
[End of section]
Appendix IV: Comments from the Department of State:
United States Department of State:
Assistant Secretary and Chief Financial Officer:
Washington, D.C. 20520:
Ms. Jacquelyn Williams-Bridgers:
Managing Director:
International Affairs and Trade:
Government Accountability Office:
441 G Street, N.W.
Washington, D.C. 20548-0001:
JUL 1 2005:
Dear Ms. Williams-Bridgers:
We appreciate the opportunity to review your draft report, "FEDERAL
STUDENT LOAN REPAYMENT PROGRAM: OPM Could Build on Its Efforts to Help
Agencies Administer the Program and Measure Results," GAO Job Code
450338.
The enclosed Department of State comments are provided for
incorporation with this letter as an appendix to the final report.
If you have any questions concerning this response, please contact
Cynthia Nelson, Program Analyst, Bureau of Human Resources, at (202)
647-2655.
Sincerely,
Signed by:
Sid Kaplan (Acting):
cc: GAO - Trina Lewis;
DGHR - W. Robert Pearson;
State/OIG - Mark Duda:
Department of State Comments on GAO Draft Report FEDERAL STUDENT LOAN
REPAYMENT PROGRAM: OPM Could Build on Its Efforts to Help Agencies
Administer the Program and Measure Results (GAO-05-762, GAO Job Code
450338):
We appreciate the opportunity to comment on your draft report, "Federal
Student Loan Repayment Program: OPM Could Build on Its Efforts to Help
Agencies Administer the Program and Measure Results." The report is a
useful review of the Student Loan Repayment (SLR) Program at 10
Executive Agencies, including the Department of State.
The Department of State fully supports GAO's Recommendations for
Executive Action and looks forward to working constructively with OPM
to identify possible areas of program consolidation and to share best
practices.
The report recommends that the Department build on current efforts to
measure the impact of our SLR program by determining now what
indicators we will use to track program success, what baseline we will
use to measure resulting program changes over time, what data we need
to begin to collect, and whether we could use periodic surveys to track
employee attitudes about the program as indicators of success. The
Department is committed to establishing additional program indicators
this year and is aware of the need to measure and to track the impact
that the SLR program has had on both our Civil and Foreign Service
recruitment and retention efforts. We are currently developing an on-
line application system for our SLR program in 2006 that not only will
collect more detailed statistics but also will allow us to measure more
easily employee satisfaction with the program.
[End of section]
Appendix V: Comments from the Department of Justice:
U.S. Department of Justice:
Justice Management Division:
Management and Planning Staff:
Washington, D.C 20530:
July 6, 2005:
VIA EMAIL:
Corrected Original:
Eileen Regen Larence:
Director, Strategic Issues:
Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Larence:
The Department of Justice (DOJ) received the Government Accountability
Office's (GAO) draft audit report entitled Federal Student Loan
Repayment Program: OPM Could Build on Its Efforts to Help Agencies
Administer the Program and Measure Results, (GAO-05-762). The following
comments respond to portions of the text, the findings, and the
recommendation for DOJ.
Recommendation: The United States Attorney General: Build on current
efforts to measure the impact of the Department's Student Loan
Repayment Program by determining now what indicators the Department
will use to track program success, what baseline DOJ will use to
measure resulting program changes over time, what data DOJ needs to
begin to collect, and whether DOJ could use periodic surveys to track
employee attitudes about the program as additional indicators of
success.
Comment: The Department already started to develop ways to measure the
impact of the ASLRP on attorney retention. Several proposals are under
review. For example, the DOJ employee Exit Survey is currently being
revised to, among other things, explore the extent to which the ASLRP
program and receipt or non-receipt of student loan assistance may have
impacted an attorney's decision to cease employment at the Department.
Also, the Office of Attorney Recruitment and Management together with
the Personnel Staff and the Finance Staff, all of the Justice
Management Division, are exploring the feasibility of tagging
employees' general records files to allow the compiling of statistical
reports on the employment durations of attorney employees who receive
and who do not receive loan assistance. If such data compilation is
feasible, we will consult with statistical experts on the usefulness
and validity of a variety of possible measurements, including:
1. A comparison of the employment duration of those who apply to the
ASLRP program and receive loan assistance versus those who apply and do
not receive assistance.
2. A comparison of the employment duration of HP attorneys who receive
ASLRP assistance versus HP attorneys hired in the same period who do
not receive loan assistance either because they do not apply, or do not
qualify, or are not selected.
3. A comparison of the employment duration of all attorney employees
who receive ASLRP assistance versus all other attorney employees.
4. The yearly separation rate of all attorney employees versus those
who are receiving or have received loan assistance from ASLRP.
Whether such measurements prove calculable remains unknown. Further, we
would not expect to have descriptive statistical analyses for a number
of years even if the data can be obtained. We understand that it most
likely will take a number of years of data collection before DOJ
accumulates sufficient data to provide meaningful statistics.
Finally, with regard to how the ASLRP is funded, the GAO should
consider that, beginning in FY 2005, almost 30 percent of the program
costs will be paid centrally with the balance coming from the
individual DOJ components that participate. The GAO may not have
realized this change in practice. The draft says, on page 18, simply
that the FY2004 ASLRP costs were born by the individual components.
We appreciate the opportunity to comment on this report. Technical
corrections are addressed on a separate page, which is attached.
If you have any questions regarding our comments, please contact me at
(202) 514-3101.
Sincerely,
Signed by:
Richard P. Theis:
Acting Assistant Director:
Audit Liaison Group:
Management and Planning Staff:
Hardcopy by first class mail:
Attachment:
[End of section]
Appendix VI: Comments from the Department of Energy:
Department of Energy:
Washington, DC 20585:
July 1, 2005:
Ms. Eileen Regen Larence:
Director, Strategic Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Ms. Larence:
This is in response to your email to Secretary Bodman dated June 18,
2005, transmitting the draft report entitled "Federal Student Loan
Repayment Program: OPM Could Build on Its Efforts to Help Agencies
Administer the Program and Measure Results" (GAO-05-762). The
Department provides the following comments:
1. General - The report does not adequately describe the efforts of the
Office of Personnel Management (OPM) in assessing program
implementation as part of its annual reporting process to Congress. The
annual report covers an assessment from agencies on the effectiveness
of the use of this program; specific ways OPM can improve its services
to agencies and make the program more effective; any implementation
barriers; and ways agencies promote the incentive. The Department
concurs that resources are needed to measure program assessments and
that OPM can assist with this effort, such as by modifying the Federal
Human Capital Survey to incorporate quantitative data on recruitment
and retention incentives.
Although the GAO report focuses on student loan repayment as one
incentive, the Department acknowledges that this is only one of several
recruitment and retention options available to agencies.
2. Transmittal Letter and Background - These parts describe the
consequence of failing to complete a service agreement in which the
employee must reimburse the agency for the total repayment benefit.
However, it is important to note that exceptions exist that may provide
relief to the employee. We suggest adding, "unless an exception
applies" at the end of the top paragraph on page 2.
3. Results in Brief - Change the word "potentially" to "potential" on
page 6, second paragraph, in the second to last sentence.
4. Background - On page 8, in the second paragraph, the second sentence
is not accurate. The Department reported hiring five employees through
the Student Loan Repayment (SLR) Program in September 2001. The
employees received their payments the following month (in FY 2002).
On page 10, the Department recommends the first sentence of the bottom
paragraph be revised to read "Legislation was also introduced, but not
passed by the last Congress..", since the bill was not passed in the
last Congressional session.
5. On page 15, in the first sentence of the second paragraph under the
subsection entitled "SSA, EEOC, and SBA reported they have no need to
implement the SLR program at this time," the Department recommends
changing the word "features" to "other incentives" in order to avoid
confusion with the use of the term "features" elsewhere in the report.
6. Recommendations for Executive Action - On page 30, the Department
recommends an additional citation under the first section to read, "
recommending OPM assist agencies in measuring the effectiveness of
specific student loan repayment, recruitment and retention incentives
by including questions in the Federal Human Capital Survey."
Thank you for the opportunity to review and comment on the draft
report.
Sincerely,
Signed for:
Susan J. Grant:
Director, Office of Management, Budget and Evaluation/Chief Financial
Officer:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Eileen Larence, (202) 512-6806 or [Hyperlink, larencee@gao.gov]
Acknowledgments:
Trina Lewis, Judith Kordahl, Kyle Adams, Jerome Brown, Sarah Jaggar,
Ashutosh Joshi, Jessica Kemp, Matthew Myatt, and Tara Stephens also
made key contributions to this report.
(450338):
FOOTNOTES
[1] The law was enacted in 1990 (Pub. L. No. 101-510, § 1206(b) (Nov.
5, 1990)) and amended in 2000 (Pub. L. No. 106-398, § 1122 (Oct. 30,
2000)) and 2003 (Pub. L. No. 108-123 (Nov. 11, 2003) and Pub. L. No.
108-136, § 1123 (Nov. 24, 2003)). 5 U.S.C, § 5379.
[2] DOJ, in addition to the SLR programs administered by its units,
implemented the Attorney Student Loan Repayment Program in 2003 to
address both the recruitment and retention challenges the department
faces in managing its attorney workforce.
[3] U.S. Office of Personnel Management, Federal Student Loan Repayment
Program (Washington, D.C.: 2001), Federal Student Loan Repayment
Program (Washington, D.C.: 2002), Federal Student Loan Repayment
Program (Washington, D.C.: 2003), and Federal Student Loan Repayment
Program (Washington, D.C.: 2004).
[4] The CHCO Council, headed by the Director of OPM, is responsible for
advising and coordinating agencies' efforts concerning modernization of
their human resources systems, improvement of the quality of human
resources information, and legislation on human resources operations
and organizations.
[5] The National Commission on the Public Service, Leadership for
America; Rebuilding the Public Service, Task Force Reports to the
National Commission on the Public Service (Washington, D.C.: 1989).
[6] Congressional Budget Office, Measuring Differences between Federal
and Private Pay (Washington, D.C.: November 2002).
[7] 5 U.S.C. § 5379(a)(1)(A).
[8] H.R. 1765, introduced on April 21, 2005, Generating Opportunity by
Forgiving Educational Debt for Service Act of 2005. S. 1255, introduced
on June 16, 2005.
[9] S. 589, introduced on March 11, 2003, Homeland Security Federal
Workforce Act.
[10] The Attorney General's Honors Program is DOJ's recruitment program
for entry-level attorneys and is the only way DOJ hires graduating law
students.
[11] The e-payroll initiative is one of OPM's five e-government
initiatives aimed at changing the way human capital functions and
services are carried out in the federal government. OPM is leading the
effort to collapse the operations of 22 executive branch agencies that
currently run payroll systems into what will eventually only be two
systems.
[12] The service agreement contains a clause stipulating that it is
void if the attorney does not receive the benefit.
[13] GAO, Human Capital: Selected Agencies' Use of Alternative Service
Delivery Options for Human Capital Activities, GAO-04-679 (Washington,
D.C.: June 25, 2004).
[14] GAO, Human Capital: Building on the Current Momentum to Address
High-Risk Issues, GAO-03-637T (Washington, D.C.: Apr. 8, 2003).
[15] An individual employee's cycle will vary depending on the number
of years the employee receives student loan repayments and the service
agreement attached to additional repayments.
[16] See for example, GAO, Results-Oriented Government: GPRA Has
Established a Solid Foundation for Achieving Greater Results, GAO-04-38
(Washington, D.C.: Mar. 10, 2004).
[17] U.S. Office of Personnel Management, Federal Student Loan
Repayment Program (Washington, D.C.: 2001), Federal Student Loan
Repayment Program (Washington, D.C.: 2002), Federal Student Loan
Repayment Program (Washington, D.C.: 2003), and Federal Student Loan
Repayment Program (Washington, D.C.: 2004).
[18] We gathered information on the agencies from our interviews with
agency officials, agency Web sites, and from a 2005 report, Where the
Jobs Are: The Continuing Growth of Federal Job Opportunities, by the
Partnership for Public Service and the National Academy of Public
Administration.
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