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Proposed Rule

Repayment of Student Loans

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Office of Personnel Management.


Proposed rulemaking.


The Office of Personnel Management (OPM) is proposing regulations implementing the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001, to authorize Federal agencies to repay federally insured student loans when necessary to recruit or retain highly qualified personnel.


Written comments will be considered if received no later than May 15, 2001.


Send or deliver written comments to Richard A. Whitford, Acting Associate Director for Employment, Office of Personnel Management, Room 6500, 1900 E Street, NW., Washington, DC 20415.

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Michael J. Mahoney, (202) 606-0830 (FAX 202-606-0390).

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The Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001 amended 5 U.S.C. 5379. These amendments: Remove the restriction of this incentive to professional, technical, or administrative personnel; remove the limitation of this incentive to employees covered under General Schedule pay rates; broaden the types of loans which qualify under this part under the Higher Education Act of 1965 and the Public Health Service Act; require agencies to report annually to OPM on their use of this incentive; and require OPM to report annually to Congress on agencies' use of this incentive. These regulations reflect the amendments to 5 U.S.C. 5379.

The repayment authority is one of several flexibilities made available to agencies when trying to attract individuals to the Federal service, or retain highly qualified personnel. The proposed regulations benefit both agencies and employees by expanding the flexibility of this existing incentive.

The proposed regulations amend the following: Purpose, Definition of Employee, Definition of Student Loan, and Records and Reports.


This incentive may be used for employees in occupational series other than professional, technical, or administrative positions.

Definition of Employee

This incentive may be used for employees covered under non-General Schedule (GS) pay rates, providing the non-GS employee meets the other criteria specified under this part.

Definition of Student Loan

The proposed regulations expand the type of loans which qualify for this incentive to include: Subsidized, unsubsidized, Direct subsidized, and Direct unsubsidized Federal Stafford loans; Federal and Direct Federal Plus loans; Direct subsidized, Direct unsubsidized, and Federal Consolidation loans; Defense loans; National Direct Student Loans; Perkins Loans; Nursing Student Loan Program loans; Health Profession Student Loan Program loans; and Health Education Assistance Loan Program loans.

Records and Reports

Agencies will be required to report annually to OPM on their use of this incentive. Agencies must report to OPM: The number of employees selected to receive this benefit; the job classifications of the employees selected to receive this benefit; and the cost for providing this benefit. Cost is the total amount of student loans repayments, not the administrative costs associated with administering the program.

E.O. 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget in accordance with Executive Order 12866.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic impact on a substantial number of small entities because it affects only certain Federal employees.

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List of Subjects in 5 CFR Part 537

  • Administrative practice and procedure
  • Government employees
  • Wages
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Office of Personnel Management.

Steven R. Cohen,

Acting Director.

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Accordingly, OPM proposes to amend part 537 to Title 5, Code of Federal Regulations, as follows:

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1. The authority citation for part 537 continues to read as follows:

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Authority: 5 U.S.C. 5379.

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2. Section 537.101 is revised to read as follows:


This part provides regulations to implement 5 U.S.C. 5379, as amended, which authorizes agencies to establish a program under which they may agree to repay (by direct payment on behalf of the employee) all or part of any outstanding federally insured student loan or loans previously taken out by a candidate to whom an offer of employment has been made, or a current employee of the agency, in order to recruit or retain highly qualified personnel.

3. In § 537.102 the definitions of Employee and Student loan are revised to read as follows:

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Employee has the meaning given that term in 5 U.S.C. 2105, except it does not include an employee occupying a position which is excepted from the competitive service because of its confidential, policy-determining, policy-making, or policy advocating character (i.e., employees serving under Schedule C appointments).

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Student loan means —

(a) A loan made, insured, or guaranteed under parts B, D or E of title IV of the Higher Education Act of 1965; or

(b) A health education assistance loan made or insured under part A of title VII of the Public Health Service Act, or under part E of title VIII of that Act. Start Printed Page 15203

4. In § 537.110 the section heading is revised, the existing text is designated as paragraph (a), and paragraph (b) is added to read as follows:

Records and Reports.
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(b) Before January lst of each year, each agency must submit a written report to the Office of Personnel Management stating when the agency made student loan repayments on behalf of an employee during the previous fiscal year. Each report must include:

(1) The number of employees selected to receive this benefit;

(2) The job classifications of the employees selected to receive benefits under this part; and

(3) The cost to the Federal government for providing benefits under this part.

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[FR Doc. 01-6514 Filed 3-15-01; 8:45 am]