I. PURPOSE

This directive provides policy for repaying student loans. This directive supplements USDA policy. The Program is one of several incentives available to agencies to attract individuals to the Federal service or to retain highly qualified individuals.

II. CANCELLATION

This directive cancels FSIS Directive 4537.1, Revision 1, dated 9/16/2005.

III. REASON FOR REISSUANCE

This directive is revised to reflect changes in service agreement requirements.

IV. REFERENCES

• 5 CFR Part 537, Repayment of Student Loans
• 42 U.S.C., Public Health Service Act
• DR 2570-002, Waiver of Employee Claims from Erroneous Payments of Pay and Allowances
• DR 4050-537, Repayment of Student Loans
• National Finance Center Bulletin, Title I, Payroll/Personnel Manual, 01-15, September 21, 2001
• Public Law 101-510, National Defense Authorization Act for FY 1991, November 9, 1990 (5 U.S.C. 5379)
• Public Law 108-136, National Defense Authorization Act for FY 2004
• Public Law 89-329, Higher Education Act of 1965, November 8,1965 (20 U.S.C. 1071 to 1099) and amended by Public Law 105-224, October 7, 1998 (20 U.S.C. 1087)

Internet sites:

• http://www.nfc.usda.gov
• http://www.opm.gov/fedregis/html/archive.htm
• http://www.hqnet.usda.gov/intranet/refer.htm
• http://www.opm.gov/oca/pay/studentloan/index.htm

V. ABBREVIATIONS AND FORMS

The following appear in their shortened form in this directive:

• AA Assistant Administrator
• HCP Human Capital Policy
• Form AD-1151 Recommendation and Approval of the Repayment of Student Loan(s)
• Form AD-1152 Service Agreement for a Receipt of Repayment of Student Loan(s)

VI. POLICY

It is FSIS policy to use the Repayment of Student Loans Program to recruit and attract to Federal service, individuals for hard-to-fill positions or individuals with unique or highly desirable skills. The Agency also uses the Program to retain employees who possess unique qualifications, or perform a function or service essential to the Agency mission. The Program is discretionary and contingent on available funding. The Program provisions are available on a case-by-case basis for positions that meet the eligibility and repayment criteria.

VII. DEFINITIONS

A. Employee. An individual currently working for FSIS.

B. Student Loan. An insured or guaranteed loan made under the Higher Education Act of 1965 Title IV Parts B, D, or E; or a health education loan made or insured under the Public Health Service Act Title VII Part A.; or Title VII Part E. of that Act. Before deciding to grant a student loan repayment, visit http://www.opm.gov/oca/pay/studentloan/index.htm to verify a list of qualifying student loans.

C. Service Agreement. A written agreement between the Agency and an employee where the employee agrees to a specific employment period with the Agency of not less than 3 years, in return for payments toward a prior student loan.

VIII. ELIGIBILITY AND INELIGIBILITY FACTORS

A. Employees holding the following appointments are eligible to receive student loan repayments:

1. Permanent employees on career-conditional or career appointments.
2. Term appointment employees with at least 3 years of service remaining on their appointments.
3. Temporary employees serving on appointments leading to conversion to a term or permanent appointment.
4. Employees on excepted appointments leading to a term conversion or permanent appointment, including but not limited to the:

• a. Career Intern Appointment Program.
• b. Presidential Management Fellowship Program.
• c. Student Career Experience Program.

B. Employees holding the following appointments are not eligible to receive student loan repayments:

1. Employees under Schedule C appointments.
2. Non-career Senior Executive Service appointments.
3. Employees on Student Temporary appointments or other appointments limited to less than 3 years.

IX. REPAYMENT CRITERIA

A. A student loan is eligible for repayment under this directive if it is:

1. Made, insured, or guaranteed under the Higher Education Act of 1965 Title IV Parts B, D, or E.
2. A health education assistance loan made or insured under the Public Health Service Act Title VII Part A. or Title VIII Part E.

B. Loan repayment decisions are made on a case-by-case basis on the written determination that without offering loan repayment benefits, it would be difficult to either fill the position with a highly qualified candidate, or retain a highly qualified employee in that position.

C. Loan repayments may be used with other available recruitment and retention incentives.

D. The requesting office prepares and submits Form AD-1151, Recommendation and Approval of the Repayment of Student Loan(s), with a written request through the responsible AA or Deputy AA to the Director, HCP. (See Attachment 1). The form is also available through:

1. Outlook Public Folders: Agency Issuances/Forms/USDA Forms (AD).
2. USDA Intranet site: http://www.hqnet.usda.gov/intranet/refer.htm.

E. If used for recruitment, the request must explain the:

1. Difficulty experienced or expected in filling the job (example: shortage location).
2. Difficulty in recruiting individuals with high or unique qualifications.
3. Special Agency need (examples: critical mission function, specialized knowledge, or qualification needed in the Agency).
4. Justification for any required employment period that exceeds 3 years.

F. Each determination for recruitment purposes (including the amount to be paid), requires the employee to actually enter on duty in the recruited position before the loan can be paid.

G. If the request is an incentive to retain an employee, the request must demonstrate that in the absence of a loan, the:

1. Employee would likely leave for employment outside of Federal service.
2. Employee’s departure would affect the Agency’s ability to carry out an activity or perform a function deemed essential to the Agency mission.

H. Repayment of student loans is an incentive to attract and retain employees in Federal service. Its use is discretionary. Regulation prohibits using this incentive to retain employees who leave for positions with other Federal agencies, or to recruit employees from other Federal agencies.

X. CONDITIONS FOR PAYMENT

A. Payments. Student loan payments:

1. Are discretionary and subject to the conditions in the written service agreement between the Agency and the employee.
2. Are applied to the indebtedness outstanding at the time that the Agency and the employee enter into an agreement.
3. Begin after the employee enters on duty with the Agency. Student loan repayment benefits are in addition to basic pay and any other form of compensation otherwise payable to the employee involved.
4. Are made by the National Finance Center directly to the holder of the loan by electronic transfer.

B. Tax Withholdings. When payment is made, tax withholdings are deducted or applied.

C. Multiple Loans. More than one loan may be repaid as long as the loan repayments do not exceed the regulatory limit.

XI. LOAN REPAYMENT AMOUNT

A. The loan payment amount is based on the extent of the Agency’s need for the employee’s services and the Agency constraints to commit funds.

B. The Agency may pay up to $10,000 per employee per calendar year, or a total career payment of $60,000 per employee. The totals are the maximum amounts that can be paid to a Federal employee. If multiple payments are to be paid, consider the availability and timeframe for committing funds.

XII. EMPLOYEE RESPONSIBILITY

Employees must:

A. Make loan payments on the portion of the remaining loan(s) that is their responsibility. The Government’s payments do not exempt employees from this responsibility or from their liability for the loan(s).

B. Pay for any income tax obligations resulting from the loan repayment benefit.

XIII. SERVICE AGREEMENTS

A. Before any loan repayments are made, the employee must sign the AD1152, Service Agreement for a Receipt of Student Loan(s), which acknowledges their commitment to complete a specific period of employment with USDA. (See Attachment 2.) The form is available through:

1. Outlook Public Folders: Agency Issuances/Forms/USDA Forms (AD).
2. USDA Intranet site: http://www.hqnet.usda.gov/intranet/refer.htm.

B. The employee is required to reimburse the Agency if the employee:

1. Involuntarily separates for misconduct or performance reasons before completing the service agreement. If the employee is involuntarily separated for reasons other than misconduct or performance (examples: reduction-in-force (RIF), downsizing, etc.), reimbursement is not required.
2. Voluntarily separates before completing the service agreement. This includes resignations from Federal service, voluntary retirements, or transfers outside USDA to other Federal agencies.

C. If the employee fails to complete the service agreement, the entire amount of the loan paid by the Agency is recovered according to USDA regulations governing offset from indebted Government employees or through provisions governing debt collection if the individual leaves Federal service. The service agreement must outline the conditions requiring reimbursement of the loan repayment.

D. The minimum employment period established under a service agreement is 3 years, regardless of the loan repayment amount. However, longer service agreements can be specified, but justification must be provided with the written request to use the incentive (see subparagraph IX. E. 4.).

E. A service agreement does not constitute a right, promise, or entitlement for continued employment or noncompetitive conversion to the competitive service.

XIV. SERVICE AGREEMENT WAIVER

A. The Administrator may waive, in whole or in part, a right of recovery of an employee’s debt.

B. To request a waiver, the requesting office prepares a justification and submits it through the responsible AA or Deputy AA to the Director, HCPD, for review. The request must describe why recovery would be against equity and good conscience or against the public interest.

C. The Director, HCPD, forwards the justification to the Administrator with a recommendation to approve or disapprove the request.

See full PDF for Attachment

• Sample Form AD-1151, Recommendation and Approval of the Repayment of Student Loan(s) 2
• Sample Form AD-1152, Service Agreement for a Receipt of Repayment of Student Loan(s) 3
• Questions and Answers on the Agency’s Repayment of Student Loans