Student Loan Repayment Program


7/1/09: This week, NTEU Chapter 293 surveyed the most recent participants in the Student Loan Repayment Program. Thank you to everyone who participated in the survey.

The union received a lot of helpful comments and feedback, and we will be relaying this information to management at the SEC. We wanted to provide you with a brief synopsis of the information that we gleaned from this survey, as well as to respond to comments and questions that we received.

It is clear that the vast lion's share of participants are happy with the Student Loan Repayment Program at the SEC. Nobody reported that their application had been denied by the agency in the most recent round of reimbursements. Furthermore, 93% responded that they were either satisfied (29%) or very satisfied (64%) with the program. And 98% said that their participation in the program was succeeding in its fundamental mission by making them more likely to remain employed at the SEC.

There were a substantial number of participants who were not aware of the fact that the Union negotiated this benefit for them, or that the Union had been required to file national grievances on their behalf to prevent cutbacks in the Student Loan Repayment Program.

By way of background, although the Student Loan Repayment Program has been an available option for federal agencies for years, the SEC was not required to provide this benefit to its employees and, in fact, it did not do so for many years. It was not until NTEU came to the SEC several years ago and negotiated a Collective Bargaining Agreement with the agency that this program was first implemented (see Article 25 of the CBA). The program provides up to $10K per year in reimbursements, up to a total of $60K lifetime, in exchange for a three-year commitment to stay at the SEC.

We are proud say that the Student Loan Repayment Program negotiated by NTEU at the SEC is one of the very best in the federal government. According to the most recent information on the program made available by the Office of Personnel Management (released in 2008 for FY 2007), only 33 federal agencies provided 6,619 employees with a total of more than $42 million in student loan repayment benefits, with an average benefit of $6,377. The SEC is one of the five agencies making the most extensive use of this program, dispensing $3,390,076 -- which represents an impressive 8% of the entire federal government's outlay for student loan reimbursements, despite the fact that the SEC is a small agency. This type of program is a win-win for everyone involved. Employees get their student loans repaid early, enabling them to pursue a career in public service. And the SEC is afforded a powerful recruitment and retention tool to ensure that it continues to attract and keep the best and the brightest. NTEU is proud of its work to bring this program to you. 

A number of participants posted questions regarding whether the program would be continued at the agency. The SEC has indicated that it intends to continue the program in the same form again next year, and the Union has no reason to believe that it will not be continued into the future. This is a welcome change from past positions of the SEC.

Indeed, under previous management, the agency attempted to make several unilateral cutbacks to this important program, all of which the Union succeeded in fighting back by filing national grievances on your behalf. These proposed cutbacks included:

1. Attempting to recover more than three years of reimbursements when an employee leaves the agency before completing his or her three-year commitment. The agency has now agreed that it may only reach back to collect the last three years of reimbursements if for some reason you leave the SEC early.

2. Refusing to make further distributions to employees when their loan balances dropped below $10,000, even if the employee had not yet received the $60K lifetime cap. The SEC is no longer making this argument.

3. Attempting to force employees to make monthly payments on their loans, even when the disbursement they received under the program meant that they were not obligated to make such payments for some period of time under their individual loan agreements. The SEC is no longer imposing this rule.

4. Refusing to reimburse federal PLUS loans, which are loans that parents borrow to help defray the costs of their children's education. PLUS loans are expressly provided in the enabling legislation and regulations thereunder for student loan repayment programs. Retention bonuses are just as important for employees taking out PLUS loans as they are for recently graduated employees paying off their own loans. The agency signed a settlement with NTEU agreeing to continue to reimburse PLUS loans.

Some questioned why reimbursements under the Student Loan Repayment Program are subject to federal income taxes. This is a policy determination that is out of the hands of the SEC and NTEU, and it would require a legislative change to the statute that created the program. The Union has raised this issue with NTEU's Legislative Department.

Other participants noted that it did not seem fair for the agency to require repayment of the entire amount, including taxes already paid by an employee, if the employee leaves the agency before fulfilling his or her three- year commitment. Participants should understand that that the agency is required to demand disgorgement of the reimbursements if an employee does not fulfill the commitment. However, employees can file amended tax returns and get back the taxes they already paid.

Several employees asked if the $60K overall cap would be increased, or if other loans might be included in the future. These types of changes would require legislative changes, and nothing is currently in the pipeline of which we are aware. We have relayed these ideas to the NTEU Legislative Department.

Others raised issues about the short notice of the program provided by the SEC, and about the paperwork requirements for the program. We have relayed these concerns to SEC management. We will continue to work with the agency to improve the process for applying for a loan reimbursement.

Finally, many employees were interested in the work that NTEU is doing on a separate program related to public service student loan forgiveness. To learn more about that program, please click here.

Thanks to all of the dues paying members of NTEU Chapter 293 for making the Student Loan Repayment Program a reality, and for making it possible for the Union to continue to defend this important benefit.