Federal Loan Repayment Assistance Program (LRAP)

One of the biggest benefits of federal employment for recent law school graduates is student loan repayment assistance. Federal agencies are authorized to provide up to $10,000 in loan repayment assistance per year for federally-made, insured or guaranteed student loans with a total lifetime cap of $60,000 per employee. In exchange for each year that an employee accepts this benefit, she or he must commit to working for the federal government for an additional three years. If an employee accepts this benefit and leaves (separates either voluntarily or involuntarily) before this period expires, she or he must repay the full amount.

While not all agencies offer this benefit, many do. In 2014, 33 federal agencies provided more than $58.7 million in loan repayment assistance to their employees.  This represents a 6.5 percent increase in the number of agencies offering a loan repayment program from 2013, and a 10.9 percent increase in agencies’ overall financial investment in this particular incentive. However, the average student loan repayment benefit in CY 2014 was $6,937, a 4.1 percent decrease compared to CY 2013.

The five agencies that provided the most loan repayment assistance in CY 2014 were:

Most notably, the Securities and Exchange Commission used the majority of its loan repayment funds on mission critical occupations, with Attorney-Advisor being the largest category of recipients (371 attorneys received benefits in CY 14) and the JD advantage position Securities Compliance Examiner (32).  The Department of Veterans Affairs also used a large portion of funding on the JD advantage positions of Contract Specialists (116) and Human Resource Specialists (106).

Overall, departments and agencies report that the use of student loan repayment assistance as a recruitment and retention tool for highly skilled workers has been effective.  For example, the Federal Energy Regulatory Commission uses its funds mainly as a retention tool, providing a majority of the benefits to mission critical occupations such as Attorney and Energy Industry Analyst.  Of special note, Housing and Urban Development provided loan repayment assistance to their Presidential Management Fellow in addition to other legally related positions.

Agencies continue to report that the primary barrier to using student loan repayments for recruitment or retention is a lack of overall funding for the program.  Other reported barriers were the corresponding three-year service agreement, the tax liability associated with the student loan repayments, and the yearly cap of $10,000 on benefits.  Some agencies reported candidates were unwilling to commit to three years of service in return for the student loan repayment benefit. Both the tax liability and the cap in relation to rising student loan debt were seen as diminishing the value of the benefit.  However, the primary impediment appears to be need — many agencies do not have hard-to-fill jobs or don’t have difficulty recruiting and retaining employees.

The following departments or agencies provided loan repayment assistance to one or more attorneys: Commerce, Defense, Energy, Health and Human Services, Housing and Urban Development, Justice, Labor, State, Transportation, Treasury, Veterans Affairs, Environmental Protection Agency, Federal Regulatory Commission, Federal Trade Commission, Government Accountability Office, National Aeronautics and Space Administration, Nuclear Regulatory Commission, Pension Benefit Guaranty Corporation, Postal Regulatory Commission, Securities and Exchange Commission, and Surface Transportation Board.

The following departments or agencies provided loan repayment assistance to one or more JD advantage positions: Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, Interior, Justice, Labor, State, Transportation, Treasury, Veterans Affairs, Chemical Safety and Hazard Investigation Board, Federal Regulatory Commission, Federal Trade Commission, Pension Benefit Guaranty Corporation, Postal Regulatory Commission, and Securities and Exchange Commission.

Additionally, 9 agencies recently established student loan repayment assistance programs that they did not use in CY 2014.  These agencies include the Agency for International Development, Commodities Futures Trading Commission, Consumer Product Safety Commission, Federal Housing Finance Agency, Government Printing Office, National Capital Planning Commission, Office of Government Ethics, Overseas Private Investment Corporation, and the U.S. AbilityOne Commission.

To learn more about the Federal Student Loan Repayment Program, visit opm.gov or contact human resources representatives at the federal agencies in which you are most interested. Click here to view the complete report from the U.S. Office of Personnel Management for calendar year 2014.