Date: May 26, 2015
Subject: Student Loan Repayment Requests
Category: Debt Management
Reference: PS05-23.1, Subject: Student Loan Repayment Requests dated April 17, 2005. PS05-23.2 supersedes PS05-23.1. Please replace that letter with this one.
This letter provides instructions for requesting payment for employees in the Student Loan Repayment Program and forwarding related payroll information to the Defense Finance and Accounting Service (DFAS) Payroll Office. This letter also contains information about the program and its intended use.
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The Student Loan Repayment Program is intended to facilitate the recruitment and retention of highly-qualified employees by allowing agencies to repay part or all of their federally insured student loans. For the complete list of eligible loans, refer to the Student Loan Repayment Fact Sheet:http://opm.gov/oca/pay/studentloan/index.asp
HHS Operating Divisions (OPDIV) and Staff Divisions Heads or their designee have the authority to approve the repayment of student loans in accordance with the criteria established by 5 CFR 575. The official HHS request and agreement form must be used for documentation and approval.
The OPDIV will send the documents to Customer Care Services (CCS) via a service center ticket. CCS reviews the documents to ensure all requested information is provided. Where there are obvious errors or information is missing, CCS will reach back out to the customer. CCS then faxes the completed package to DFAS.
A lump sum payment will be made to the lender identified on the student loan fax coversheet. The amount paid by the agency is subject to all the following maximum limits: $10,000 per employee per calendar year, and a total of $60,000 per employee.
Although a student loan payment is paid directly to the loan holder on behalf of the employee, the employee is nonetheless responsible for the taxes. The student loan repayment is included as taxable income in the employee’s pay record, and tax withholdings are deducted from the payment. For more information on the taxes related to this program, refer to the
Student Loan Repayment Program Questions and Answers on Tax Liability: http://www.opm.gov/policy-data-oversight/pay-leave/student-loan-repayment/#url=(References)
Guidelines for student loan repayment can be found on the OPM website:
Student Loan Repayment Fact Sheet: http://www.opm.gov/oca/pay/studentloan/index.asp
OPM’s Student Loan Repayment Program Service Agreement: http://opm.gov/oca/pay/studentloan/HTML/sample1-attch2.asp
Section 5379 of Title 5, United States Code:
Part 537 of Title 5, Code of Federal Regulations:
For further assistance or for questions regarding the information in this letter, please contact your Payroll Customer Service Team