Federal Government Jobs

Helping job hunters find, apply for, and land government jobs

Student Loan Repayment

Federal Job Student Loan Payoff

Does the federal government pay off employee’s student loans?

Federal student loan repayment incentive program

The federal government has paid over $658 million in student loan repayment incentives to new hires and current employees just since the program began. Student loan repayment is intended to be a tool for agencies to use when necessary to help them achieve their recruitment and retention goals. The federal student loan repayment program authorizes agencies to repay federally insured student loans as a recruitment or retention incentive for candidates or current employees of the agency.


The program authorizes agencies to set up their own student loan repayment programs to attract or retain highly qualified employees. Any employee is eligible, except those occupying a position excepted from the competitive civil service because of their confidential, policy-determining, policymaking, or policy-advocating nature (ex: Schedule C appointees).


Although the student loan is not forgiven, agencies may make payments to the loan holder of up to a maximum of $10,000 for an employee in a calendar year and a total of not more than $60,000 for any one employee. Employees that accept loan payment are required to sign a service agreement to remain in the service of the paying agency for a period of at least three years. Employees must reimburse the paying agency for all benefits received if he or she is separated voluntarily or separated involuntarily for cause or poor performance. In addition, an employee must maintain an acceptable level of performance in order to continue to receive repayment benefits.

One word of caution. When you accept student loan reimbursement the payments sent to your loan holder are included in the employee’s gross income and in wages for federal employment tax purposes. Therefore, your actual payment will be reduced by the taxes incurred. If the recruiter that offers you a position doesn’t offer a student loan payoff incentive, ask them if they will consider providing this incentive if you accept the position.