Last year, the federal government helped pay down $58.7 million in student loans. Over 33 federal agencies participated in the program and almost 8,500 workers benefited from the program. This might be the only time that we will see that the private sector needs to take some pointers from the federal government. Usually its the other way around.
The Office of Personnel Management released a study at the end of 2014 detailing the impact of the federal government's student loan repayment program. As you might expect, the federal government program has been cited in multiple agencies as a successful way to recruit and retain qualified employees.
Many of the agencies reported favorable results about having this program. For example, the Department of Defense reported:
"this incentive is a useful and effective human capital management tool. The student loan repayment program has proven to be a significant recruitment tool for bringing interns into entry level training positions, and critical fields like engineering and nursing. Defense also reported that the program has proven very effective, as evidenced by the number of inquiries they have received at job fairs at colleges and universities."
As GradFin looks to bring this program to the private sector, it is going to be imperative to take a look at some of the keys to why this program already works successfully in the federal government. One of the keys to success for the federal government program is that it ties workers to a 3 year commitment. That is, if workers want to obtain help from the government to pay down their loans, they must sign up to stay with the agency for 3 years. This service commitment has been instrumental to the federal government program. It should also work in the private sector.
Companies looking to adopt a program should be happy to know that what works for federal workers must also work for private sector workers.
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