Wednesday, 6 March 2013

The Federal Student Loan Program - The reality not the misconceptions

Ok so let me break this down for people.  The first line

'Children of a congress member do not have to pay back their college student loans. How nice!'

Is false.  There is no program for congress members to wave student loans of any of their family.  There is a program to aid congressional staff members, that are elible, to pay back student loans but this is the same program that is offered to all federal employees.

The Federal Student Loan Program

Note the Employee Coverage that states.

"Any employee (as defined in 5 U.S.C. 2105) is eligible, except those occupying a position excepted from the competitive civil service because of their confidential, policy-determining, policy-making, or policy-advocating nature (e.g., Schedule C appointees)."

That means elected representatives are NOT eligible.

The actual program was enacted in 2001.  It can pay up to $10,000 a year for the federal employee and is capped out at $60,000 and must be PLUS Loans (these are federal loans). Part of the program is that the employee has to sign a contract and remain in their position for, at least, 3 more years else they must pay back the benefits they have received.

In 2011 34 government agencies participated in the program with just over 10,000 federal employees claiming. The average claim being $7,091

Since 2003 the number of federal employees taking part in the program had increased about 23.43% per year.  Instead of me rambling on with numbers here is a chart showing the adoption figures.

Before you freak out about the 72 million dollars spent on this program last year remember this is part of their benefit package even if they don't claim.  This is budgeted for just as much as employees wages are.  The federal employees don't make much.  My manager while I was a Marine stationed at Albany GA was a GS11.  Her salary in 2011 would have been about $65,371 and she was in charge of well over 100 civilians and Marines.

The Federal student loan repayment program is a great incentive that helps those that need it the most.  IE the lower your pay scale the more the program helps you.  For those that aren't following.  If you are a federal employee and a GS5 you start out at $27,431 a year.  So IF you could claim the entire $10,000 amount per year that is a much bigger percentage of your total package then if you were a GS11 with 20 years of service making $65,371 a year.  That in itself is telling too.  The difference between a first year GS1 and a GS11 with 20 years of federal service is less then 4x. Think about your job.  Think about how long you have been there. Now think about the pay difference between you and some 18 year old kid just starting at that company with no experience and tell me the difference in pay between you two.  Odds are it is much larger then if you were employed by the federal government.

Now this program was specifically initiated to help retain federal employees.  As any person with a bit of management experience knows it is costly to have high employee turn over rates.  Someone who has been at the job for 5 years is going to be more beneficial then a new employee coming on board.  This is especially true in the Civil services where pay differences are often fairly minor.

Now to boot the Senate actually have lower caps then the program allows.  I.E. the Senate staff members can claim a maximum of $500 a month and is capped at $40,000.

So with the facts out of the way let me now focus on what Fox News reported, without even fact checking.

From The Sean Hannity Show on 23rd of August 2010 Dick Morris and Sean Hannity had this exchange

Dick Morris Do you know — my wife Eileen just told me yesterday that staff in the House of Representatives and in the Senate do not pay student loans back? The government pays it for them?
Sean Hannity I didn’t know that.
Dick Morris The House of Representatives last year spent $25 million paying the salary, student loans of their staffers.

Now I love that source.  Dick Morris's wife told him.  Well fuck me ... it must be true.  No need to fact check that.

The exchange makes you think that elective officials are part of that.  The face book post distorts it even further.

Notice the bit of "staff in the House...".  Representatives and Senators can not claim from the program.  They are NOT eligible   The second line about the House of Representatives is less then half true.  First off the amount the House spent was about 12 million and again it was over 3,000 employees with the average claim at just $2,000 and no claim more then $6,000.

That is the reality.  Fox News complaining about valid programs that even in the short term make the government more efficient by retaining employees.  This is what Fox News is complaining about.  Efficient government.  But, of course, they lie and distort the actual fact to enrage their viewers.

Now there are a lot of things you can be upset with Congress members about.  But this is not one of them and 5 minutes on Google would show you that.


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