May 22, 2008
A summary of daily news relevant to the federal workforce produced by the
Partnership for Public Service.
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Education Agency's Plan Shores Up Market for Loans to College Students
The New York TimesBy Sam
Dillon and Jonathan Glater
Secretary of Education Margaret Spellings on Wednesday announced a plan committing the federal government to buy college loans for the coming
school year from student lending companies and to take other measures to ensure that despite troubled credit markets, students will have access to
college financing.
The nation's largest student lender, Sallie Mae, immediately praised the loan purchase plan, and said it would continue or perhaps even increase
the breadth of its college lending this year.
"Our commitment is virtually unbounded," Albert L. Lord, Sallie Mae's chief executive, said in a call to colleges.
Several analysts predicted that the Department of Education plan, the result of bipartisan legislation passed last month allowing the government
to buy federally guaranteed student loans from lenders, would significantly stabilize the college lending market.
Dozens of lenders withdrew from participation in the largest government student loan program this spring saying that they could not obtain capital
at a cost that would make student lending profitable.
In a letter to lenders, Ms. Spellings said lenders would have the option to sell to the government student loans issued under the Federal Family
Education Loan Program for the 2008-9 year. The government would pay face value plus accrued interest and origination fees as well as $75 per loan to
cover administrative costs, Ms. Spellings said.
"Many lenders today do not have access to funds at a cost that justifies originating new loans," Ms. Spellings said. "Our plan is designed to
provide viability in the marketplace for lenders who step up and make loans in this difficult environment."
Ms. Spellings also said the department was working to make sure it had the administrative capacity to process as much as $30 billion in loans to
students under its Direct Loan Program, double the program’s loan volume in previous years.
Government officials could not immediately estimate the volume of Treasury funds that might be required under the loan purchase commitment. In
fiscal year 2007, more than 2,000 lenders issued more than $50 billion in student loans under the federal loan Program to 6.8 million borrowers. But
the law authorizing the loan purchase commitment requires that loan purchases be cost-free for the federal government, which is possible because any
loans bought should be repaid with interest by student borrowers.
Congress has ordered the Government Accountability Office to monitor the process.
Ms. Spellings's announcement capped weeks of talks with scores of lending companies that have asked for more help from Washington to continue
their participation in the government's loan programs. They have complained that the global credit crisis has elevated their capital costs. Also, last
year Congress cut the subsidies paid to lenders for federal loans. Representative George Miller, the California Democrat who is chairman of the House
education committee, called Ms. Spellings's plan "a thoughtful approach" to ensuring that students have continued access to loans. A spokeswoman for
Senator Edward M. Kennedy, the Massachusetts Democrat who heads the Senate education committee, also praised the plan.
Andrea L. Murad, senior director at Fitch Ratings in New York, said the plan would probably function as a stop-gap measure rather than a permanent
fix.
"Essentially, it could give some lenders a mechanism to wait things out," Ms. Murad said. "It's just giving them a way to fund the loans in the
short term."
Agencies Boost Use of Hiring Flexibilities
Government Executive
By Tom Shoop
Federal agencies' use of hiring flexibilities has increased substantially in recent years, according to a new Office of Personnel Management
report.
The report found that from fiscal 2004 to fiscal 2007, the number of employees hired under eight special authorities went up more than 48 percent,
from slightly less than 30,000 to more than 43,000. During that same period, the total number of annual new hires went up by less than 2 percent, from
236,000 to 240,000.
"Agencies often claim the traditional ranking and selection procedures of the federal hiring process are the main barriers to attracting qualified
candidates and filling positions with the people they need to carry out their missions," OPM reported. To address such concerns, over the years
Congress has authorized the use of several alternatives to the traditional competitive examining approach to federal hiring.
OPM analyzed the use of eight of them in the report:
- Direct hire authority, which allows agencies to bring on employees without using a formal ranking and rating process when OPM determines there is
a severe shortage of candidates or a critical hiring need.
- The Federal Career Intern Program, allowing appointments to two-year internships that can be noncompetitively converted into career civil service
jobs.
- The Presidential Management Fellows Program, allowing appointments of students in graduate study programs.
- A program allowing direct hiring of people with mental retardation, severe physical disabilities or psychiatric disabilities.
- The Student Career Experience Program, allowing appointments of students to jobs in their area of study.
- A program under the 1998 Veterans Employment Opportunities Act that allows the hiring of veterans who successfully compete under merit promotion
procedures when an agency fills a position from outside its own workforce.
- The Veterans Recruitment Appointment program, which allows agencies to temporarily hire eligible veterans to positions up to the GS-11 level
without issuing vacancy announcements.
- A program allowing the temporary hiring of 30 percent or more disabled veterans at any grade level.
Overall, the percentage of total new hires brought on under the eight authorities went up from 12 percent in 2004 to 18 percent in 2007.
Direct hire authority, sanctioned by the 2002 Homeland Security Act, increased by more than 900 percent from 2004 to 2007, although only 2,105
employees were hired under the authority last year, less than 1 percent of total new hires.
OPM also noted that agencies have increased the use of "category rating," under which they are allowed to place candidates into broad categories
rather than ranking them by individual numeric score. The candidates in the highest category all are referred to hiring officials for consideration.
OPM has found that 26 agencies have implemented policies to use the category rating approach.
Federal labor unions have criticized the rise in the use of alternate hiring authorities and the decline in competitive civil service hiring.
Earlier in May, for example, the National Treasury Employees Union decried the growth of the Federal Career Intern Program. "Far from being a
limited special-focus hiring tool, aimed at providing structured, two-year training and development 'internships,' FCIP is now the tool of choice to
circumvent fair hiring practices," NTEU President Colleen Kelley said. "Vacancy announcements do not have to be posted, veterans' preference rights
are diminished, and agencies have discretion to make selection decisions without following rating and ranking processes or merit promotion plans."
Hires under FCIP increased 147 percent from 2004 to 2007, from about 6,800 to almost 17,000.
For its study, OPM surveyed officials at eight agencies. The majority of supervisors and managers who indicated they used hiring flexibilities
said they were more efficient than traditional ranking and selection procedures and were more effective in producing high-quality employees. But most
managers also said they were not using resources and guidance provided by OPM on the use of flexibilities.
Opportunities For Hispanics Under Review
The Washington
PostBy Stephen Barr
The Equal Employment Opportunity Commission and the Social Security Administration are launching a study group to better understand the problems
that Hispanics face in getting hired and promoted in the government.
Naomi C. Earp, chairman of the EEOC, and Michael J. Astrue, the Social Security commissioner, announced the formation of the working group
yesterday. It will be led by Veronica Villalobos, an adviser to Earp.
Federal employment reports have consistently described Hispanics as underrepresented in the government compared with the nation's labor force. Of
the 2.6 million people in the government, 7.74 percent are Hispanic, the EEOC estimates.
But Hispanics make up less than 4 percent of federal executives, and some data reviewed by the EEOC suggest that the careers of many Hispanics get
stuck at the General Schedule grade 11, which makes it difficult for them to qualify for programs that groom federal leaders.
Although concerns about Hispanic employment in the government have been expressed for at least three decades, EEOC officials say it is time to
review issues and obstacles confronting Hispanics because of the nation's shifting demographics and the substantial turnover projected at many
agencies because of the baby-boom retirement wave.
The study group hopes to pull together preliminary recommendations by August for presentation at a national EEOC conference. Officials hope to
draw on Social Security's successful efforts in recruiting Hispanics and turn them into models for other agencies.
Members of the study group include Milton Belardo of the Commerce Department, Nancy Bosque of Social Security, Delia L. Johnson of the
Broadcasting Board of Governors, Nicolas Juarez of the U.S. Postal Service, Isabel Kaufman of the Justice Department, Eugenio Ochoa Sexton of the
Department of Homeland Security, Beatrice Pacheco of the Transportation Department, Jesse D. Solis of the Air Force and Ram¿n Sur¿s
Fern¿ndez of the Labor Department. All have expertise in civil rights, equal opportunity and diversity issues.
Billing Foul Up at OPM
A computer program error has created a $24.9 million headache at the Office of Personnel Management, and officials are billing federal agencies
for that amount so that payments can be made to contractors who conduct background investigations on federal employees and government contractors.
The error was discovered and corrected in January and involved the processing of background investigations primarily during fiscal 2007 and fiscal
2008, OPM spokeswoman Susan Bryant said in an e-mail. The billing snarl was caused by a computer system programming change made in 2006.
OPM processes as many as 20,000 bills each day related to background checks, which are used to determine whether federal employees and contractors
should be granted security clearances. The computer error affected less than 1 percent of the billing transactions, Bryant said.
The OPM investigations program operates an up to $1 billion "revolving fund" that is used to finance background investigations. Agencies request a
background investigation, and OPM sends them a bill, based on rates that vary according to the type of investigation. An initial top secret clearance
costs about $3,700, while an investigation for a secret clearance costs about $200.
But adjustments to the standard charges are made if agencies request additional work or information or if an investigation gets called off. The
computer error that OPM discovered related to certain types of billing adjustments, Bryant said.
Computers that track the processing of an investigation failed to relay information to the computers used to send bills to agencies, she said. OPM
discovered that adjusted bills were not being properly relayed during a scheduled audit. Officials manually rechecked each of the transactions and are
reconciling agency bills and contractor payments.
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