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Federal Daily News

Unions bash proposal to offset student loan rate with higher fed retirement contributions


Republican House and Senate leaders have sent the president a letter containing a proposal to offset the reduced interest rate of federally subsidized student loans for one year with a permanent increase in federal employee retirement contributions. The proposal — one of two options offered in the letter — drew a sharp response from federal union leaders, who urged President Obama to reject the proposal.

“Not only is federal retirement entirely unrelated to student loan interest rates, requiring federal employees to pay more for their retirement benefit is nothing more than an unjustified income tax increase on one small segment of the population, the working and middle class Americans who make up the federal government’s workforce,” American Federation of Government Employees National President John Gage wrote in a May 31 letter to the president.

The interest rate offset proposed by the Republican leadership would come from amounts generated by a measure in the administration’s fiscal 2013 budget proposal that would hike federal employee retirement contributions by an additional 1.2 percent of salary. That increase would be phased in by 0.4 percent in each of three calendar years through 2015.

The lawmakers' letter noted that the House has passed a bill that contains a measure calling for a significantly larger hike in additional employee contributions — 5 percent of salary more than current rates — phased in over five years.

National Treasury Employees Union President Colleen Kelley also sent a missive to the White House in response to the proposal.

“While we have not always agreed with your budget proposals, you have consistently pushed for balanced proposals that require burdens to be broadly shared,” Kelley wrote. “On the other hand, the House and Senate Republican leadership has sought to single out the federal workforce as virtually the only source of acceptable spending cuts and revenue increases.”


 

Reader comments

Fri, Jun 8, 2012

Wait just a darned minute.......people that go to college should be able to pay their student loans when they get the degree they are in college to earn. If you cannot get a job in your field, look for something else to pay your bills. Paying ones bills should be a priority....I sent my daughter to school so she would hasve a good paying job and pay her own bills. She has done just that. I am getting little enough in my retirement and I shouldn't have to do without for someone I don't even know. Let THEM work for a living...I do.

Thu, Jun 7, 2012 JB Pennypacker

Let's require the military retirement system to pay for lower cost student loans - wait, the military is off limits. Maybe the cost of lower student loans should come from Congress's pay. Oh, wait! The rich aren't supposed to pay for anything!

Thu, Jun 7, 2012

I propose the savings could be found for this and other programs be capping all contractor salaries and benefits to $250,000. Since contractors out-number federal workers in agencies by at least 7 to 1 this should make sense to both sides and save even more money than even the feds contributing to their pensions. Moverover contractor salaries range in professional positions range from 150,000 to 700,000. Oh well, I guess one proposal is linked to president's or vice president's salary. So I guess for those non-fed lawyers we have to pay them the 400,000 instead of the 90-150000 we pay the feds lawyers. Or the VA fed specialist doctors who get 200000 might quit and we might not be able to find a private DR specialist who will work for that paltry 400000 fee. I am so tired of this spin on both sides.

Wed, Jun 6, 2012 Elaine

That the loans come from the federal government in the first place, there is no need for the rates to rise to over 7.9 percent and to double if something isn't done. I am a federal worker at the GS6 level with a college education (that happens to mean nothing in my agency) but cost a fraction of what my two kids have to pay today. Yes I help them. It stinks and it is stifling. The fact that America is more than frustrated with a Congress that in response turns the wrath on the federal employee . . .well, America can continue to allow them to reduce the force and compensation . . .they will get what they deserve. That will be the bottom of the barrel for employees.

Tue, Jun 5, 2012

We are paying 4 years worth of parent loans for our daughter's college education. Even though she does not have a job, she does not qualify for a subsidized loan because of our incomes. My pay has been frozen, and I am paying for my own child's education (unsubsidized), and now they want me to help pay for someone else's loan????!!!Don't borrow the money if you cannot pay it back. Since we had to borrow money, that means we don't have the cash. How are we supposed to pay off our own loans while they force me to help pay someone else's. This does not even take into account that not everyone that gets financial aid needs it. In those great words of JFK: "ASK NOT WHAT YOUR COUNTRY CAN DO FOR YOU. ASK WHAT YOU CAN DO FOR YOUR COUNTRY." I already pay taxes that help the poor and the unemployed. I am not made of money.

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