Student Loan Reimbursement

MnDOT Policy #WF035
Effective: March 8, 2024

Please go to the MnDOT Org Chart to find specific contact information: Org Chart.

Responsible Senior Officer: Deputy Commissioner/Chief Administrative Officer
Policy Owner: Director, Office of Human Resources
Policy Contact: Labor Relations Manager, Office of Human Resources

Policy statement

The Minnesota Department of Transportation (MnDOT) Student Loan Reimbursement Program allows reimbursement for the employee’s student loan payments made on their outstanding student loan balances. MnDOT may disburse student loan reimbursement payments up to two times per year in accordance with the Student Loan Reimbursement Procedures. Student loan reimbursements are subject to the availability of funds and the eligibility criteria, limitations, and conditions provided below.

Eligibility

The employee must be in a permanent classified position working full-time or part-time. An employee who accepts a temporary, unclassified, or work out of class appointment with MnDOT remains eligible.
The employee must have been employed by MnDOT for at least 18 months and be covered by a collective bargaining agreement or compensation plan that provides for student loan reimbursement.
The employee must have satisfactory work performance and be in compliance with all required agency and enterprise training requirements.
The employee must not have exceeded the maximum allowable student loan reimbursement.
The student loan must be for the employee’s education. Spouse, child, and other family member loans are not eligible for reimbursement by MnDOT.
The student loan cannot be consolidated with any other type of loan (for example, home equity loan).
The student loan must be a loan that has or had an outstanding balance within the twelve (12) months prior to application.
The total student loan reimbursement received by an employee through all reimbursement programs, including federal student loan forgiveness, Public Service Loan Forgiveness Program, MnDOT Student Loan Reimbursement, etc., must not exceed the total student loan debt incurred.
Employees receiving tuition reimbursement for employee-initiated education or training within the previous twelve (12) months prior to application are not eligible for student loan reimbursement.

Limitations

Student loan reimbursements must not exceed five thousand dollars ($5,000) per calendar year per employee, up to a maximum of twenty-five thousand dollars ($25,000) in total payments per employee over the entire length of their state service.
Student loan reimbursements are not guaranteed. MnDOT has discretion to determine student loan reimbursements in accordance with the Student Loan Reimbursement Procedures.
Student loan reimbursements are not subject to the grievance procedure.

Conditions

Employees who separate from MnDOT within twelve months after receiving a student loan reimbursement payment must repay the student loan reimbursement payments received in the previous year. The amount required to be repaid will be calculated based on the number of months the employee remained at MnDOT following the student loan reimbursement payment.
Student loan reimbursement payments are conditioned upon satisfactory job performance. MnDOT retains the discretion to delay or deny any student loan reimbursement payments based on job performance.
MMB identifies student loan reimbursement as income. The employee is responsible for supplemental tax withholdings and the employee portion of Social Security and Medicare payroll taxes on the value of the student loan reimbursement. Tax amounts will be withheld from the reimbursement amounts paid which will reduce the amount received on the employee’s paycheck. Note: The Taxpayer Certainty and Disaster Tax Relief Act of 2020 allows for student loan reimbursements to be excluded from federal income tax, Social Security and Medicare taxes through calendar year 2025. The maximum amount that may be excluded from federal taxes is $5,250 per calendar year. Student loan reimbursements remain subject to state income tax.

Reason for policy

MnDOT’s Student Loan Reimbursement Policy exists to support employees in their education and to help reduce their student loan debt. Secondary benefits include increased employee retention and increased ability to attract and hire qualified employees.

This policy follows all applicable administrative procedures, federal and state laws, including tax laws, as well as the provisions of applicable collective bargaining agreements and compensation plans.

Applicability

All MnDOT employees must comply with this policy.

Key stakeholders with responsibilities under this policy include:

Employees
Office of Human Resources
Office of Financial Management

Definitions

Eligible student loan

A loan designated to help post-secondary students pay for college expenses, such as tuition, books, and associated fees for post-secondary education.

Eligible employee

An employee covered by a collective bargaining agreement that provides for student loan reimbursement, and who has been employed by the agency for a period of at least 18 months prior to application for student loan reimbursement.

Responsibilities

Employees

Be familiar with the policy and eligibility requirements.
Complete an application for student loan reimbursement according to the Student Loan Reimbursement Procedures.

Office of Human Resources

Review and process applications for student loan reimbursement applying criteria established in this policy and the Student Loan Reimbursement Procedures.
Allocate reimbursement amounts for each approved applicant.
Notify agency payroll of approved applicants and reimbursement amounts.
Retain approved Student Loan Reimbursement Application and Repayment Forms according to record retention requirements.
Upon employee separation from MnDOT, verify whether the employee received student loan reimbursement payments within the twelve months prior to departure and determine the amount of repayment the employee owes.
Work with the Office of Financial Management to recover funds, when applicable.

Office of Financial Management – Central Office Payroll

Verify whether an applicant has exceeded the maximum allowable student loan reimbursement payments.
Process student loan reimbursement payments as approved by Human Resources.
Track reimbursements and provide reports to Human Resources and management, as requested.

Policy Owner (Director, Office of Human Resources)

Review the policy every two years, or sooner as necessary, to ensure the policy remains up to date.
Ensure procedures, forms, and other documents associated with the policy remain current.
Monitor state, federal, enterprise, agency, or other requirements that apply to the policy or procedures.
Consult with the Office of Chief Counsel to ensure the policy and procedures remain compliant with all state, federal, enterprise, agency, or other requirements.
Ensure that necessary approvals by state or federal agencies are obtained before changes to the policy or procedures are implemented.
Work with the Policy Coordinator to revise the policy and/or confirm its accuracy.
Communicate policy revisions, reviews, and retirements to stakeholders.

Resources and related information

Forms

Student Loan Reimbursement Application and Repayment Form (available during application periods)

Processes, Procedures, and Instructions

Student Loan Reimbursement Procedures

History and updates

Adopted

March 8, 2024

Policy Review

Minor edit made on October 24, 2024 (added note regarding tax exemption)

This policy's next scheduled review is due March 2026.