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Corps to lure officers with loan repayments

For the second consecutive year and for an extra six months of service, the Corps is offering up to $30,000 to pay off student loans for those willing to lead the Few and the Proud.

The offer to extend compensation to new officers with a loan repayment plan was announced recently in a MarAdmin message and is designed to help the Corps reach its goal of fielding 202,000 active-duty Marines by the end of fiscal 2011, according to Capt. Phillip Bonincontri, the Corps’ compensation chief

“It’s not that we’re having difficulties (recruiting), it’s just that we are adding an incentive to help us accomplish that mission,” Bonincontri said.

The Marine Corps is having a banner year on all recruiting and retention fronts, signing up more new Marines than anticipated and retaining more first-term and career enlisted Marines.

For officers, the college loan repayment plan isn’t all that different from what many civilian companies offer new job candidates. It is one of precious few incentives offered to officers for their service.

The Corps’ offer will not be available to service academy graduates, and is offered to officers who sign up between Oct. 1 and Sept. 30, 2009. However, officers who received their commission during fiscal 2008 and begin The Basic School prior to Sept. 30, 2008, also are eligible. The program is slated to run through 2011.

Marine officials estimated about 1,500 officers would take advantage of the program in 2008, and projects roughly the same for fiscal 2009.

One of the main clauses of the offer is that an officer must sign a statement of understanding, either prior to attending Officer Candidate School or upon reporting to The Basic School, that obligates the officer to an additional six months of service, but that won’t exceed 72 months.

The payments will be made in three increments over the course of three years, according to MarAdmin message 373/08.

Bonincontri said federal law dictates that the Corps must make the student loan repayment in increments. If the loan is large enough, however, it can be paid off in one payment.

“If an officer has a $100,000 loan, we will pay $30,000 right away,” Bonincontri said.

The Corps conducted an informal survey of incoming officers and determined that the average student loan debt for an incoming Marine was $18,000.

“So we figured $30,000 would cover the low end and the high end,” Bonincontri said.

Bonincontri stressed that the loan repayment is reserved only for costs associated with education, which includes tuition, books, room and board and associated college or university fees. Marines must submit a statement of understanding that the loan repayment will only cover those costs.

The repayment program will not cover loans that included the purchase of recreation equipment, vacations, alcohol, transportation — including a vehicle — and any purchase not considered to be a valid education expense.

Officers who receive the loan repayment program are encouraged to retain receipts for audit purposes, but receipts will not be required with the statement of understanding concerning the applicability of costs.

An officer must continue to make loan payments until the Corps begins to pay on the loan.

Officers enrolled in the loan repayment program who are booted from the Corps for misconduct will not have to repay the service, Bonincontri said.

Bonincontri said there are no programs in place to lure current officers to sign up for another commitment, which is in stark contrast to the bonus program offered by the Army.

The Army offers Critical Skill Retention Bonuses between $25,000 and $35,000 to captains who are completing their initial service obligations from West Point and ROTC, and who agree to extend their active-duty service by three years. The payment levels are based on an officer’s career branch.

Army captains onboard

Approximately 18,000 Army captains took advantage of the program last year and another 8,000 are expected to take the bonus this year. Captains also have the option of attending graduate school on Uncle Sam’s dime rather than taking the retention bonus.

The Army is also targeting funded graduate school programs at junior officers and cadets. Cadets at West Point and ROTC students can sign up for a program in which they can attend graduate school on the military after they have completed their developmental assignments.

The loan repayment option is not as popular with the Army, as most of its lieutenants are commissioned through funded undergraduate programs like West Point and ROTC scholarships.

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Army Times reporter Jim Tice contributed to this report.