More than 1,000 IRS employees jilted student loan repayment program

The IRS promises to repay outstanding student loans for employees, but more than 1,000 of them cheated the terms of the agreement, according to a new audit by the tax agency’s inspector general.

Investigators said a majority of the employees messed up the documentation of their loans and repayments. Roughly 200 others got overpayments on their loans, and another 200 had other violations, such as leaving the IRS before they had fulfilled their three-year service agreement.

The IRS also waited two years before initiating debt collection on its recalcitrant employees, the inspector general said.

“If the IRS does not establish clear procedures to enforce the service agreement and debt policy, employees who committed to stay with the IRS may leave without repaying their loan benefit back to the IRS,” the auditors said.

The IRS also waived more than $10 million in student loan debt for other employees who took the Trump administration’s buyouts last year — but many of those also broke the terms of their loan agreements.

Investigators said the government ended up waiving nearly $900,000 in debts that should have been repaid, the audit said.

Alex Kweskin, the IRS’ chief human capital officer, said in an official response to the report that they have made strides under President Trump to fix things.

“The IRS is committed to strengthening oversight,” he said.

He said the agency paused new applications for the student loan repayment program in January 2025, and hasn’t made a decision on whether to revive it.

The agency’s student loan repayment office went from eight employees to three as of last summer.

And Mr. Kweskin said they are reviewing the employees already in the program who were identified as out of compliance, and extending service agreements to make sure the agency gets its full benefit.

The IRS went on a massive hiring spree during the Biden administration, going from about 73,000 employees during the first Trump administration to roughly 102,000 employees as of January 2025.

Investigators said in the new report that about 9,700 employees were listed as approved for student loan repayments in 2023 and 2024.

Mr. Trump has been on a cutting spree at the agency, reducing it to 74,000 employees as of last December.