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New TSP Loan Rules Now in Effect (6/15)

The Coronavirus Aid, Relief and Economic Security (CARES) Act created special loan rules for TSP participants who have been affected by COVID-19. Under this temporary rule, TSP participants may now borrow more money than ever before – and TSP loan payments may be suspended until the end of 2020.


According to, to be eligible, the participants must meet one of the three criteria outlined. They include:

  1. The participant has been diagnosed with COVID-19
  2. The participant’s spouse or dependent has been diagnosed
  • The participant is experiencing adverse financial consequences (furloughed, laid off, work hours reduced, inability to work, etc).

If a participant qualifies, the total maximum loan amount has been increased from $50,000 to $100,000 and up to 100% of their vested balance instead of the usual 50% max. These loans are available through September 22, 2020. Loans may be applied for on in “My Account” then “Loans”.


Also, those who have active loans and meet the criteria outlined above have the ability to suspend any loan payments until December 31, 2020.  Form TSP-46 must be submitted and received by TSP no later than November 30, 2020. If a participant separates prior to the suspension period being over, the loan will become due and must be paid off within 90 days (or else become a taxable distribution). Just as a reminder, these loan suspensions are NOT automatic and must be requested.


Stay tuned! Next month, another provision is the CARES Act is expected to happen for eligible TSP participants. A one-time withdrawal of up to $100,000 will be available with typical requirements waived (participants need not be at least 59.5 or facing a financial hardship to avoid 10% tax penalty).


Please reach out the federal benefit specialists at GPIS with any questions on how these programs work or if you qualify.


We are here to help. Our goal is to provide you with the knowledge and tools to make educated decisions when it comes to your benefits and retirement. Contact us today!

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