This Directive was Canceled June 23, 1999.

U.S. Department of Transportation
Federal Highway Administration

NOTICE

1. PURPOSE. To provide general information on changes in the Thrift Savings Plan (TSP) Ioan Program.

2. BACKGROUND. The TSP, a retirement savings and investment plan for Federal employees, includes a loan program as one of its features. Employees who are participants in the TSP may borrow the amount of their contributions and the earnings on them for the purchase of a primary residence, educational expenses, medical expenses, and financial hardship.

3. CHANGES TO TSP LOAN PROGRAM. Changes have been made which extend the previous $1,000 limit on hardship loans and allow participants who already have an outstanding loan to apply for a second loan.

4. DOCUMENTED FINANCIAL HARDSHIP LOANS. The previous financial hardship loan was limited to $1,000 and required only a self-certification of financial need. Participants may now obtain a hardship loan in amounts of $1,000 or more by using a new form, TSP-20-H, Hardship Loan Application. Since it requires financial information in support of the application, the hardship loan is referred to as a "documented hardship loan."

   1. After March 31, 1989, the current self-certified hardship loan will be eliminated from the TSP Loan Program, and only documented hardship loan applications will be accepted. Until that time, participants may apply for the $1,000 self-certified loan by submitting the current Form TSP-20 to the TSP Service Office. Participants who apply and qualify for the self-certified loan, using Form TSP-20, will receive from the TSP Service Office, a TSP Loan Agreement/Promissory Note and associated forms for this loan, along with a copy of the new Hardship Loan Application Form (TSP-20-H). The TSP will ask applicants to accept the $1,000 loan or to cancel the application for the self-certified hardship loan and apply for a larger documented hardship loan, Alternatively, participants may apply directly for a documented hardship loan using the new application form.

   2. Applicants for a documented hardship loan must complete and sign Form TSP-20-H and return it, along with a copy of their most recent Earnings and Leave Statement, directly to the TSP Service Office. At present, the new Form TSP-20-H may only be obtained by calling or writing:

      National Finance Center
      Thrift Savings Plan Service Office
      P.O. Box 61500
      New Orleans, LA 70161-1500
      Telephone (FTS) 680-6050 or (Commercial) 504-255-6050

   3. To be eligible for a documented hardship loan of $1,000 or more, participants must show that their regular monthly expenses exceed their net monthly income (i.e., income after taxes and retirement deductions) and that they do not have sufficient financial assets. Financial assets are defined as cash or other assets that are readily converted to cash. Applicants may also qualify if they have certain defined extraordinary expenses that cannot be covered by one month's net income and if they do not have sufficient financial assets. Other tests for eligibility are outlined in the "Thrift Savings Plan Loan Program" booklet.

5. SECOND TSP LOANS. Participants may now apply for a second TSP loan. Restrictions on the types of loans that may be obtained when the applicant has a current outstanding TSP loan are summarized below:

   If current oustanding loan is:	You may apply for a second loan for:
   	Res.	Ed.	Med.	Self-cert. hardship	documented hardship
   Residential	no	yes	yes	yes*	yes
   Education	yes	yes	yes	yes*	yes
   Medical	yes	yes	yes	yes*	yes
   Hardship
   self-certified	yes	yes	yes	no	yes
   documented	yes	yes	yes	yes*	no**

   * Through March 31, 1989

   ** Initially only one documented hardship loan may be outstanding. At a later date, a second such documented hardship loan may be permitted

6. FOR ANSWERS TO QUESTIONS. Employees may contact their servicing personnel office for additional information . Washington Headquarters employees may call 366-4031. Copies of the TSP Loan Program booklet and the current form TSP-20 for other types of loans may also be obtained from these sources.

This Directive was Canceled June 23, 1999.

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