Feds Now Auto-Cure Your Sloppy TSP Loan Misses
Published Date: 12/18/2025
Rule
Summary
If you’re a federal employee or service member with a TSP loan, good news! Starting December 18, 2025, missed loan payments can be automatically caught up through resumed payroll deductions, making it easier to stay on track. No more hassle with checks or extra payments—just let your paycheck do the work and avoid loan defaults.
Analyzed Economic Effects
3 provisions identified: 3 benefits, 0 costs, 0 mixed.
Payroll Deductions Cure Missed TSP Loans
If you are a federal employee or service member with a Thrift Savings Plan (TSP) loan, starting December 18, 2025 the first payroll deduction after an interruption will be applied to the earliest missed loan payment and subsequent deductions will apply to the next missed payments on a rolling basis. This gives you extra time to cure missed payments and avoid a loan default, but it does not extend the loan's maximum term.
Cure Period Tied to Treasury Rule
The rule defines the TSP "cure period" by reference to the maximum period allowed under Treasury Regulation 26 CFR 1.72(p)-1. This means the time you have to make up missed payments is set to the maximum timeframe permitted by that Treasury rule.
Permitted Make-Up Payment Methods
If you miss a TSP loan payment and have not resumed payroll deductions, you may make up the missed payment by personal check, guaranteed funds (money order), or direct debit. These methods remain available for submitting a one-time make-up payment to avoid a deemed distribution.
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