Annual data · Federal retirement
TSP loans hit $10.81 billion and defaults rose 58% in a year
Federal employees and service members owed $10.81 billion on TSP loans at 31 December 2025, the largest balance in the plan's audited record and 50% above the $7.22 billion owed in 2009. In the same year $503 million of loan balances were declared taxable distributions, meaning they were never repaid, which is 4.66% of the book against 2.99% a year earlier. Read from the independent auditor's reports on 10 September 2026.
17 audited years, 2009 to 2025 Updated annually, each spring
Owed on loans
$10.81bnAt 31 December 2025
Never repaid
$503mDeclared taxable in 2025
Share of the book
4.66%Highest in 13 audited years
Change on the year
58%In balances written off
What is owed
TSP loans outstanding rose 50% between 2009 and 2025
Notes receivable from participants at each 31 December, taken from the audited accounts. This is unpaid principal plus accrued interest across every outstanding general purpose and residential loan in the plan.
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What is never repaid
The share written off jumped from 2.99% to 4.66% in one year
Loan balances declared taxable distributions, as a share of loans outstanding. A loan becomes a taxable distribution when it is not repaid, most often because the participant left federal service still owing on it.
For most of the audited record the amount written off each year moved very little, sitting between $254 million and $367 million while the loan book itself grew. 2025 broke that pattern, with $503 million written off, a rise of 58% on 2024 and the highest share of the book in the record.
What that measures is worth being precise about. A balance is declared a taxable distribution when a participant separates from federal service with a loan outstanding and does not repay it, or when payments stop and are not made up by the end of the following calendar quarter. So the figure is not a read on whether people can afford their payments so much as a read on how many left the payroll owing money, and a single year's jump of this size says more about separations than about household budgets.
What a loan really costs
You repay at the G Fund rate whatever fund the money came out of
The audited accounts state the interest rate directly, and the number that matters is not the rate you pay but the return the borrowed money stops earning.
A TSP loan charges the G Fund rate from the month before the request, fixed for the life of the loan, and the interest is credited back to the borrower's own account. That is why a loan is usually described as paying yourself, which is accurate. The part that goes unstated is that the borrowed money leaves whatever fund it was invested in and earns the G Fund rate until it is repaid.
Since 31 May 2003 the G Fund has compounded at 3.07% a year and the C Fund at 11.39%, a gap of 8.32 points a year. A participant who borrows from a C Fund balance and repays over five years is, on that record, giving up that spread on the borrowed amount for the whole term. Measured after inflation the G Fund side of that comparison returned 0.43% a year, which is the figure to hold in mind when a loan is described as costing you nothing.
None of which says a loan is the wrong answer. It is cheaper than most consumer credit, it does not require a credit check, and a participant facing a genuine emergency has worse options available. The rules that govern eligibility, repayment terms and what happens at separation are on the G Fund tracker for the rate side and will be covered in full when the loan rules page ships.
Where these come from
These are annual figures because annual is what exists. There is no machine-readable participant dataset published anywhere by the Federal Retirement Thrift Investment Board, and the monthly board minutes are narrative prose carrying no tables. What does exist is an independent auditor's report on the Thrift Savings Fund for each December, and every figure on this page is read out of those.
Each report carries two columns, the year it covers and the prior year, so most years appear in two separate audited documents. We cross-checked every overlapping year and all of them agreed, which is the check that made publishing this worthwhile. Two reports, December 2011 and December 2024, are scanned images rather than text and yield nothing to a parser, so those years are taken from the adjacent report's prior-year column instead. The older reports label the line "Participant loans" and the newer ones "Notes receivable from participants (loans)".
Sources
- Federal Retirement Thrift Investment Board, Financial Statements, 17 annual reports, retrieved 10 September 2026
- Thrift Savings Plan, share price history, for the G and C Fund returns
- U.S. Bureau of Labor Statistics, CPI-U, for the real return
The Digest Perspective
A record loan book is a fact about cash flow, not about gold
· Gold IRA Digest Editorial Team
Numbers like these get used as atmosphere. A record loan book and a 58% jump in write-offs are the kind of figures that appear in a sales call as evidence that the system is failing and metal is the answer. They are not evidence of that. They are evidence that a lot of people left federal payrolls owing money, which is a fact about employment and cash flow rather than about the currency or the market.
The honest read is narrower and more useful. If you are carrying a TSP loan, the borrowed portion of your balance is earning the G Fund rate rather than whatever it was in, and over the last two decades that gap ran to 8.32 points a year against the C Fund. That is a real cost, it is happening now, and it has nothing to do with what you think of gold.
The strongest argument against us
Someone will point out that 4.66% of a loan book written off in a year is genuinely unusual and that dismissing it as an employment story could be missing something. That is fair. One year is one year, the series is annual so the next reading is twelve months away, and we will publish it whichever direction it moves. What we are not going to do is build a case on a single data point while it is still the only one.
What we would actually check
Whether you have a loan outstanding right now, because that is the only figure on this page that touches your own balance. Whether the reason you are reading about rollovers is a cash-flow problem, since a rollover does not solve one and a loan at least addresses it directly. And whether anyone has quoted these numbers at you as a reason to move money, because that tells you something about them.
We are not a licensed adviser and none of this is a recommendation to buy.
Questions
TSP loan questions
How much do federal employees owe on TSP loans?
$10.81 billion at 31 December 2025, which is the largest loan book in the plan's audited record and up from $7.22 billion in 2009. That is a rise of 50% across 16 years. The figure is the total unpaid principal plus accrued interest owed by participants, taken from the independent auditor's report on the Thrift Savings Fund.
How many TSP loans are never repaid?
In 2025, $503 million of loan balances were declared taxable distributions, meaning the borrower did not repay and the IRS was notified. That is 4.66% of the outstanding book, against 2.99% the year before, and it is a rise of 58% in a single year. It is the highest share in the audited record.
What interest rate does a TSP loan charge?
The G Fund rate from the month before the loan was requested, fixed for the life of the loan. The audited accounts state that directly. Because the interest is paid back into your own account, the familiar description is that you are paying yourself, and that is true as far as it goes. What it leaves out is that the money on loan is no longer invested in whatever fund it came from, so the real cost is the difference between the G Fund rate and what that fund would have returned.
What happens if I leave federal service with a TSP loan outstanding?
The balance becomes a taxable distribution unless it is repaid. The audited accounts describe the mechanism: a missed payment puts a loan in default, the participant has until the end of the following calendar quarter to pay the overdue amount, and if it is not paid the unpaid balance plus accrued interest is reported to the IRS as a taxable distribution and the loan is closed. The same happens when a participant separates from service and does not repay in full. That is what the $503 million figure above is made of.
Is a TSP loan better than a gold IRA rollover?
They solve different problems and confusing them is expensive. A loan takes money out temporarily and requires repayment on a schedule, with the balance out of the market while it is repaid. A rollover moves the balance permanently into a self-directed IRA, where a custodian fee and a depository storage fee apply regardless of size and the purity rules in section 408(m) govern what bullion can be held. Neither is a way to get cash out without cost. A participant considering either because they need money now is answering a cash-flow question with a retirement-account tool, and that is usually the wrong instrument.
The rate a loan charges is the G Fund rate, and what that fund has returned is on the TSP G Fund tracker. All five funds side by side are on TSP returns since 2003. The terms, the limits and the default clock are on TSP loan rules.