Understanding Interest on Federal Loans to State UI Funds

Source: National Employment Law Project, Fact Sheet, January 18, 2011

Federal law requires that state unemployment insurance (UI) programs continue to pay benefits to eligible claimants even if the state’s unemployment trust fund becomes insolvent. Title XII of the Social Security Act contains provisions for borrowing from the U.S. Treasury under these circumstances. As unemployment has climbed over the past three years, many state trust funds have been depleted. Currently, 31 states and the Virgin Islands have outstanding loans of $41 billion from the Federal Unemployment Account.

Leave a Reply