UI Update: States Make First Interest Payments, Borrowing Continues
On September 30, 2011, states that had taken out loans from the Federal Unemployment Account (FUA) to pay for Unemployment Compensation (UC) benefits in their state were required to make interest payments on those loans. This was the first time states made interest payments on FUA loans since the enactment of the American Recovery and Reinvestment Act (ARRA; P.L. 111-5), which waived the interest payments and accrual of interest for two years. Though every state either made a full interest payment or qualified for a deferral, state Unemployment Trust Fund (UTF) loan balances still remain at more than $38.7 billion.
This Issue Brief reports on states’ September 30 interest payments, remaining loan balances, potential future penalties, and continued UTF solvency proposals.