Cash flow problems at the Federal Employee Education and Assistance Fund caused by the overwhelming demand for loans from furloughed federal employees have forced the organization to suspend giving out loans.
“FEEA’s Board and staff are distraught by the necessity of suspending new furlough loans to federal employees. It is always our goal to be able to assist every fed, every time, however, financial circumstances compel us to take a different path at this time. We remain hopeful that new donations and sponsorships will allow us to continue serving needy federal employees as sequestration continues and additional budget constraints threaten federal families.” said FEEA Board president Robert Tobias.
Since the start of FEEA’s fiscal year on May 1, 2013, emergency loan volume has nearly doubled each month, reaching a record high of more than $235,000 out the door in August alone. Average loan volume for FEEA is less than $50,000 per month. Total emergency loans in the first four months of the fiscal year have topped $500,000, or nearly 90% of annual loan volume for the past several years. This unprecedented need has created cash flow problems for the organization, which now must dramatically cut back new loans in order to remain solvent.
Employees who have recently submitted applications for furlough loans will receive an email from FEEA explaining the current situation. The charity will retain the applications of those it is unable to help at this time in hopes the financial situation will improve and it will be able to re-evaluate those applications.
FEEA will continue providing no-interest emergency loans to federal employees who meet FEEA’s general guidelines for financial need. Employees must be having trouble paying for basic living needs like rent/mortgage or utilities due to emergency circumstances beyond their control that have created a significant drop in income or a considerable increase in expenses.
Furloughed employees may still apply if they have other life circumstances beyond furloughs that have created the financial hardship.