State officials have begun using federal funds to pay job benefits because the state’s unemployment insurance fund has run out of money.

The state Department of Labor and Industrial Relations estimates it will have to borrow $17 million from the federal government by the end of the year to be able to issue unemployment checks. Hawaii is one of 32 states that that are tapping a line of credit with the federal government to pay unemployment benefits.

The DLIR expects to continue borrowing through 2011 and into the first quarter of 2012 at an interest rate of 4 percent. The department’s projections include a $1 million interest payment next September.