Participant P, age 45 and married, is employed by the XYZ Corporation who maintains a qualified IRC 401(k) profit sharing plan, with a plan loan feature and a hardship withdrawal feature. P has been a participant for the last 5 years and has an account balance of $50,000 (based on employer contributions), of which he is 80% vested, and an account balance of $30,000 (based on his pre-taxed salary deferrals). The plan provides only for a lump sum form of payment. P was struck by a car on April 1st and was hospitalized in the months of April and May. As P has out of pocket medical expenses of $25,000, P is deciding whether to take a plan loan or a hardship distribution to pay for these costs. P has no outstanding plan loans and has never taken a hardship distribution. P is deciding whether to take a plan loan or a hardship distribution. Answer the following questions for P: I. The maximum plan loan P can take is $35,000