Am I Eligible For Student Loan Forgiveness

The U.S. Small Business Administration has released a form of one page that simplifies the application for the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that are in line with the current stimulus law. 

Congress approved the COVID-19 relief package last month and provided $284 billion of funding to small businesses that needed loans. The funds were used to reduce the economic burden of the coronavirus pandemic. The law requires that the SBA provide simplified forms within 24 hours of the signing into law. This was done to simplify the process of applying for forgiveness. The legislation also contained conditions that encourage community banks to make more loans, especially to minority-owned businesses who had a difficult time getting loans last year.

Am I Eligible For Student Loan Forgiveness

“The Small Business Administration met the requirements to release the one-page form for loan forgiveness under the PPP within 24 days of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released the updated forms.”

Forgiveness terms in the initial draw of PPP loans

Am I Eligible For Student Loan Forgiveness – First Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness within the 8 to 24 week period that follows loan disbursement:

  • It’s the same for compensation and employees.
  • The loan proceeds are spent on payroll costs and other expenses that are eligible and
  • At least 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans made to borrowers who are eligible can be granted total loan forgiveness if they do so during the 8to 24 week time period after loan payment:

  • Employee and compensation levels are kept in the same way as is required for the First Draw PPP loan
  • The loan funds could be used to cover the cost of payroll as well as other expenses that are eligible.
  • At least 60% of the proceeds are spent on payroll costs
  • When and how do I apply for loan forgiveness?

Once all of the loan proceeds have been used, a borrower can apply to be granted forgiveness. The borrower can apply for forgiveness at any point up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months after the date they will be able to repay the loan are able to receive the loan payment from their PPP lender.

Download Am I Eligible For Student Loan Forgiveness

Gallery of Am I Eligible For Student Loan Forgiveness

Leave a Comment