American Student Assistance Loan Forgiveness

American Student Assistance Loan Forgiveness

The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the latest stimulus law. 

Congress approved the COVID-19 relief plan last month that provided $284 billion of funding for small-scale businesses who needed loans. This money was used to offset the economic impact of the coronavirus pandemic. It included a requirement for the SBA to issue simplified forms within 24 days after the legislation was signed into law to simplify the process of applying for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned companies that had trouble getting loans last year.

American Student Assistance Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs said that the Small Business Administration fulfilled the obligation to issue the PPP form, which is one page long, for loan forgiveness within 24 days from the date of enactment under the Consolidated Appropriations Act, 20,21. This was published on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also released updated forms.”

Forgiveness terms in the initial draw of PPP loans

American Student Assistance Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted total loan forgiveness during the 8- to 24-week period after the disbursement of loan:

  • The same goes for the employee compensation and the.
  • The proceeds from the loan may be used to cover the cost of payroll as well as other eligible expenses.
  • At least 60% of proceeds go to payroll costs

Second Draw PPP Loan Forgiveness Terms

Second Draw PPP loans given to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week time period after loan payment:

  • Pay and worker levels are maintained in the same way as is required for the First Draw PPP loan
  • The loan proceeds are spent on payroll and other eligible expenses; and
  • At least 60% of profits are used for the cost of payroll
  • How and when to apply for loan forgiveness

A borrower may apply for forgiveness after the loan’s proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers can request forgiveness at any time up to the date of maturity. Borrowers who do not request forgiveness within 10 months after the date they will be able to repay the loan are able to receive loan payments from their PPP lender.

Download American Student Assistance Loan Forgiveness

Gallery of American Student Assistance Loan Forgiveness


Leave a Reply

Your email address will not be published.