Consolidated Appropriations Act 2022 Student Loan Forgiveness

Consolidated Appropriations Act 2022 Student Loan Forgiveness

The U.S. Small Business Administration has released a 1-page form which makes it simpler to request forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms that comply with the latest stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March that included $284 billion of financing for small-scale businesses who needed loans. The money was intended to mitigate the economic effects of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 days of the bill being adopted to make the application process for forgiveness, along with conditions designed to facilitate more bank loans by community banks, specifically for minority-owned companies that struggled to get loans last year.

Consolidated Appropriations Act 2022 Student Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs stated that the Small Business Administration fulfilled the requirement to issue the one-page PPP form loan forgiveness within the first 24 hours from the date of enactment in the Consolidated Appropriations Act, 20,21. This was on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also published new forms that were updated.”

Forgiveness terms in the first draw of PPP loans

Consolidated Appropriations Act 2022 Student Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted total loan forgiveness during the 8- to 24-week covered period following loan disbursement:

  • It’s the same for employee compensation and the.
  • The loan funds are used on payroll expenses and other eligible expenses; and
  • At least 60% of profits are used to pay for payroll expenses

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans for eligible borrowers are eligible for loan repayment if the loan is paid within an 8to 24-week time frame.

  • The levels of compensation and employee pay are maintained in the same manner as is required for the First Draw PPP loan
  • The loan proceeds are spent on payroll as well as other eligible expenses and
  • At least 60% of the proceeds are used for the cost of payroll
  • How do I request loan forgiveness and when to apply

Once all of the loan proceeds have been used, a borrower can apply to be forgiven. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 months after the date they will be able to repay the loan are able to receive payment from their PPP lender.

Download Consolidated Appropriations Act 2022 Student Loan Forgiveness

Gallery of Consolidated Appropriations Act 2022 Student Loan Forgiveness


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