Federal Student Loan Forgiveness Form

The U.S. Small Business Administration has released a form of one page that simplifies the application for forgiveness of Paycheck Protection Program loans. The form also contains newly updated forms to comply with the current stimulus law. 

The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgiveness loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The law requires that the SBA issue simplified forms within the first 24 hours of the legislation’s signing into law. This is to make it easier to apply for forgiveness. Additionally, it included conditions that encourage community banks to lend more specifically to minority-owned companies who were unable to obtain loans last year.

Federal Student Loan Forgiveness Form

“The Small Business Administration met the requirement of releasing the single-page form for loan forgiveness under the PPP within 24 hours of the date of the enactment of 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 published new forms that were updated.”

Forgiveness terms for the initial draw of PPP loans

Federal Student Loan Forgiveness Form – For borrowers who are eligible, First Draw PPP loans are qualified to be forgiven. This is when the loan payment is made within an 8 to 24-week timeframe.

  • It’s the same for employee compensation and the.
  • The loan proceeds are spent on payroll costs as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the profits go towards expenses for payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8– to 24-week covered period following loan disbursement:

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exact same way.
  • The loan proceeds are spent on payroll costs and other eligible expenses; and
  • Minimum 60% of proceeds go to expenses for payroll
  • How do I apply for loan forgiveness and when

The borrower is eligible for forgiveness once all loan proceeds for which the borrower has applied for forgiveness have been utilized. Borrowers are able to apply for forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months after the date of expiration of the time period that was covered the PPP loan payments can not deferred any longer, and borrowers will begin making payment to their PPP lender.

Download Federal Student Loan Forgiveness Form

Gallery of Federal Student Loan Forgiveness Form

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