Is Student Loan Forgiveness Program Legit

Is Student Loan Forgiveness Program Legit

The U.S. Small Business Administration has released a single-page form designed to make it easier for applicants to complete the process of applying for forgiveness of Paycheck Protection Program loans, as well as newly updated and revised forms that conform to the requirements of the latest stimulus legislation. 

The COVID-19 relief plan that Congress adopted last month revived the PPP with $284 billion of financing for small-scale businesses looking for forgiven loans to help deal with the financial fallout of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within the first 24 hours of the legislation being adopted to make the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of loans from community banks, particularly for minority-owned companies that were unable to obtain loans in the past.

Is Student Loan Forgiveness Program Legit

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

First Draw PPP Loan forgiveness terms

Is Student Loan Forgiveness Program Legit – First Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness during the 8- to 24-week period after loan disbursement:

  • This is also true for compensation and employees.
  • The loan proceeds are used on payroll expenses and other eligible expenses; and
  • At least 60% of profits go towards the cost of payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans granted to eligible borrowers qualify for full loan forgiveness if during the 8– to 24-week covered period following loan disbursement:

  • The First Draw PPP loan requires that the compensation and employee levels are maintained in the exact same way.
  • The loan funds are used on payroll expenses and other expenses that are eligible and
  • A minimum of 60% of proceeds are used to pay for payroll expenses
  • How do I apply for loan forgiveness , and when to apply

A borrower can apply for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers can request forgiveness at any time up to the date of maturity. If borrowers do not apply for forgiveness within 10 years of the last day of the time period that was covered, then PPP loan payments are no longer deferred, and the borrower will be required to make loan payments to their PPP lender.

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