New Student Loan Forgiveness Bill

New Student Loan Forgiveness Bill

The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms that meet the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief plan last month that included $284 billion of financing to small businesses that needed loans. The funds were used to offset the economic impact of the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within 24 days after the legislation was adopted to make the process of applying for forgiveness. The legislation also contained conditions designed to facilitate more bank loans by community banks, specifically for minority-owned businesses that were unable to obtain loans in the past.

New Student Loan Forgiveness Bill

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs, stated that the Small Business Administration fulfilled the obligation 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 issued updated forms.”

First Draw PPP Terms of loan forgiveness

New Student Loan Forgiveness Bill – For those who qualify, First Draw PPP loans can be qualified to forgive loans. This happens when the loan is disbursed within an 8 to 24-week period.

  • The levels of compensation and employee pay are maintained
  • The loan proceeds can be used to pay expenses for payroll or other eligible expenses.
  • At least 60% of profits go towards payroll costs

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans given to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week time period after loan payment:

  • Pay and worker levels are maintained in the same way in accordance with the First Draw PPP loan
  • The loan proceeds are spent on payroll costs and other expenses that are eligible and
  • At least 60% of proceeds are spent on payroll costs
  • How do I apply for loan forgiveness , and when

The borrower is eligible for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been utilized. Borrowers can apply for forgiveness anytime up until the date of maturity of the loan. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan are able to receive the loan payment from their PPP lender.

Download New Student Loan Forgiveness Bill

Gallery of New Student Loan Forgiveness Bill


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