Private Student Loan Forgiveness

The U.S. Small Business Administration has released a form of one page that simplifies the application for the cancellation 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 and included $284 billion of financing to small businesses that needed loans. The money was intended to mitigate the economic effects of the coronavirus pandemic. It also included a requirement that the SBA to issue simplified forms within 24 days of the legislation being signed into law to simplify the procedure of applying for forgiveness. The legislation also contained conditions meant to encourage more loans from community banks, particularly for minority-owned businesses that were unable to obtain loans last year.

Private Student Loan Forgiveness

“The Small Business Administration met the requirement of releasing the one page form for PPP loan forgiveness within 24 hours of the date of enactment the Consolidated Appropriations Act, 2021,” wrote Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published the updated forms.”

First Draw PPP Loan forgiveness terms

Private Student Loan Forgiveness – First Draw PPP loans granted to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24-week covered period following the disbursement of loan:

  • The levels of compensation and employee pay are maintained
  • The proceeds from the loan may be used to pay for expenses for payroll or other expenses that are eligible.
  • At least 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness Conditions

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

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exactly the same manner.
  • The loan funds can be used to cover payroll costs or other expenses that are eligible.
  • A minimum of 60% of the profits go towards the cost of payroll
  • How do I request loan forgiveness and when

A borrower can apply for forgiveness only after all loan proceeds for which the borrower wants forgiveness have been utilized. Borrowers may apply for forgiveness at any time up to the date at which the loan matures. If they do not file for forgiveness within 10 months after the end of the time period that was covered, then PPP loans are not deferred any longer, and the borrower will be required to make payment to their PPP lender.

Download Private Student Loan Forgiveness

Gallery of Private Student Loan Forgiveness

Leave a Comment