Sallie Mae Public Service Loan Forgiveness Program

Sallie Mae Public Service Loan Forgiveness Program

The U.S. Small Business Administration has released a 1-page form that makes it easier to apply for the cancellation of Paycheck Protection Program loans. It also includes newly revised 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. This money was used to offset the economic impact of the coronavirus pandemic. It included a requirement for the SBA to issue streamlined forms within 24 hours of the legislation being adopted to make the procedure of applying for forgiveness, along with 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.

Sallie Mae Public Service Loan Forgiveness Program

“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans by 24 days after 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 issued new forms.”

First Draw PPP Terms of loan forgiveness

Sallie Mae Public Service Loan Forgiveness Program – For borrowers who are eligible First Draw PPP loans are eligible to be forgiven. This applies if the loan disbursement occurs within an 8 to 24 week period.

  • Pay and worker levels are kept at a constant level.
  • The proceeds of the loan can be used to pay for payroll costs or other expenses that are eligible.
  • A minimum of 60% of the profits go towards the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans for eligible borrowers can be eligible for loan repayment when the loan is repaid within an 8to 24-week time frame.

  • Employee and compensation levels are kept in the same way in accordance with the First Draw PPP loan
  • The loan funds can be used to pay for the cost of payroll as well as other eligible expenses.
  • At least 60% of proceeds are spent on payroll costs
  • What is the best time to apply for loan forgiveness?

Once all of the loan funds have been utilized the borrower is eligible to be granted forgiveness. The borrower can apply for forgiveness at any time until the loan’s maturity date. If the borrower does not apply for forgiveness within 10 months of the last day of the time period that was covered and the loan is not renewed, PPP loan payments are no longer deferred, and borrowers must make monthly payments to their PPP lender.

Download Sallie Mae Public Service Loan Forgiveness Program

Gallery of Sallie Mae Public Service Loan Forgiveness Program


Leave a Reply

Your email address will not be published.