Student Loan Forgiveness Application

Student Loan Forgiveness Application

The U.S. Small Business Administration has released a form of one page that makes it easier to apply for forgiveness of Paycheck Protection Program loans. It also includes newly revised forms that are in line with the latest stimulus law. 

The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion in financing for small-scale businesses looking for forgiven loans to help to deal with the effects of economic collapse from the coronavirus outbreak. It also included a requirement that the SBA to issue streamlined forms within 24 hours after the legislation was approved by the lawmaker to streamline the process of applying for forgiveness, along with conditions that aim to increase the number of bank loans by community banks, specifically for minority-owned businesses that struggled to get loans in the past.

Student Loan Forgiveness Application

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

First Draw PPP Conditions for loan forgiveness

Student Loan Forgiveness Application – For those who qualify First Draw PPP loans are suitable for loan forgiveness. This applies when the loan is disbursed within an 8 to 24-week timeframe.

  • Pay and worker levels are kept at a constant level.
  • The loan proceeds are used on payroll expenses as well as other expenses eligible for reimbursement; and
  • A minimum of 60% of the profits go towards expenses for payroll

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness, if within the 8to 24-week duration following loan payment:

  • The First Draw PPP loan requires that the employee and compensation levels are maintained in the exact same way.
  • The loan proceeds are used on payroll and other expenses that are eligible and
  • A minimum of 60% of the proceeds go to the cost of payroll
  • What is the best time to apply for loan forgiveness

When all of the loan’s proceeds have been used the borrower is eligible to be granted forgiveness. Borrowers can request forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 month of the end date of the loan are eligible to receive payment from their PPP lender.

Download Student Loan Forgiveness Application

Gallery of Student Loan Forgiveness Application