Student Loan Forgiveness Plan

Student Loan Forgiveness Plan

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

The COVID-19 relief package that Congress adopted last month revived the PPP with $284 billion of funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. It also included a requirement that the SBA to issue simplified forms within 24 days after the legislation was adopted to make the procedure of applying for forgiveness. It also included conditions meant to encourage more loans from community banks, particularly for minority-owned businesses that were unable to obtain loans in the past.

Student Loan Forgiveness Plan

“The Small Business Administration met the requirements to release the one-page form for loan forgiveness under the PPP by 24 days after the date of enactment 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 the updated forms.”

First Draw PPP Terms of loan forgiveness

Student Loan Forgiveness Plan – 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 period after the loan’s disbursement

  • The same goes for the pay and benefits for employees.
  • The loan proceeds are used on payroll and other eligible expenses; and
  • A minimum of 60% of the profits are spent on payroll costs

Second Draw PPP Loan Forgiveness The terms

Second Draw PPP loans to qualified borrowers can be eligible for loan forgiveness if the loan is paid within an 8 24 week period.

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exact same way.
  • The proceeds of the loan can be used to pay for payroll costs or other eligible expenses.
  • At least 60% of profits are used for the cost of payroll
  • When and how do I apply for loan forgiveness?

Once all of the loan’s proceeds have been used, a borrower can apply for forgiveness. Borrowers may apply for forgiveness at any time up to the loan’s maturity date. If borrowers do not apply for forgiveness within 10 months of the expiration date of the loan are able to receive loan payments from their PPP lender.

Download Student Loan Forgiveness Plan

Gallery of Student Loan Forgiveness Plan