Teacher Loan Forgiveness Form Fedloan

The U.S. Small Business Administration has released a 1-page form which makes it simpler to request the cancellation of Paycheck Protection Program loans. The form is also updated with new forms that comply with the most recent stimulus law. 

The COVID-19 relief plan that Congress approved last month renewed the PPP with $284 billion in funding for small businesses seeking forgiveness loans to help them deal with the financial fallout of the coronavirus epidemic. The package also mandated the SBA to issue streamlined forms within 24 hours of the bill being signed into law to simplify the application process for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, particularly for minority-owned companies that had trouble getting loans in the past.

Teacher Loan Forgiveness Form Fedloan

“The Small Business Administration met the requirement to issue the one-page form for the forgiveness of PPP loans within 24 days of the date of 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.”

Forgiveness terms in the first draw of PPP loans

Teacher Loan Forgiveness Form Fedloan – First Draw PPP loans made to eligible borrowers qualify for total loan forgiveness during the 8- to 24 week period that follows loan disbursement:

  • Employee and compensation levels are kept at a constant level.
  • The proceeds of the loan can be used to pay payroll costs or other eligible expenses.
  • At least 60% of profits go towards expenses for payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans granted to borrowers who meet the criteria are eligible for total loan forgiveness if they do so during the 8to 24-week time period after loan payment:

  • Pay and worker levels are maintained in the same manner as is required for the First Draw PPP loan
  • The loan proceeds could be used to cover expenses for payroll or other expenses that are eligible.
  • Minimum 60% of funds go to payroll costs
  • How and when to apply for loan forgiveness

Once all of the loan proceeds have been used the borrower is eligible for forgiveness. Borrowers can request forgiveness at any time until the loan’s maturity date. Borrowers who don’t request forgiveness within 10 month after the date they will be able to repay the loan are able to receive loan payments from their PPP lender.

Download Teacher Loan Forgiveness Form Fedloan

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