Trumps Student Loan Forgiveness

Trumps Student Loan Forgiveness

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. It also includes newly revised forms to comply with the current stimulus law. 

The COVID-19 relief package that Congress approved last month renewed the PPP with $284 billion of funds for small businesses that want forgivable loans to help them to deal with the effects of economic collapse from the coronavirus pandemic. The law requires that the SBA provide simplified forms within 24 hours of the legislation’s signing into law. This is to facilitate the application for forgiveness. Additionally, it included conditions to encourage community banks to lend more specifically to minority-owned companies who were unable to obtain loans last year.

Trumps Student Loan Forgiveness

“The Small Business Administration met the requirements to release the one-page form for the forgiveness of PPP loans within 24 hours of the date of enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also released new forms that were updated.”

Forgiveness terms in the first draw of PPP loans

Trumps Student Loan Forgiveness – First Draw PPP loans made to borrowers who meet the criteria are eligible for complete loan forgiveness if they do so within the 8 to 24-week covered period following the loan’s disbursement

  • This is also true for pay and benefits for employees.
  • The loan proceeds are spent on payroll and other eligible expenses; and
  • At least 60% of proceeds go to expenses for payroll

Second Draw PPP Loan Forgiveness Conditions

Second Draw PPP loans granted to eligible borrowers qualify for total loan forgiveness if they do so during the 8– to 24-week duration following the loan’s disbursement

  • The First Draw PPP loan requires that the employee and the compensation levels be maintained in an exact same way.
  • The loan funds can be used to cover expenses for payroll or other expenses that are eligible.
  • A minimum of 60% of proceeds are used to pay for payroll expenses
  • How do I apply for loan forgiveness and when to apply

When all of the loan proceeds have been used The borrower may apply to be granted forgiveness. Borrowers are able to apply for forgiveness any time up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 years of the date of expiration of the period covered and the loan is not renewed, PPP loan payments are not deferred any longer, and borrowers will begin making payment to their PPP lender.

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