Us Student Loan Forgiveness Act

Us Student Loan Forgiveness Act

The U.S. Small Business Administration has released a single-page form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, together with updated and revised forms to conform to the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March that provided $284 billion of funding to small businesses in need of loans. The funds were used to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue simplified forms within 24 days of the bill being adopted to make the procedure of applying for forgiveness. The legislation also contained conditions that aim to increase the number of bank loans by community banks, particularly for minority-owned businesses that struggled to get loans in the past.

Us Student Loan Forgiveness Act

“The Small Business Administration met the requirement to issue the single-page form for PPP loan forgiveness 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 updated forms.”

First Draw PPP Conditions for loan forgiveness

Us Student Loan Forgiveness Act – For those who qualify, First Draw PPP loans can be eligible for loan forgiveness. This is if the loan disbursement occurs within an 8 to 24-week timeframe.

  • The levels of compensation and employee pay are ensured
  • The loan funds are used on payroll and other eligible expenses; and
  • At least 60% of the profits are used for the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans granted to borrowers who are eligible can be granted full loan forgiveness if during the 8– to 24-week time period after the loan’s disbursement

  • The First Draw PPP loan requires that the compensation and employee levels be maintained in an exactly the same manner.
  • The loan proceeds could be used to cover the cost of payroll as well as other expenses that are eligible.
  • A minimum of 60% of proceeds are spent on payroll costs
  • How to request loan forgiveness and when to apply

The borrower is eligible for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been used. The borrower can request forgiveness any time up until the date of maturity of the loan. If borrowers do not apply for forgiveness within 10 month of the expiration date of the loan are able to receive payment from their PPP lender.

Download Us Student Loan Forgiveness Act

Gallery of Us Student Loan Forgiveness Act


Leave a Reply

Your email address will not be published.