When Is Student Loan Forgiveness

The U.S. Small Business Administration issued a one-page application form designed to make it easier for applicants to complete the application process for forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the latest stimulus legislation. 

The COVID-19 aid package 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 of the coronavirus epidemic. It also included a requirement that the SBA to issue streamlined forms within 24 hours after the legislation was adopted to make the procedure of applying for forgiveness. The legislation also contained conditions designed to facilitate more loans from community banks, specifically for minority-owned companies that were unable to obtain loans last year.

When Is Student Loan Forgiveness

Ed Zollars, a partner with Thomas, Zollars & Lynch CPAs and stated that the Small Business Administration fulfilled the requirement to issue the one-page form for PPP loan forgiveness within 24 days of the date of the enactment of the Consolidated Appropriations Act, 20,21. The article was posted on the Current Federal Tax Developments blog of Kaplan Financial Education. “The agency also issued the updated forms.”

Terms for forgiveness for the first draw of PPP loans

When Is Student Loan Forgiveness – First Draw PPP loans given to borrowers who are eligible can be granted complete loan forgiveness if they do so during the 8- to 24-week period after loan disbursement:

  • Employee and compensation levels are ensured
  • The loan proceeds can be used to cover the cost of payroll as well as other expenses that are eligible.
  • A minimum of 60% of the funds go to the cost of payroll

Second Draw PPP Terms of Loan Forgiveness

Second Draw PPP loans given to eligible borrowers qualify for full loan forgiveness if during the 8to 24-week time period after the loan’s disbursement

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

When all of the loan proceeds have been used, a borrower can 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 last day of the time period that was covered and the loan is not renewed, PPP loans are no longer deferred and borrowers must make monthly payments to their PPP lender.

Download When Is Student Loan Forgiveness

Gallery of When Is Student Loan Forgiveness

Leave a Comment