Will Student Loan Forgiveness Happen

Will Student Loan Forgiveness Happen

The U.S. Small Business Administration has released a form of one page which makes it simpler to request the cancellation of Paycheck Protection Program loans. It also includes newly revised forms that comply with the current stimulus law. 

The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funding for small businesses seeking forgivable loans to help them deal with the financial fallout from the coronavirus outbreak. The legislation required that the SBA issue simplified forms within 24 hours of the legislation’s signing into law. This is to make it easier to apply for forgiveness. It also included conditions that encourage community banks to lend more, especially to minority-owned businesses who were unable to obtain loans in the past.

Will Student Loan Forgiveness Happen

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

Forgiveness terms for the initial draw of PPP loans

Will Student Loan Forgiveness Happen – First Draw PPP loans granted to borrowers who meet the criteria are eligible for full loan forgiveness if within the 8 to 24-week covered period following the loan’s disbursement

  • The levels of compensation and employee pay are ensured
  • The proceeds from the loan may be used to pay expenses for payroll or other expenses that are eligible.
  • At least 60% of the proceeds are spent on payroll costs

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans made to borrowers who are eligible can be granted 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 compensation and employee levels be maintained in the identical manner.
  • The loan proceeds could be used to pay payroll costs or other expenses that are eligible.
  • A minimum of 60% of the proceeds go to payroll costs
  • How do I apply for loan forgiveness , and when

Once all of the loan’s proceeds have been used, a borrower can apply to be forgiven. Borrowers may apply for forgiveness at any time until the date of maturity. Borrowers who do not request forgiveness within 10 month of the end date of the loan are able to receive the loan payment from their PPP lender.

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