Would Private Student Loans Be Forgiven

Would Private Student Loans Be Forgiven

The U.S. Small Business Administration released a one-page form aimed at simplifying the application process for the forgiveness of Paycheck Protection Program loans, as well as newly revised and updated forms to comply with the latest stimulus legislation. 

The COVID-19 relief package that Congress passed last month revived the PPP with $284 billion in funds for small businesses that want forgiven loans to help deal with the financial fallout from the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 hours of the bill being adopted to make the application process for forgiveness. It also included conditions designed to facilitate more bank loans by community banks, especially for minority-owned companies that were unable to obtain loans in the past.

Would Private Student Loans Be Forgiven

“The Small Business Administration met the requirement to issue the one-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 published updated forms.”

First Draw PPP Terms of loan forgiveness

Would Private Student Loans Be Forgiven – For borrowers who are eligible, First Draw PPP loans can be eligible to forgive loans. This is when the loan payment is made within an 8 to 24-week timeframe.

  • It’s the same for compensation and employees.
  • The proceeds of the loan can be used to pay expenses for payroll or other expenses that are eligible.
  • Minimum 60% of proceeds go to the cost of payroll

Second Draw PPP Loan forgiveness terms

Second Draw PPP loans for eligible borrowers are qualified for loan forgiveness when the loan is repaid within an 8– to 24-week period.

  • The First Draw PPP loan requires that the employee and the compensation levels are maintained in the identical manner.
  • The loan proceeds are spent on payroll and other eligible expenses; and
  • A minimum of 60% of the profits are spent on payroll costs
  • How to apply for loan forgiveness and the time to apply

After all loan proceeds have been used, a borrower can apply to be granted forgiveness. The borrower can apply for forgiveness at any time until the date at which the loan matures. Borrowers who don’t request forgiveness within 10 months of the expiration date of the loan will be able to receive loan payments from their PPP lender.

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