Every few months, the rumor resurfaces. "Congress is going to forgive EIDL loans!" Social media explodes with hope. News articles speculate. Facebook groups fill with desperate optimism.
Then nothing happens. Again.
Let me be blunt: EIDL loan forgiveness is not coming. Not in 2025. Not in 2026. Probably not ever. And the sooner you accept that, the sooner you can make realistic plans for your financial future.
- Total EIDL disbursed: ~$390 billion
- Total PPP forgiven: ~$750 billion
- EIDL forgiveness bills introduced: 0 (that have advanced)
- Congressional appetite for more COVID spending: Zero
- Likelihood of blanket EIDL forgiveness: Essentially 0%
Why PPP Was Forgiven and EIDL Won't Be
People point to PPP forgiveness as proof that EIDL could be forgiven too. They're missing crucial differences in how these programs were designed:
PPP Was Designed for Forgiveness: The Paycheck Protection Program was explicitly created as a forgivable loan. From day one, the legislation said that if you used the money for payroll and kept employees on staff, you wouldn't have to pay it back. Forgiveness wasn't a later decision—it was the entire point.
EIDL Was Always a Loan: The Economic Injury Disaster Loan program existed before COVID. It's a traditional SBA disaster loan with 30-year terms and interest. There was never a forgiveness component. The advance (the $1,000-$10,000 grant) didn't need repayment, but the actual loan always did.
Different Political Calculus: PPP forgiveness was politically easy. Keep your workers = get forgiveness. It was simple to explain and defend. EIDL forgiveness would be blanket debt cancellation with no strings attached. That's a much harder sell.
The Political Reality
Even if you could make a moral case for EIDL forgiveness (and you can), the political reality makes it impossible:
1. The Fraud Problem
$200 billion in EIDL funds went to fraud. How do you forgive loans when a significant portion were fraudulently obtained? Any forgiveness bill would immediately be attacked as "forgiving criminal fraud."
2. The Cost Problem
Forgiving $390 billion in EIDL would be one of the largest single expenditures in federal history. In an era of deficit concerns and debt ceiling fights, there's no appetite for this spending.
3. The Fairness Problem
What about people who didn't take EIDL? What about people who already paid theirs off? What about businesses that got PPP forgiveness AND an EIDL? Any forgiveness program creates perceived unfairness that politicians don't want to defend.
4. No Champions
Look at Congress. Who is loudly advocating for EIDL forgiveness? Nobody. There's no major bill. No prominent politician has made it their cause. Without champions, legislation goes nowhere.
The Brutal Truth
Congress has moved on from COVID relief. The pandemic is over. The political will for more spending doesn't exist. EIDL borrowers are not a powerful enough constituency to change this. Waiting for forgiveness is waiting for something that isn't coming.
The Bills That Went Nowhere
A few EIDL-related bills have been introduced over the years. None have advanced:
Small Business EIDL Forgiveness Act: Proposed forgiving loans under $50,000. Never got a hearing.
COVID-19 EIDL Fraud Prevention Act: Focused on fraud recovery, not borrower relief.
Various Amendments: Scattered attempts to add EIDL provisions to larger bills. All stripped out.
The legislative graveyard is full of EIDL relief proposals. Not one has become law or shown serious momentum.
What About Partial Relief?
Some argue for partial relief measures that are more politically feasible:
Interest Rate Reduction: The 3.75% EIDL rate seemed low in 2020 but seems less generous now. Could Congress lower it further? Theoretically yes, but there's no serious push for it.
Extended Deferment: The SBA has offered various deferment periods. These just delay the problem—you still owe the money.
Small Loan Forgiveness: Forgiving only the smallest loans (under $10,000) would cost less and could be framed as helping the truly small businesses. Still no real momentum.
Means-Tested Relief: Forgiveness only for businesses that failed or borrowers who can prove hardship. Administratively complex and still politically difficult.
Even these half-measures aren't getting traction. The political calculation just doesn't work.
What You Should Do Instead of Waiting
If you're sitting on an EIDL hoping forgiveness will bail you out, you need to make a different plan:
Option 1: Pay It
EIDL loans have 30-year terms. Monthly payments on even large loans are manageable. If your business survived, budget for repayment.
Option 2: Negotiate
The SBA does occasionally settle for less than the full amount. It requires demonstrated hardship and persistence, but Offers in Compromise exist.
Option 3: Bankruptcy
Unlike student loans, EIDL debt is generally dischargeable in bankruptcy. If you're truly underwater, this may be the cleanest option.
Option 4: Structured Default
If you can't pay and won't file bankruptcy, understand the consequences. Treasury offset, credit damage, collections. Plan for these if you're going to default.
Option 5: Get Professional Help
A CPA or bankruptcy attorney can help you evaluate your specific situation. The cost of professional advice is usually worth it.
Every month you wait for forgiveness that isn't coming is a month you're not making a realistic plan. Interest accrues. Collection efforts intensify. Your options narrow. Stop waiting. Start planning.
Why the Myth Persists
EIDL forgiveness rumors keep circulating because:
Hope is powerful. When you're drowning in debt, any lifeline looks attractive. Forgiveness would be the best possible outcome. People want to believe it's possible.
Social media amplifies. One person posts a rumor. Others share it. By the time it's been shared 1,000 times, it looks like news. It's not.
Scammers exploit hope. There are actual scams selling "EIDL forgiveness assistance." They'll take your money and file paperwork that accomplishes nothing.
Legitimate advocates create noise. Some groups genuinely advocate for EIDL relief. Their advocacy is real, but their success probability is near zero. Activity isn't the same as progress.
A More Realistic Hope
If you're looking for something to hope for that might actually happen:
Administrative Relief: The SBA could make hardship accommodations easier to access. They could reduce interest rates administratively. They could be less aggressive with collections. These don't require Congress.
Enforcement Priorities: The SBA could choose to focus collection efforts on fraudsters rather than struggling legitimate borrowers. This is a policy choice they could make.
Program Reforms: Future disasters might get better-designed relief programs because of EIDL failures. That doesn't help you now, but it's meaningful.
None of this is the clean "your debt is erased" outcome. But these are things that could actually happen.
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