SECTION 1. PURPOSE

This notice provides guidance regarding qualified student loan bonds under § 144(b) of the Internal Revenue Code (Code) to clarify certain requirements for tax-exempt bond financing for loan programs of general application approved by a State under § 144(b)(1)(B) (State Supplemental Loan programs). (Except as otherwise expressly provided, section references in this notice are to the Code.) This notice addresses: (1) eligibility of borrowers of loans through State Supplemental Loan programs; (2) the application of the requirement under § 144(b)(3) that the student have a nexus to the State (student nexus requirement) for loans made to refinance student loans (refinancing loans); (3) the loan size limitation for State Supplemental Loans; and (4) the types of student loans that may be refinanced with a State Supplemental Loan.