SECTION 1. PURPOSE

This notice provides guidance regarding qualified student loan bonds under § 144(b) of the Internal Revenue Code (Code) ¹ 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). Specifically, this notice addresses eligibility of borrowers of loans through State Supplemental Loan programs and the loan size limitation for State Supplemental Loans. This notice also provides guidance regarding whether an issue of State or local bonds the proceeds of which are used to finance or refinance qualified student loans (as defined in § 1.150-1(b)) or to finance qualified mortgage loans (as defined in § 1.150-1(b)) is a refunding issue.