SECTION 4. APPLICATION

.01 Eligible borrower . An eligible borrower of a refinancing loan under a State Supplemental Loan program includes the student or parent borrower of the original loan. An eligible borrower of a refinancing loan under a State Supplemental Loan program also includes a parent of the student borrower of an original loan (or a refinancing loan) and a child of a parent who borrowed an original loan (or a refinancing loan) on the child’s behalf.

.02 Loan size limitation . (1) For purposes of establishing that the original loan to be refinanced met the loan size limitation under § 144(b)(1)(B), the original loan will be treated as having met the loan size limitation under § 144(b) (1)(B) if–

(a) The original loan was made under a student loan program that applied the same loan size limitation as in § 144(b) (1)(B) or a stricter one during the period when the original loan was made; for example, the FFELP and other loan programs under Title IV of the Higher Education Act and State Supplemental Loan programs (as described in § 144(b) (1)(B)), whether or not financed with tax-exempt bonds; or

(b) The previous lender, other holder, or loan servicer of the original loan certifies that the original loan amount did not

exceed the difference between the total cost of attendance and other forms of student assistance as reported on the original loan application.

(2) In addition, to establish that the original loan to be refinanced met the loan size limitation under § 144(b)(1)(B), an issuer may rely on—

(a) The amount of the original loan as stated on the promissory note for the original loan or as otherwise provided by the previous lender, other holder, or loan servicer of the original loan; and

(b) The amounts of the student’s total cost of attendance and other forms of student assistance for the academic period for which the original loan was made—

(i) As reported on the original loan application and provided by either (A) the previous lender, other holder, or loan servicer of the original loan; or (B) the educational institution the student attended for the academic period of the original loan, or

(ii) As stated in the student’s financial aid award letter that is from the educational institution the student attended for the academic period and includes the amount of the original loan.

.03 Refunding bonds . An issue is not a refunding issue to the extent that the actual issuer reasonably expects as of the issue date of the issue to use net proceeds of the issue within two years of the issue date to refinance one or more obligations that are qualified student loans. For purposes of determining whether an issue is a refunding issue, proceeds means any sales proceeds, investments proceeds, or transferred proceeds (all as defined in § 1.148-1(b)), except that proceeds does not include investment proceeds (or transferred proceeds allocable to investment proceeds) received from investing in a qualified student loan or a qualified mortgage loan.