### Question
What does qualified student loan bond mean?


### Answer
**Qualified student loan bond** has the following meaning in *26 U.S.C. § 144*:

> any bond issued as part of an issue the applicable percentage or more of the net proceeds of which are to be used directly or indirectly to make or finance student loans under—


(A) a program of general application to which the Higher Education Act of 1965 applies if—


(i) limitations are imposed under the program on—


(I) the maximum amount of loans outstanding to any student, and


(II) the maximum rate of interest payable on any loan,


  

(ii) the loans are directly or indirectly guaranteed by the Federal Government,


(iii) the financing of loans under the program is not limited by Federal law to the proceeds of tax-exempt bonds, and


(iv) special allowance payments under section 438 of the Higher Education Act of 1965—


(I) are authorized to be paid with respect to loans made under the program, or


(II) would be authorized to be made with respect to loans under the program if such loans were not financed with the proceeds of tax-exempt bonds, or


  

(B) a program of general application approved by the State if no loan under such program exceeds the difference between the total cost of attendance and other forms of student assistance (not including loans pursuant to section 428B(a)(1) of the Higher Education Act of 1965 (relating to parent loans) or subpart I [1](#144_1_target) of part C of title VII of the Public Health Service Act (relating to student assistance)) for which the student borrower may be eligible

#### Citation:
  - *26 U.S.C. § 144*
  - Heading: **Subtitle A-Income Taxes > CHAPTER 1-NORMAL TAXES AND SURTAXES > Subchapter B-Computation of Taxable Income > PART IV-TAX EXEMPTION REQUIRE- > Subpart A-Private Activity Bonds**

