This bill changes tax rules to make it easier and cheaper for states to raise money for student loans. It says “qualified student loan bonds” won’t count against a state’s usual limit on private-activity bonds, and the interest on these bonds won’t trigger the alternative minimum tax. In plain terms, states and their student loan agencies could issue more of these bonds, likely at lower cost, which can help keep student loan interest rates lower for borrowers. It also clarifies that, for certain pooled bond rules, individual students aren’t treated as the “ultimate borrower,” which can simplify how these bonds are structured and used .

Key points:

• Who is affected: State student loan agencies, investors in these bonds, and students who use state-backed loans.
• What changes: Student loan bonds are exempt from state volume caps and from the alternative minimum tax; pooled bond rules are adjusted so students aren’t counted as the end borrower.
• When: These changes apply to bonds issued after the law is enacted.