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|Qualified Scholarship Funding Corporation Rules|
Update "Qualified Scholarship Funding Corporation" Rules
In recent decades, tuition costs have outpaced increases in federal statutory loan limits and the need for alternative borrowing has grown. Nonprofit and state student loan funding providers are uniquely situated to make alternative loans at the best possible terms, particularly with their access to tax-exempt financing. However, certain nonprofit and state student loan funding providers – “qualified scholarship funding corporations” under Section 150(d) of the Internal Revenue Code – are currently ineligible to issue tax-exempt bonds to finance alternative student loans. Section 150(d) only allows qualified scholarship funding corporations to use tax-exempt financing to acquire education loans incurred under the Higher Education Act, which was the Federal Family Education Loan Program (FFELP).