Student Loan Bond Expansion Act of 2026
Sponsored By: Senator Grassley, Chuck [R-IA]
Introduced
Summary
Exempts qualified student loan bonds from the private activity bond volume cap and alternative minimum tax (AMT) rules. It would also change pooled financing rules so individual student borrowers are not counted as 'ultimate borrowers' for these bonds.
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- Issuers and student loan programs: Would let state, local, and nonprofit loan programs issue more tax‑exempt student loan bonds by removing the private activity bond volume cap, increasing their capacity to raise financing. It applies to obligations issued after enactment.
- Tax treatment and pooled financing: Would carve qualified student loan bonds out of the AMT private activity bond rules and add a special pooled financing rule that excludes student borrowers from the 'ultimate borrower' test. The AMT exception does not extend to refunding bonds unless the refunded bond already qualified.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
More bond financing for student loans
If enacted, this bill would let more qualified student loan bonds be issued without counting against state private activity bond caps. It would also exclude those bonds from being treated as private activity bonds for AMT rules for bonds issued after enactment. The AMT exception would not apply to a refunding bond unless it applied to the refunded bond or, for a series of refundings, to the original bond. For pooled financing deals, student borrowers would not count as the "ultimate borrower." These changes would apply only to bonds that meet the Code's "qualified student loan bond" definition in section 144(b) and to obligations issued after enactment.
Sponsors & CoSponsors
Sponsor
Grassley, Chuck [R-IA]
IA • R
Cosponsors
Peter Welch
VT • D
Sponsored 2/3/2026
Sen. Cassidy, Bill [R-LA]
LA • R
Sponsored 2/3/2026
Sen. Reed, Jack [D-RI]
RI • D
Sponsored 2/10/2026
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov