(a) Subject to the limitations contained in this section, the board may from time to time by resolution and with the approval of the Governor, authorize issuance of negotiable bonds, notes and other evidences of indebtedness, including certificates of participation, in such amounts, bearing such interest rates and terms and maturing in such amounts and at such times as the board of directors may prescribe by resolution.

(a.1) The proceeds realized from the sale of notes, bonds or similar indebtedness shall be used for the purpose of purchasing, making or guaranteeing loans to students or parents, or to lending institutions or postsecondary institutions for the purpose of student loans and the cost of issuance of the indebtedness, the establishment of reserve funds from the proceeds of the indebtedness, administration of the loans purchased, made or guaranteed and other costs associated with loans purchased, made or guaranteed with funds from the proceeds of the indebtedness. The aggregate principal amount of bonds, notes and similar evidences of indebtedness of the agency shall not exceed twenty per cent of the total of loans purchased, made or guaranteed by the agency.

(b) Except as otherwise required by the agency, the bonds, notes and other evidences of indebtedness of the agency shall be limited obligations of the agency payable out of the proceeds of loans made under this act, reserve funds created therefor by the agency, any insurance contracts pertaining thereto and other lawfully available money, subject only to any agreements with the holders of the bonds, notes or other evidences of indebtedness of the agency, pledging any particular receipts or revenues. Bonds, notes or other evidences of indebtedness issued under the provisions of this act shall not be deemed to constitute a debt of the Commonwealth or a pledge of the faith and credit of the Commonwealth. All such bonds, notes and other evidences of indebtedness shall contain on the face thereof a statement to the foregoing effect and to the effect that the agency shall be obligated to pay the same or the interest thereon only from such moneys or revenues, proceeds, reserve funds, insurance contracts and such other moneys of the agency and that neither the faith and credit nor the taxing power of the Commonwealth is pledged to the payment of the principal of or the interest on such bonds, notes or other evidences of indebtedness.

(c) The bonds, notes and other evidences of indebtedness of the agency shall be signed by the chairman who may use a facsimile signature for this purpose. The bonds may be issued as serial bonds payable in annual installments or as term bonds or as a combination thereof. The obligations of the agency shall bear interest at such rate or rates, be in such denominations, have such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places within or without the Commonwealth, be subject to such terms of redemption and maturity and contain such other terms as the board of directors may determine. The notes and bonds of the agency may be sold by the agency at public or private sale at such price or prices as the board of directors determines. If the chairman of the board of directors whose signature appears on any notes or bonds or coupons ceases to act in that capacity before the delivery of such notes or bonds, his signature shall be valid and sufficient for all purposes as if he had remained in office until such delivery.

(d) The agency may issue refunding obligations to refund any obligations then outstanding which have been issued under the provisions of this act, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of such obligations and for any statutory purpose of the agency.

(e) No director of the agency nor any person executing bonds, notes or other evidences of indebtedness of the agency shall be subject to personal liability or accountability solely by reason of his execution of such obligations or the issuance thereof.

(f) To secure payment of such bonds, notes or other evidences of indebtedness, the agency may establish in the Educational Loan Assistance Fund one or more reserve funds and prescribe by resolution the sources of deposits therein, the investment of amounts therein and the limitations on withdrawals from such funds. Without limiting the generality of the foregoing, the agency may create one or more debt service reserve funds wherein specified deposits may be made and may require that such deposits shall be used solely for the payment of principal of, redemption premiums, if any, and interest on the agency's bonds, notes or other obligations. The agency may require that withdrawals of amounts in any such debt service reserve fund not be made at any time in such amount as to reduce the amount in such reserve fund to less than the amount which the agency shall determine by resolution to be reasonably necessary for the purposes of such reserve fund (referred to herein as the debt service fund requirement) except for the purpose of paying principal of, redemption premium, if any, and interest on the bonds, notes or any obligations secured by such reserve fund for the payment of which other specified moneys of the agency are not available and except that any income or interest earned by, or any increment to, any such reserve fund by reason of investment of amounts therein may be transferred to any other fund or account of the agency to the extent such transfer does not reduce the amount in such debt service reserve fund below the amount of its debt service reserve fund requirement.