The amount of any loan to a qualified student shall be determined according to regulations promulgated by the state board of educational finance [commission on higher education [higher education department]]. No payment shall be made to any qualified student until he has executed a note, guaranteed by the United States and payable to the student loan sinking fund, for the full amount of the loan and applicable interest. For the purpose of the Student Loan Act, a qualified student has the capacity to contract and is bound by any contract executed by him; the defense that he was a minor at the time he executed a note is not available to him in any action arising on his note. Payments to qualified students executing notes may be made annually, semiannually, quarterly, monthly or for each semester as determined by the participating institution, depending upon the demonstrated capacity of the student to manage his financial affairs. The rate of interest charged the student shall be the maximum authorized by federal regulations. Disbursements may be made to a participating institution pursuant to a contract between the fiscal agent and the participating institution executed under the Student Loan Act.