All bonds issued by the foundation under the Educational Assistance Act are legal and authorized investments for banks, savings banks, trust companies, savings and loan associations, insurance companies, fiduciaries, trustees and guardians and for the sinking funds of political subdivisions, departments, institutions and agencies of the state. When accompanied by all unmatured coupons appurtenant to them, the bonds are sufficient security for all deposits of state funds and of all funds of any board in control of public money at the par value of the bonds. The bonds and the income from the bonds are free from taxation within this state except inheritance and gift taxes. The foundation, in its discretion and by such means as it deems appropriate, may waive the exemption from federal income taxation of interest on the bonds. The bonds subject to federal income taxation issued by the foundation shall be payable as to principal and interest with such frequency as may be required by the foundation.