Fitch Affirms Academic Loan Funding Trust 2011-1

The following is from Fitch Ratings on June 24:

Fitch Ratings affirms the notes issued by Academic Loan Funding Trust 2011-1 at 'AAAsf'. The Rating Outlook remains Stable.

Key Rating Drivers

High Collateral Quality: The collateral consists of 100 percent rehabilitated Federal Family Education Loan Program loans. The credit quality of the trusts collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education for at least 97 percent of principal and accrued interest. Fitch currently rates the U.S. 'AAA' with Outlook Stable.

Sufficient Credit Enhancement: CE is provided by overcollateralization (the excess of trust's asset balance over bond balance) and excess spread. As of April 2014 reported parity is 106.0 percent. Excess spread is being released as long as the 106 percent total parity cash release level is maintained.

Adequate Liquidity Support: Liquidity support is provided by a Reserve Fund sized at the greater of 0.10 percent of the pool balance and $250,000.

Acceptable Servicing Capabilities: Xerox ES (fka ACS Education Services) is responsible for the day to day servicing of the student loans. Fitch believes Xerox ES to be an acceptable servicer of FFELP student loans.

Rating Sensitivities

Since the FFELP student loan ABS relies on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has affirmed the following ratings:

Academic Loan Funding Trust 2011-1

--Class A at 'AAAsf'; Outlook Stable.

Additional information is available at 'fitchratings.com'.

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