Fitch Affirms State of North Carolina State Education Assistance Authority Series 2012-1

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has affirmed the North Carolina State Education Assistance Authority series 2012-1 notes at 'AAAsf' with a Stable Rating Outlook

KEY RATING DRIVERS

High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of March 2015, reported parity is 105.69% (5.38% CE). Cash cannot be released from the trust until all of the notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a debt service reserve fund currently sized at the greater of 0.25% of the pool balance and $623,544.

Acceptable Servicing Capabilities: College Foundation, Inc. as servicer and Nelnet Servicing, LLC as backup servicer are responsible for servicing the trust. Fitch views both College Foundation and Nelnet as acceptable servicers 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 CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Initial Key Rating Drivers and Rating Sensitivity further described in the Presale report published on May 20, 2011.

Fitch has taken the following rating action:

State of North Carolina State Education Assistance Authority Series 2012-1:

--Class A note affirmed at AAAsf; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Additional Disclosures

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Fitch Ratings

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Harry Kohl, +1-212-908-0837

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

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Michael Dean, +1-212-908-0556

Managing Director

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Source: Fitch Ratings