OREANDA-NEWS. Fitch Ratings affirms the Nelnet Student Loan Trust 2008-4 senior notes at 'AAAsf' and upgrades the subordinate notes to 'AAsf' from 'A+sf'. The Rating Outlook remains Stable on the senior notes, and the Outlook on the subordinate notes is revised to Stable from Positive . The upgrade of the subordinate notes is driven by strong static pool performance and amortization of the bonds.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust 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 (ED) for at least 97% of principal and accrued interest. Fitch rates the U.S. sovereign government at '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, and for the senior notes, subordination of the class B note. As of December 2014, total parity is 101% (0.99% CE) and senior parity is 109.03% (8.28% CE). The trust has been releasing cash as the cash release level of 101% parity has been maintained.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently equal to the greater of 0.25% of the pool balance and \$1,326,612.08, currently at \$1,384,630.74 as of December 2014.

Acceptable Servicing Capabilities: Nelnet Inc. (97.56%) and ACS (2.44%) are responsible for day-to-day servicing of the trust. Fitch believes both Nelnet and ACS to be 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 credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has taken the following rating actions:

Nelnet Student Loan Trust 2008-4:
--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 affirmed at 'AAAsf'; Outlook Stable;
--Class B upgraded to 'AAsf' from 'A+sf'; Outlook to Stable from Positive.