OREANDA-NEWS. Fitch Ratings has affirmed the Nelnet Student Loan Trust 2004-4 senior note at 'AAAsf' and subordinate note at 'AAsf'. The Rating Outlook remains Stable for both classes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists 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. The current U.S. sovereign rating is 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: While both the senior and subordinate notes will benefit from overcollateralization (OC) and excess spread, the senior notes also benefit from subordination provided by the class B note. Fitch gives credit to the reserve fund, which is excluded from the adjusted pool balance once the pool factor is at 40%. The current pool factor is at 18.55%. As of December 2014, total parity (including reserve) is 101.40% (1.38% CE) and senior parity (including reserve) is 111.13% (10.01% CE). The trust is currently releasing cash as long as the \$5,144,248 OC is maintained.

Adequate Liquidity Support: Liquidity support is provided by a reserve account. The reserve is sized equal to the greater of 0.25% of the pool balance, and \$ 2,991,407.

Acceptable Servicing Capabilities: National Education Loan Network is the master servicer and Nelnet Inc. is the subservicer. Fitch believes both National Education Loan Network and Nelnet Inc. to be acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS rely 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.