OREANDA-NEWS. April 21, 2015. Fitch Ratings affirms the senior student loan notes and the subordinate student loan note issued by Educational Loan Company Trust I 2006-1 at 'Asf' and 'CCCsf' respectively. The Rating Outlook for the senior notes remains Negative. A full list of ratings actions follows at the end of this press release.

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.

Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of February 2015, senior parity is at 108.71%, while total parity remains below par at 97.54%. The trust continues generating negative excess spread.

Liquidity Support: Liquidity support is provided by a reserve fund currently sized at \\$2,046,000 (1% of the bond balance, with a floor of \\$750,000)

Acceptable Servicing Capabilities: Day-to-day servicing is provided by ACS and Great Lakes. Both servicers have demonstrated adequate servicing capabilities.

The RE for the subordinate note was calculated to be approximately 40.00% given Fitch's calculation of expected net recoveries and principal balance of the note as of the latest reporting period.

The Outlook remains Negative due to the deteriorating performance of the trust.

RATING SENSITIVITIES

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, 'AAA'sf 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:

Educational Loan Company Trust I:

--Class A-1 at 'Asf'; Outlook Negative;
--Class A-2 at 'Asf'; Outlook Negative;
--Class A-3 at 'Asf'; Outlook Negative;
--Class B at 'CCCsf'; RE 40%.