OREANDA-NEWS. Fitch Ratings assigns the following ratings to PHEAA Student Loan Trust (PHEAA SLT) 2015-1 student loan asset-backed notes:

--\$621,500,000 class A notes 'AAAsf'; Outlook Stable;
--\$15,400,000 class B notes 'Asf'; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans including 19.37% rehabilitated (rehab) loans. In Fitch's opinion, the credit quality of the trust collateral is high, based on the guarantees provided by the transaction's eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). The U.S. is currently rated 'AAA', Outlook Stable.

Sufficient Credit Enhancement: Cash flow scenarios for class A and B notes were satisfactory under Fitch's respective stresses. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread, and for the class A notes, 2.41% subordination is provided by the class B notes. At closing, total and senior parity are expected to be 101.01% (0.99% CE) and 103.50% (3.38% CE), respectively. A target OC amount equal to the greater of 1.50% of the adjusted pool balance and 1% of the initial pool balance (\$6.36 million) must be met before excess spread can be released from the trust.

Adequate Liquidity Support: Liquidity support is provided by an approximate \$1.59 million reserve account funded at closing with note proceeds. The specified reserve fund balance is equal to the greater of 0.25% of the outstanding pool balance and 0.15% of the initial pool balance.

Acceptable Servicing Capabilities: PHEAA will service the PHEAA SLT 2015-1 transaction. In Fitch's opinion, PHEAA is an acceptable servicer 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.