OREANDA-NEWS. Fitch Ratings has affirmed the senior student loan notes at 'AAAsf' and the subordinate student loan notes at 'Asf' issued by Vermont Student Assistance Corp Series 2013-1. The Rating Outlook on the notes, which is tied to the sovereign rating of the U.S. government, is Stable.

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 at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED). Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of the February 2015 collection period, reported senior and total parity was 104.30% and 101.70%, respectively. Additionally, the trust is in turbo and no cash will be released until all notes have been paid in full.

Adequate Liquidity Support: Liquidity support is provided by reserve account sized at 0.25% of outstanding notes with a floor of \$560,543.

Acceptable Servicing Capabilities: VSAC will be the servicer and administrator, and Nelnet Servicing LLC (Nelnet) will be the backup servicer for the transaction. Fitch has reviewed the servicing operations of VSAC and Nelnet and believes them to be acceptable servicers of FFELP student loans.

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 taken the following rating actions:

Vermont Student Assistance Corp Series 2013-1:

--Class A affirmed at 'AAAsf'; Outlook Stable;
--Class B affirmed at 'Asf'; Outlook Stable.