OREANDA-NEWS. June 05, 2015. Fitch Ratings has affirmed at 'AAAsf' the senior notes issued by Nelnet Student Loan Trust Series 2005-1. In addition, Fitch has affirmed the subordinate note at 'Asf'. The Rating Outlook remains Stable for all notes.

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. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: Credit Enhancement is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. In addition, 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 reported parity calculation once the pool factor is below 40%. The current pool factor is at 33.92%. After factoring in the reserve account, Fitch's calculated total parity is 100.77% (0.77% CE) and Fitch's calculated senior parity is 107.14% (6.67% CE). The trust is currently releasing cash as long as the \\$ 3.27 million 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 \\$ 1,869,282.

Acceptable Servicing Capabilities: National Education Loan Network is the master servicer. Nelnet Inc. and ACS Education Services, Inc. are subservicers. Fitch believes the above mentioned entities 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.

DUE DILIGENCE USAGE
Fitch was not provided due diligence information from any third parties relating to the Nelnet Student Loan Trust series 2005-1 Trust.

Fitch has affirmed the following ratings:

Nelnet Student Loan Trust Series 2005-1:
--Class A-4 at 'AAAsf'; Outlook Stable;
--Class A-5 at 'AAAsf'; Outlook Stable;
--Class B at 'Asf'; Outlook Stable.