OREANDA-NEWS. February 10, 2016. Fitch Ratings has affirmed the Scholar Funding Trust 2013-A senior notes at 'AAAsf'. The Rating Outlook remains Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised entirely of rehabilitated student loans originated under the Federal Family Education Loan Program (FFELP). The credit quality of the trust is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantor and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The Stable Outlook on the notes is consistent with Fitch's affirmation of the U.S. sovereign rating at 'AAA'; Outlook Stable.

Sufficient Credit Enhancement: Credit Enhancement (CE) is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of December 2015, parity is 105.99%. Excess cash can be released as long as the trust maintains an OC level of the greater of 5.65% CE (105.99% parity) and \\$1,500,000.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund sized as the greater of 0.25% of the pool balance and 0.15% of the initial pool balance. The Debt Service Reserve Fund is sized at \\$320,364 as of December 2015.

Acceptable Servicing Capabilities: JP Morgan Chase Bank N.A. is the master servicer and Xerox-ES and Tru Student, Inc. are the sub-servicers of this trust. Fitch believes all servicers to be acceptable servicers of FFELP student loans.

On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has reviewed this transaction under both the existing and proposed criteria, which has resulted in affirmation of the senior note.

RATING SENSITIVITIES

Since the FFELP student loan ABS relies 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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors could result in future downgrades. Likewise, a buildup of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following rating:

Scholar Funding Trust 2013-A:
--Class A note at 'AAAsf'; Outlook Stable.