OREANDA-NEWS. February 29, 2016. Fitch Ratings has taken the following rating actions on Nelnet Student Loan Trust 2008-4:

--Class A-3 affirmed at 'AAAsf'; Outlook Stable;
--Class A-4 'AAAsf' maintained on Rating Watch Negative;
--Class B 'AAsf' maintained on Rating Watch Negative.

KEY RATING DRIVERS

Maturity Risk: Maintenance of the Rating Watch Negative is based on the heightened risk of the Nelnet 2008-4 class A-4 and B notes missing their legal final maturity dates of April 25, 2024 and Jan. 25, 2030, respectively, which would result in an event of default. In an event of such technical default, Fitch would expect ultimate repayment of full principal and interest after the legal final. Fitch expects to resolve the Rating Watch Negative status once its revised FFELP criteria report is published. The magnitude of any potential rating action could vary depending on remaining time to maturity, recent payment trends, issuer actions such as loan purchases, or other external factors.

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 reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The current U.S. sovereign rating is 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread, and for the senior notes, subordination of the class B note. Including the reserve account, Fitch-calculated effective total parity is 101.14% (1.13% CE) and effective senior parity is 110.91% (9.58% CE). Cash is not currently being released, as total parity excluding the reserve account is 100.85%, below the 101% release level.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently equal to the greater of 0.25% of the pool balance and \\$1,326,612.08, sized at the floor as of December 2015.

Acceptable Servicing Capabilities: Nelnet Inc. (97.73%) and Xerox-ES (2.23%) are responsible for day-to-day servicing of the trust. Fitch believes both Nelnet and XES 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.

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.