OREANDA-NEWS. Fitch Ratings affirms the senior student loan bonds at 'AAAsf' issued by Scholar Funding Trust 2012-A. The Rating Outlook on the notes remains Stable.

KEY RATING DRIVERS

High Collateral Quality: The collateral consists of 100% rehab 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: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of the January 2016 distribution date, total parity remained steady at 105.99%, which is the release level.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at $333,637 (0.25% of the bond balance, with a floor of 0.15%). Additionally, there is a capitalized interest account currently sized at $1.3 million, scheduled to release on July 28, 2017.

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.

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 build-up 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 2012-A
--Class A affirmed at 'AAAsf'; Outlook Stable.