Fitch Assigns Ratings to Brazos Higher Education Authority Student Loan Bonds, Series 2007.

NEW YORK -- Fitch assigns ratings to the following Student Loan Revenue Bonds Series 2007 issued by Brazos Higher Education Authority, Inc. (Brazos):

Ratings for new issuance:

-- $71,600,000 Student Loan Revenue Bonds, Senior Series 2007A-1,'AAA';

-- $40,400,000 Student Loan Revenue Bonds, Taxable Senior Series 2007A-2, 'AAA';

-- $32,000,000 Student Loan Revenue Bonds, Taxable Senior Series 2007A-3, 'AAA';

-- $16,000,000 Student Loan Revenue Bonds, Taxable Senior Series 2007A-4, 'AAA'.

Ratings on previously issued bonds:

--$35,000,000 Student Loan Revenue Bonds, Senior Series 2003A-1, 'AAA';

--$4,900,000 Student Loan Revenue Bonds, Senior Series 2003A-2, 'AAA';

--$35,000,000 Student Loan Revenue and Refunding Bonds, Senior Series 2002A-1, 'AAA';

--$52,100,000 Student Loan Revenue Bonds, Taxable Senior Series 2002A-2, 'AAA';

--$15,000,000 Student Loan Revenue Bonds, Taxable Senior Series 2002A-3, 'AAA';

--$1,700,000 Student Loan Revenue Refunding Bonds, Senior Series 2001A-1, 'AAA';

--$35,000,000 Student Loan Revenue Bonds, Subordinate Series 2001B-1, 'A'.

Fitch assigns ratings to the new Series 2007 issuance and confirms ratings on the previously issued bonds as listed above. The ratings are based on the quality of the student loan portfolio, the credit enhancement provided, and the sound legal structure. The collateral in the trust consists of 100% Federal Family Education Loan Program (FFELP) student loans. The trust benefits from a reserve fund sized at the greater of 2.00% of the aggregate principal amount of the bonds outstanding or $5,174,000. The ratings address the ability of the trust to redeem bonds at maturity and pay timely interest. The ratings do not address the ability of the trust to pay carry-over interest, nor do they address the ability of the auction rate bondholders to successfully redeem their bonds at an auction now or in the future.

The Series 2007 Bonds are issued pursuant to an amended and restated Indenture of Trust between Brazos Higher Education Authority, Inc. and U.S. Bank National Association, as indenture trustee and eligible lender trustee, dated as of February 1, 2007. The proceeds of the Series 2007 Bonds are being used to acquire FFELP student loans, make a deposit to the reserve fund, and pay issuance costs.

The senior Series 2007A-1 Bonds are tax-exempt, 35-day auction rate securities. Interest is payable semiannual on each June 1 and December 1, commencing June 1, 2007. The legal final maturity for the bonds is June 1, 2043.

The senior Series 2007A-2 through senior Series 2007A-4 Bonds are taxable, 28-day auction rate securities. Interest is payable on the first business day following the end of each auction period. The legal final maturity for the bonds June 1, 2043.

As noted, the collateral securing the bonds consists entirely of FFELP student loans. The FFELP loans are guaranteed at least 97% by an eligible guarantor and re-insured by the U.S. Department of Education (ED) depending on their disbursement date.

The issuer is Brazos Higher Education Authority, Inc., a nonprofit, 501(c)(3) corporation organized in 1975 under the Texas Non-Profit Corporation Act which also operates pursuant to Chapter 53, Texas Education Code on behalf of the City of Waco, Texas. Brazos issues tax-exempt debt under its 150(d) tax designation by the Internal Revenue Code as a qualified scholarship funding corporation. Brazos is also affiliated with Brazos Higher Education Service Corporation, Inc. and Brazos Student Finance Corp.

Brazos Higher Education Service Corporation, Inc. is the servicer with ACS Education Services, CFS-SunTech, Great Lakes Educational Loan Services, Pennsylvania Higher Education Assistance Agency and Sallie Mae Servicing, acting as subservicers for the student loans.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.