Fitch Confirms Vermont Student Assistance Corporation's Education Loan Revs.

NEW YORK -- Fitch Ratings has confirmed the following ratings on the Vermont Student Assistance Corporation's (VSAC) education loan revenue bonds listed below:

--$58,450,000 senior series 2006TT 'AAA';

--$58,400,000 senior series 2006UU 'AAA';

--$58,400,000 senior series 2006VV 'AAA';

--$120,385,000 senior series 2005QQ 'AAA';

--$59,800,000 senior series 2005RR 'AAA';

--$59,800,000 senior series 2005SS 'AAA';

--$74,700,000 senior series 2004MM 'AAA';

--$79,500,000 senior series 2004NN 'AAA';

--$65,800,000 senior series 2004OO'AAA';

--$55,000,000 senior series 2004PP 'AAA';

--$25,900,000 senior series 2003FF 'AAA';

--$40,000,000 senior series 2003GG 'AAA';

--$50,000,000 senior series 2003HH 'AAA';

--$52,500,000 senior series 2003II 'AAA';

--$52,500,000 senior series 2003JJ 'AAA';

--$45,000,000 senior series 2003KK 'AAA';

--$50,000,000 senior series 2003LL 'AAA';

--$39,350,000 senior series 2002BB 'AAA';

--$39,400,000 senior series 2002CC 'AAA';

--$33,750,000 senior series 2002DD 'AAA';

--$30,000,000 senior series 2001V 'AAA';

--$29,750,000 senior series 2001W 'AAA';

--$27,500,000 taxable senior series 2001X 'AAA';

--$27,500,000 taxable Senior Series 2001Y 'AAA';

--$25,000,000 senior series 2001Z 'AAA';

--$25,000,000 senior series 2001AA 'AAA';

--$40,850,000 senior series 2000R 'AAA';

--$40,850,000 senior series 2000S 'AAA';

--$40,850,000 senior series 2000T 'AAA';

--$50,000,000 senior series 2000U 'AAA';

--$38,000,000 senior series 1998K 'AAA';

--$38,000,000 senior series 1998L 'AAA';

--$37,750,000 senior series 1998M 'AAA';

--$41,250,000 senior series 1998N 'AAA';

--$25,000,000 senior series 1996F 'AAA';

--$25,000,000 senior series 1996G 'AAA';

--$25,000,000 senior series 1996H 'AAA';

--$25,000,000 senior series 1996I 'AAA';

--$24,000,000 senior series 1995A 'AAA';

--$24,000,000 senior series 1995B 'AAA';

--$24,000,000 senior series 1995C 'AAA';

--$24,000,000 senior series 1995D 'AAA'.

Fitch has also upgraded the following issue:

$10,000,000 subordinate series 1998O 'AAA'.

Fitch confirms ratings on the outstanding bonds with respect to the issuance of $69,450,000 senior series 2007WW and $69,450,000 senior series 2007XX education loan revenue bonds issued by the Vermont Student Assistance Corporation. The senior series 2007 Bonds were issued pursuant to the 1995 Education Loan Revenue Bond Resolution as adopted on June 16, 1995 (the General Resolution), and as further supplemented by the Thirteenth Series Resolution, dated as of June 8, 2007. Additionally, Fitch upgrades the rating on the subordinate series 1998O Bonds to 'AAA' from 'A' as these bonds passed Fitch's cash flow stresses at the 'AAA' rating level.

The ratings reflect the ability of the trust estate to pay note principal 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 remarket their bonds at an auction now or in the future.

Fitch's ratings confirmation only addresses the effect of the issuance of the series 2007 bonds on the current ratings assigned by Fitch to the above captioned bonds. The series 2007 bonds, including the senior series 2007WW and senior series 2007XX bonds, will bear interest at a 35-day auction rate, payable semi-annually every June 15 and Dec. 15, commencing Dec. 15, 2007. The series 2007 Bonds have legal final maturity on Dec. 15, 2041.

Credit enhancement is based on the quality of the student loan portfolio; the debt service reserve account, and the ability of the transaction to pass stressful cash flow test. The debt service reserve account is sized at the greater of 2% of total bonds outstanding issued prior to 2007 and 0.75% of the series 2007 bonds or $500,000. The subordinate series 1998O bonds provide approximately 0.49% subordination to the current total amount of all outstanding senior series bonds. The payment of principal and interest when due is insured by Financial Guaranty Insurance Policies issued by Ambac Assurance Corporation for the series 2007 bonds and the above captioned bonds, except for the subordinate series 1998O bonds,. Additionally, a surety bond will be provided by Ambac to fund the debt service reserve requirement for all bonds outstanding.

The collateral consists of Federal Family Education Loan Program (FFELP) student loans, Health Education Assistance Program (HEAL) student loans, and VSAC's EXTRA, EXTRA Law, and EXTRA Medical private student loans. The FFELP loans represent approximately 85% of the collateral pool at closing, while the HEAL and VSAC EXTRA loans represent approximately 0.6% and 14.4% of the pool, respectively. The FFELP loans are guaranteed at 100%, 98% or 97% of principal and accrued interest, depending on origination date, by eligible guarantors and reinsured up to the same amounts by the U.S. Department of Education. The HEAL loans are guaranteed at 100% by the Secretary of the United States of Health and Human Services. VSAC's EXTRA, EXTRA Law, and EXTRA Medical student loans are not guaranteed by the U.S. Department of Education.

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.