Fitch Rates Brazos Higher Education Authority Student Loan Bonds, Series 2006.

NEW YORK -- Fitch rates Brazos Higher Education Authority, Inc. (Brazos) student loan revenue bonds, series 2006 (series 2006 bonds) as follows:

-- $56,900,000 taxable senior series 2006A-3 (28-Day Auction Rate) 'AAA';

-- $56,900,000 taxable senior series 2006A-4 (28-Day Auction Rate) 'AAA';

-- $95,800,000 taxable senior series 2006A-5 (28-Day Auction Rate) 'AAA';

-- $47,900,000 taxable senior series 2006A-6 (28-Day Auction Rate) 'AAA';

-- $30,700,000 taxable senior series 2006B-1 (28-Day Auction Rate) 'A'.

Fitch confirms the following existing debt:

-- $44,000,000 senior series 1999A-1 at 'AAA';

-- $6,150,000 senior series 1999A-2 at 'AAA';

-- $78,200,000 senior Series 1999A-3 at 'AAA';

-- $78,200,000 senior series 1999A-4 at 'AAA';

-- $78,200,000 senior series 1999A-5 at 'AAA';

-- $78,300,000 senior series 1999A-6 at 'AAA'.

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 0.75% of the aggregate principal amount of the bonds outstanding, with a $500,000 minimum. The ratings address the ability of the trust to redeem notes 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 holders to successfully redeem their notes at an auction now or in the future.

The series 2006 bonds are the sixth issuance under the Indenture of Trust, as amended and restated June 1, 2006, between Brazos Higher Education Authority, Inc. and Wells Fargo National Association, as trustee. The proceeds of the Series 2006 Bonds are being used to acquire FFELP student loans, make a deposit to the reserve fund and pay issuance costs.

The taxable senior series 2006A-3 through series 2006A-6 bonds and the taxable subordinate series 2006B-1 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 Series 2006 Bonds, listed above, is June 1, 2042.

As noted, the collateral securing the notes 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.