Fitch Rates NC State Education Assistance Auth Loan Rev Bonds.

NEW YORK -- Fitch assigns ratings to the following bonds issued by the North Carolina State Education Assistance Authority (NCSEAA):

Ratings for new issuance:

--$82,000,000 tax-exempt guaranteed student loan revenue bonds, 2003 series O-1 (senior lien), 'AAA';

--$82,000,000 tax-exempt guaranteed student loan revenue bonds, 2003 series O-2 (senior lien), 'AAA';

--$82,650,000 tax-exempt guaranteed student loan revenue bonds, 2003 series O-3 (senior lien), 'AAA'.

Ratings affirmed for existing debt:

--$200,000,000 tax-exempt guaranteed student loan revenue bonds, 2003 series M (senior lien), 'AAA';

--$270,000,000 taxable guaranteed student loan revenue bonds, 2003 series N LIBOR indexed bonds (senior lien), 'AAA';

--$125,000,000 tax-exempt guaranteed student loan revenue bonds, 2002 series K (senior lien), 'AAA';

--$135,000,000 taxable guaranteed student loan revenue bonds, 2002 series L (senior lien), 'AAA';

--$100,000,000 taxable guaranteed student loan revenue bonds, 2001 series I LIBOR indexed bonds (senior lien), 'AAA';

--$100,000,000 taxable guaranteed student loan revenue bonds, 2001 series I CP indexed bonds (senior lien), 'AAA';

--$60,000,000 tax-exempt guaranteed student loan revenue bonds, 2001 series J (senior lien), 'AAA';

--$105,000,000 taxable guaranteed student loan revenue bonds, 2001 series H LIBOR indexed bonds (senior lien), 'AAA';

--$120,000,000 taxable guaranteed student loan revenue bonds, 2001 series H CP indexed bonds (senior lien), 'AAA';

--$200,000,000 taxable guaranteed student loan revenue bonds, 2000 series G (senior lien), 'AAA';

--$240,000,000 taxable guaranteed student loan revenue bonds, 1998 series F (senior lien), 'AAA';

--$30,000,000 tax-exempt guaranteed student loan revenue bonds, 1997 series E (senior lien), 'AAA';

--$25,000,000 guaranteed student loan revenue bonds, 1996 series C (subordinate lien), 'A';

--$121,900,000 taxable guaranteed student loan revenue bonds, 1995 series B (senior lien), 'AAA';

--$17,350,000 guaranteed student loan revenue bonds, 1995 series A (subordinate lien), 'A'.

Fitch rates the senior lien 2004 series O-1, O-2 and O-3 bonds 'AAA'. In addition, Fitch affirms the existing senior lien debt ratings of 'AAA' and the existing subordinate lien debt ratings of 'A'. All of the debt is issued under a general resolution adopted Sept. 14, 1995 and amended through Oct. 7, 2003. The series O bonds are issued under series resolution O, adopted Aug. 13, 2004. The purpose of this issuance is to finance Federal Family Education Loan Program (FFELP) guaranteed student loans previously originated with funds advanced on an interim basis, finance FFELP guaranteed student loans made subsequent to this issuance, fund the senior lien reserve fund, and to pay costs and fees associated with the issuance.

The ratings are based on the collateral quality; the credit enhancement provided the sound legal structure. The ratings address the ability of the trust to pay bond principal at maturity and timely interest. The ratings do not address the ability of auction rate bondholders to successfully redeem their bonds at an auction now or in the future.

The series O bonds are tax-exempt, 35-day auction-rate bonds, with interest paid semiannually, beginning January 2005. The legal final maturity date for the series O bonds is July 1, 2034.

The collateral securing the bonds consists entirely of FFELP student loans. FFELP loans are guaranteed at least of principal and accrued interest 98% by an eligible guarantor and are re-insured by the U.S. Department of Education (ED).

College Foundation, Inc. (CFI) is the servicer for the loans. CFI is a private, not-for-profit corporation established under Chapter 55A of the General Statutes of North Carolina for the purpose of assisting North Carolina students in defraying education expenses while attending eligible educational institutions. CFI is an agent and independent contractor for NCSEAA and serves as the central loan administrator and servicer for the North Carolina Federal Family Education Loan Program (NCFFELP).

A political subdivision of the State of North Carolina, NCSEAA is the primary instrumentality for providing a system of financial assistance for post-secondary educational opportunities for both North Carolina's citizens and other students who enroll in institutions within the state.