Fitch Rates Nelnet Education Loan Funding Series 2004-2 Issue.

Business Editors

NEW YORK--(BUSINESS WIRE)--April 30, 2004

Fitch Ratings assigns ratings to the following student loan asset-backed obligations issued by Nelnet Education Loan Funding (NELF), Inc. (f/k/a NEBHELP, Inc.)

Ratings for new issuance:

-- $167,000,000 student loan asset-backed notes, senior class

2004A-1 'AAA';

-- $178,000,000 student loan asset-backed notes, senior class

2004A-2 'AAA';

-- $103,000,000 student loan asset-backed notes, senior class

2004A-3 'AAA';

-- $203,000,000 student loan asset-backed notes, senior class

2004A-4 'AAA';

-- $200,000,000 student loan asset-backed notes, senior class

2004A-5a 'AAA';

-- $ 68,050,000 student loan asset-backed notes, senior class

2004A-5b 'AAA';

-- $ 68,050,000 student loan asset-backed notes, senior class

2004A-5c 'AAA';

-- $ 15,300,000 student loan asset-backed notes, subordinate class

2004B-1 'AA';

-- $ 15,300,000 student loan asset-backed notes, subordinate class

2004B-2 'AA'.

The ratings are based on the high quality of the Federal Family Education Loan Program (FFELP) student loan collateral, the credit enhancement within the trust, and the transactions sound legal structure. The ratings reflect the ability of the trust estate to redeem the notes at maturity and pay timely interest. The ratings do not address any carryover amounts that may accrue on the 2004-1 notes, the ability of the reset-rate or auction-rate noteholders to tender their notes at a respective remarketing date or an auction date now or in the future nor do they address the ability of the trust to auction the collateral pool prior to the stated maturity dates of the notes. In addition, the ratings rely on the interest rate cap agreements between the trust and Morgan Stanley Capital Services, Inc. rated 'AA-/F1+' by Fitch.

The credit enhancement for the trust consists of excess spread, 3% subordination, a capitalized interest account, and a reserve fund, sized to a minimum of the greatest of 25 basis points (bps) of the aggregate outstanding pool balance or 15 bps of the aggregate initial pool balance.

Issuance proceeds from the sale of the series 2004-2 notes will be used to acquire approximately $995.8 million in consolidated FFELP student loans, make a $2.5 million deposit to the debt service reserve fund, and make a $16 million deposit to the capitalized interest fund. The costs of issuance will be paid by NELF.

Substantially all of the student loans to be pledged as collateral for the notes are eligible to receive minimum special allowance payments (SAP) of 9.5%. At closing, the total and senior parity ratio will be 100% and 103.1%, respectively.

The transaction has a senior subordinate structure and nine classes of notes. The senior class A notes hold a priority lien on the trust assets and in payment of principal over the class B subordinate notes. The class A-1, A-2, A-3, A-4 and A-5a note interest will initially be indexed to the three-month London Interbank Offered Rate (LIBOR) plus 0.00%, 0.03%, 0.10%, 0.14% and 0.14% respectively. The class A-5b, A-5c and class B-1 and B-2 notes will pay interest based on the 28-day auction rate. Interest for the LIBOR-indexed notes will be paid quarterly, commencing Aug. 25, 2004, while interest for the auction-rate notes will be paid on the last business day of each auction period.

Initially, the series A-5a reset-rate notes will pay interest at three-month LIBOR plus a 0.14%, and the first remarketing date will occur within five years. At each reset rate remarketing date the class A-5a notes will be remarketed and pay interest at either a fixed- or floating-rate. To ensure that the transaction is able to pay fees associated with a remarketing, the reset-rate notes will benefit from a remarketing fee fund. Required remarketing fees will be paid from this account at the reset date.

Principal will be paid sequentially until the class A-1 through A-4 note principal is paid in full. Then principal will be paid on the class A-5a, A-5b and A-5c pro rata until they are paid in full. The class B note principal will be paid pro rata from the note payment fund when the class A notes are no longer outstanding. The class B note principal may be paid before all of the class A note principal is paid out from money that is not property of the trust estate. The 2004-2 notes are subject to optional and mandatory redemption.

Nelnet, Inc. will service the student loan portfolio.

NELF is a bankruptcy remote, limited purpose corporation formed under the laws of the State of Nebraska. NELF is a wholly owned subsidiary of Nelnet, Inc. Prior to April 21, 2003, NELF was known as NEBHELP, INC.