Fitch Rates New Jersey Higher Education Student Assistance Authority's Bond Issue.

NEW YORK -- Fitch assigns ratings to the following student loan revenue bonds issued by Higher Education Student Assistance Authority (State of New Jersey):

-- $67,500,000 2005 series A, 'AAA';

-- $67,500,000 2005 series B, 'AAA';

-- $45,000,000 2005 series C, 'AAA';

-- $45,000,000 2005 series D, 'AAA'.

The ratings are based on the support of a financial guaranty insurance policy provided by MBIA Insurance Corporation (insurer financial strength rated 'AAA' by Fitch). The 2005 series bonds are issued pursuant to the eighth supplemental indenture, dated as of May 1, 2005, to an indenture of trust, dated as of June 1, 1998. The 2005 series bond proceeds will be used to make, acquire, or purchase $118.5 million of fixed-rate private loans, $20 million of private consolidation loans, and $80.7 million of FFELP loans, as well as make a deposit to the debt service reserve fund and pay costs of issuance.

The tax-exempt 2005 series bonds are 35-day auction-rate securities, with interest paid semiannually on the first of each June and December, commencing on Dec. 1, 2005.

At closing the trust was composed of approximately 74% NJCLASS private loans and 26% federally guaranteed FFELP loans. The NJCLASS loans are credit-tested private loans which are not guaranteed by the federal government or any third party.

The FFELP student loans pledged under the indenture are serviced by Sallie Mae Servicing and Pennsylvania Higher Education Assistance Agency (PHEAA), while the private loans are serviced by the Higher Education Student Assistance Authority (HESAA).

HESAA is a public body corporate and politic, which is in, but not of, the Department of State of the State of New Jersey and an instrumentality of the state. The authority was established in 1999 as the successor to the New Jersey Higher Education Assistance Authority to provide further access to post-secondary education.