Fitch Rates PHEAA Student Loan Revenue Bonds.

NEW YORK -- Fitch Ratings has assigned ratings to the following student loan revenue bonds issued by the Pennsylvania Higher Education Assistance Agency (PHEAA):

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-1 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-2 'AAA';

E[acute accent]--$100,000,000 student loan revenue bonds, senior subseries JJ-3 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-4 'AAA';

E[acute accent]--$50,000,000 student loan revenue bonds, senior subseries JJ-5 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-6 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-7 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-8 'AAA';

E[acute accent]--$75,000,000 student loan revenue bonds, senior subseries JJ-9 'AAA';

E[acute accent]--$52,500,000 student loan revenue bonds, senior subseries JJ-10 'AAA';

E[acute accent]--$22,500,000 student loan revenue bonds, subordinate series KK 'A+';

E[acute accent]The ratings are based on the quality of the student loan portfolio, the credit enhancement provided, and the sound legal structure of the trust. The collateral consists of approximately 96% Federal Family Education Loan Program (FFELP) student loans and approximately 4% federally guaranteed health education assistance loans (HEALs). The senior bonds have 4.26% credit enhancement in the form of subordination and overcollateralization (OC), and excess spread overtime. The subordinate bonds have 0.88% credit enhancement in the form of OC, and excess spread overtime. In addition, the trust benefits from a debt service reserve account in the form of a surety bond provided by Ambac Assurance Corporation in the amount of $48.4 million. The surety bond provides liquidity to the trust by guaranteeing the timely payment of interest and principal when due. Fitch rates Ambac Assurance Corporation's insurer financial strength 'AAA'. E[acute accent]The ratings address the ability of the trust to pay bond 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. E[acute accent]The series JJ and KK bonds are issued pursuant to a Trust Indenture, dated as of Aug. 1, 1997, as further supplemented by the Thirty-Third Supplemental Trust Indenture, dated as of June 1, 2006. The bond proceeds will be deposited to the loan fund to acquire or originate student loans, and pay costs of issuance. E[acute accent]The series JJ and KK bonds are taxable, 28-day auction-rate securities, with interest paid semi-annually. The legal final maturity dates for the series JJ and KK bonds are June 1, 2046. E[acute accent]PHEAA, a public corporation and governmental instrumentality, is organized under the laws of the Commonwealth of Pennsylvania. PHEAA is authorized to issue bonds or notes for the purpose of purchasing, making or guaranteeing loans to students or parents.

E[acute accent]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.