Fitch Affirms 40 Classes from the Vermont Student Assistance Corp., 1995 Indenture

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed 40 classes from the Federal Family Education Loan
Program (FFELP) student loan revenue bonds issued by Vermont Student Assistance
Corporation (VSAC), 1995 Indenture of Trust. The actions follow a review of
trust collateral performance taken in conjunction with Fitch's ongoing review of
student loan transactions with auction-rate exposure.

The collateral supporting the bonds consists of 85% FFELP, 0.5% Health Education
Assistance Program (HEAL), and 14.5% VSAC's EXTRA, EXTRA Law, and EXTRA Medical
private student loans. FFELP loans are guaranteed by an eligible guarantor to at
least 97% of principal and accrued interest, depending on loan origination date.
The FFELP loans are also reinsured by the U.S. Department of Education up to the
same amounts. The HEAL loans are guaranteed at 100% by the Secretary of the
United States of Health and Human Services. VSAC's EXTRA, EXTRA Law, and EXTRA
Medical student loans are self insured.

Overall, collateral performance for the trust has been consistent with
expectations from a net default and delinquency perspective. Approximately 79%
of the notes are tax-exempt auction-rate securities and the remaining 21% are
taxable auction-rate securities which are currently earning interest at the
maximum rate. The trust documents define the tax-exempt maximum auction rate as
the lesser of (a) the applicable percentage of the after-tax equivalent rate and
the Kenny Index, and (b) the maximum interest rate which is equal to the lesser
of (i) 14% and (ii) maximum interest rate permitted under the laws of the State
of Vermont. The after-tax equivalent rate for the tax-exempt notes is equal to
the lesser of (i) 'AA' rated 30-day commercial paper rate on such date
multiplied by one minus the statutory corporate tax rate. The maximum rate for
the taxable bonds is equal to the lesser of (a) the maximum auction rate which
is the average annual 91-day Treasury Bill rate plus a spread and (b) the
maximum interest rate which is equal to the lesser of 18% and (b) the maximum
interest rate permitted by the laws of the State of Vermont.

Although the trust continues to experience failed auctions causing the bonds to
pay interest at the maximum rate, the senior and total parity ratio, or the
ratio of assets to liabilities are at 104.6% and 104.0%, respectively, as of
Sept. 30, 2008.

Credit enhancement consists of excess spread, overcollateralization, and a debt
service reserve fund. Additionally, the senior notes benefit from subordination
provided by the lower priority notes. The excess spread generated by the trusts
has been sufficient to cover any losses and pay note principal to build credit
enhancement.

The student loan portfolio is serviced by VSAC which is not rated by Fitch.

Fitch affirms the following Education Loan Revenue Bonds at 'AAA':

1995-A

1995-B

1995-C

1996-F

1996-G

1996-H

1998-K

1998-L

1998-M

1998-O

2000-R

2000-S

2000-T

2001-V

2001-W

2001-X

2001-Y

2001-Z

2001-AA

2002-BB

2002-CC

2002-DD

2003-FF

2003-GG

2003-HH

2003-II

2003-JJ

2003-KK

2003-LL

2004-MM

2004-NN

2004-OO

2004-PP

2005-RR

2005-SS

2006-UU

2006-VV

2007-WW

2007-XX

2007-YY

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.

Fitch Ratings, New York
Jeff Prackup, 212-908-0839
Stefanie Leung, 212-908-0826
or
Media Relations:
Sandro Scenga, 212-908-0278
Email: sandro.scenga@fitchratings.com

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