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TMCNet:  Fitch Affirms Nelnet Student Loan Trust 2008-4, Maintains Current Outlook

[March 27, 2014]

Fitch Affirms Nelnet Student Loan Trust 2008-4, Maintains Current Outlook

NEW YORK --(Business Wire)--

Fitch Ratings affirms the senior notes at 'AAAsf' and subordinate notes at 'A+sf' issued by Nelnet Student Loan Trust 2008-4. Fitch also maintains the Stable Outlook on the senior notes and the Positive Outlook on the subordinate notes.

KEY RATING DRIVERS

High Collateral Quality: The collateral consists of 100% Federal Family Education Loan Program (FFELP) loans. The credit quality of the trust collateral is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch affirmed the U.S. sovereign rating at 'AAA' with a Stable Outlook on March 24, 2014.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance), excess spread, and for the class A notes, subordination provided by the class B notes. Current senior and total parity for Nelnet Student Loan Trust 2008-4 is at 107.75% and 101% respectively. The trust is currently releasing cash as the 101% parity cash release level has been maintained.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at $1,326,612.

Acceptable Servicing Capabilities: National Education Loan Network acting as master servicer, and Nelnet, Inc. and ACS (News - Alert) as subservicers are responsible for the servicing of the trust. Fitch believes these servicers to be acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since the FFELP student loan ABS (News - Alert) relies on the U.S. government to reimburse defaults, 'AAAsf' FFELP ABS ratings will likely move in tandem with the 'AAA' U.S. sovereign rating. Aside from the U.S. sovereign rating, defaults and basis risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults and basis shock beyond Fitch's published stresses could result in future downgrades. Likewise, a buildup of credit enhancement driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

Fitch has taken the following rating actions:

Nelnet Student Loan Trust 2008-4:

--Class A-2 at 'AAAsf'; Outlook Stable;

--Class A-3 at 'AAAsf'; Outlok Stable;

--Class A-4 at 'AAAsf'; Outlook Stable;

--Class B at 'A+sf''; Outlook Positive.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 24, 2013);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (May 17, 2013);

--'Nelnet Student Loan Trust 2012-1 (US ABS)' (May 13, 2008);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (April 17, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=825338

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE '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 MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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