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TMCNet:  Fitch: U.S. SLABS Universe Shrinking as Outstanding Loans Top $1 Trillion

[September 04, 2014]

Fitch: U.S. SLABS Universe Shrinking as Outstanding Loans Top $1 Trillion

NEW YORK --(Business Wire)--

Link to Fitch Ratings' Report: Student Loan ABS (News - Alert) and the College Tuition Bubble (College Costs Continue to Rise, Despite Warning Signs)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=760927

The size of the student loan ABS subsector continues to shrink as the broader universe expands to record-highs, according to Fitch Ratings in a follow-up to its 'College Tuition Bubble' report from last year.

Outstanding student loans totaled $1.1 trillion as of second-quarter 2014 (2Q'14) and remains firmly entrenched behind mortgage loans as the second largest consumer debt segment. Of that amount, less than 25% was securitized and funded through the ABS market. And that number continues to fall.

Student loan ABS issuance has fallen significantly in recent years, to $14 billion in 2011 from $67 billion in 2006. 'The termination of the FFELP program four years ago figures to dampen student loan ABS issuance further going forward,' said Senior Director Tracy Wan.

Government-backe student debt still makes up the vast majority of student loans. However, private loan issuance is showing signs of bouncing back after languishing the last four years. And the compositional makeup of these loans has improved, according to Wan.

'Private student loan ABS transactions issued after the financial crisis are benefiting from significantly higher credit enhancement and more stringent underwriting standards on the underlying loans,' said Wan. 'As the economy recovers, performance for both federal and private programs stands to improve.

'Student Loan ABS and the College Tuition Bubble' is available at 'www.fitchratings.com' or by clicking on the above link.

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

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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