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Fitch Affirms Scholar Funding Trust's 2012-A Senior Notes
[April 16, 2015]

Fitch Affirms Scholar Funding Trust's 2012-A Senior Notes


Fitch Ratings affirms at 'AAAsf' the senior student loan notes issued by Scholar Funding Trust 2012-A. The Rating Outlook for the senior notes, which is tied to the sovereign rating of the U.S. government, is Stable.

KEY RATING DRIVERS

High Collateral Quality: The collateral consists of 100% rehab 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 currently rates the U.S. 'AAA' with a Stable Outlook.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of the March 2015 distribution date, total parity remained steady at 105.99%, which is the release level.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at $342,538 (0.25% of the bond balance, with a floor of 0.15%). Additionally, there a capitalized interest account currently sized at $1.3 million, scheduled to release on July 28th, 2017.

Acceptable Servicing Capabilities: JP Morgan (News - Alert) Chase Bank N.A. is the master servicer and Xerox-ES and Tru Student, Inc. are the sub-servicer of this trust. Fitch believes all servicers to be acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS (News - Alert) rely 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 affirmed the following:

Scholar Funding Trust 2012-A:

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

A comparison of the transaction's RW&Es to those of typical RW&Es for student loans is available by accessing the reports below:

--'Scholar Funding rust 2012-A, Class A Student Loan Asset-Backed Notes -- Appendix' (June 12, 2012);



--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended' (Oct. 31, 2014).

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


Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014).

--'Scholar Funding Trust 2012-A, Class A Student Loan Asset-Backed Notes (US ABS)' (June 12, 2012).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria - Effective from 4 August 2014 to 31 March 2015

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Scholar Funding Trust 2012-A, Class A Student Loan Asset-Backed Notes (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681409

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=983065

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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