OREANDA-NEWS. Fitch Ratings has affirmed the 'AAAsf' ratings on the series 2011-2 student loan notes issued by the State Education Assistance Authority, a political subdivision of the State of North Carolina. The Rating Outlook remains Stable for all notes.

KEY RATING DRIVERS
High Collateral Quality: The trust collateral is comprised entirely of student loans originated under the Federal Family Education Loan Program (FFELP). The credit quality of the trust is high, in Fitch's opinion, based on the guarantees provided by the transaction's eligible guarantor and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. The Stable Outlook on the notes is consistent with Fitch's affirmation of the U.S. sovereign rating at 'AAA', Outlook Stable.

Sufficient Credit Enhancement: CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of September 2015, parity is 107.62%. Cash cannot be released from the trust until all of the notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by a Debt Service Reserve Fund currently sized at the greater of 0.25% of the pool balance and $535,156.

Acceptable Servicing Capabilities College Foundation, Inc. as servicer and Nelnet Servicing, LLC as backup servicer are responsible for servicing the trust. Fitch views both College Foundation and Nelnet as acceptable servicers of FFELP student loans.

On Nov. 18, 2015, Fitch released its exposure draft which delineates revisions it plans to make to the 'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria', dated June 23, 2014. Fitch has reviewed this transaction under both the existing and proposed criteria, which has resulted in affirming the senior notes at 'AAAsf' and the Outlooks remaining Stable.

RATING SENSITIVITIES
Since the FFELP student loan ABS 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, basis risk, and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions. Additional defaults, basis shock beyond Fitch's published stresses, lower than expected payment speed, and other factors could result in future downgrades. Likewise, a buildup of CE driven by positive excess spread given favorable basis factor conditions could lead to future upgrades.

DUE DILIGENCE USAGE
No third party due diligence was provided or reviewed in relation to this rating action.

Fitch has affirmed the following ratings:

North Carolina State Education Assistance Authority Series 2011-2
--Class A-2 at 'AAAsf'; Outlook Stable;
--Class A-3 at 'AAAsf'; Outlook Stable.