Fitch Affirms the Sr Notes & Upgrades the Sub Notes of Vermont Student Assistance Corp Ser 2012-1

Fitch Ratings affirms the senior student loan notes at 'AAAsf' and upgrades the subordinate notes to 'AAsf' from 'Asf' issued by Vermont Student Assistance Corp Series 2012-1. The Rating Outlook on the notes, which is tied to the sovereign rating of the U.S. government, is Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of 100% of 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 at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED).

Sufficient Credit Enhancement: Cashflow scenarios were satisfactory under Fitch's assumptions. Current senior and total parity is 105.60% and 102.80% respectively, and credit enhancement (CE) is about 5.29% and 2.74%, respectively. Additionally, the trust is in turbo and no cash will be released until all notes are paid in full.

Adequate Liquidity Support: Liquidity support is provided by reserve account (0.25% of outstanding notes or

$1,155,750.

Acceptable Servicing Capabilities: Vermont Student Assistance Corporation services 100% of the loans. In Fitch's opinion, VSAC is an acceptable servicer of FFELP student loans. Additionally, Nelnet serves as back-up servicer for this trust.

Rating Sensitivities

Since FFELP student loan ABS 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 taken the following rating actions:

Vermont Student Assistance Corp Series 2012-1:

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

--Class B upgraded to 'AAsf' from 'Asf'; Outlook Stable.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

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

--'Vermont Student Assistance Corporation Series 2012-1 (US ABS)'(Nov. 14, 2012).

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

--'Vermont Student Assistance Corporation, Series 2012-1 -- Appendix'(Nov. 14, 2012);

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

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria - Effective from 20 May 2014 to 4 August 2014

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821

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

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

Vermont Student Assistance Corporation Series 2012-1 (US ABS)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695031

Vermont Student Assistance Corporation, Series 2012-1 -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=695090

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=907056

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