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Fitch Rates Nelnet Student Loan Trust 2015-3
[May 28, 2015]

Fitch Rates Nelnet Student Loan Trust 2015-3


Fitch Ratings has assigned the following ratings to various classes of Nelnet Student Loan Trust (NSLT) 2015-3 student loan asset-backed notes as follows:

--$82,500,000 Class A-1 notes 'AAAsf'; Outlook Stable;

--$270,000,000 Class A-2 notes 'AAAsf'; Outlook Stable;

--$41,400,000 Class A-3 notes 'AAAsf'; Outlook Stable;

--$7,500,000 Class B notes 'A+sf'; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans including 24.68% rehabilitated (rehab) loans. In Fitch's opinion, the credit quality of the trust collateral is high, 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). Fitch currently rates the U.S. 'AAA'. The Rating Outlook is Stable.

Sufficient Credit Enhancement: Cash flow scenarios for class A and B notes were satisfactory under Fitch's respective stresses. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread, and for the class A notes, 1.87% subordination is provided by the class B notes. At closing, senior and total parity are expected to be 103.67% and 101.73%, respectively. A target OC amount equal to the greater of 2.10% of the adjusted pool balance and $2 million must be met before excess spread can be released from the trust.

Adequate Liquidity Support: Liquidity support is provided by an approximate $7.02 million reserve account (1.75% of outstanding note balance), funded at closing with note proceeds. On or after the April 2020 distribution date, the specified reserve requirement will be the greater of 0.25% of the outstanding note balance and 0.10% of the initial note balance.

Acceptable Servicing Capabilities: Xerox Education Services, LLC will service approximately 93.65% of the NSLT 2015-3 portfolio and PHEAA will service the remaining 6.35%. In Fitch's opinion, both servicers are acceptable servicers of FFELP student loans.

RATING SENSITIVITIES

Since FFELP student loan ABS (News - Alert) rely on the U.S. gvernment 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. For further discussion of Fitch's sensitivity analysis, please see the presale titled 'Nelnet Student Loan Trust 2015-3 (US ABS)', dated May 13, 2015, available at www.fitchratings.com.



DUE DILIGENCE USAGE

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


Additional information is available at www.fitchratings.com.

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985501

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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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