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Fitch Affirms SLM 2004-1 and SLM 2004-2

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the senior notes rated 'AAAsf' and subordinate notes rated 'Asf' issued by SLM Student Loan Trust 2004-1 and SLM Student Loan Trust 2004-2. The Rating Outlook on all classes remains Stable.

KEY RATING DRIVERS

High Collateral Quality: Both SLM 2004-1 and SLM 2004-2 collateral consists of 100% 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: The notes for both trusts benefit from excess spread, and for the senior notes, subordination of the class b notes. As of March 2014, reported senior or total parity is 104.52% and 100%, respectively, for SLM 2004-1, and 104.74% and 100% for SLM 2004-2. Cash is being released from both trusts given that the 100% total parity release level is maintained. Additionally, both trusts are approaching a 40% pool factor, at which time the reserve account balance will be excluded from the parity calculation, resulting in overcollateralization for the trusts.

Adequate Liquidity Support: Liquidity support is provided by a Reserve Fund sized at the greater of 0.25% of the pool balance and $3,007,834 for SLM Student Loan Trust 2004-1; and for SLM Student Loan Trust 2004-2, the greater of 0.25% of the pool balance and $4,516,068.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.), as servicer, will be responsible for servicing the portfolios. Fitch has reviewed the servicing operations of Navient Solutions and believes it to be an acceptable servicer of FFELP student loans.

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 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 ratings:

SLM Student Loan Trust 2004-1

--Class A-3 at 'AAAsf'; Outlook Stable;

--Class A-4 at 'AAAsf'; Outlook Stable;

--Class A-5 at 'AAAsf'; Outlook Stable;

--Class A-6 at 'AAAsf'; Outlook Stable;

--Class B at 'Asf'; Outlook Stable

SLM Student Loan Trust 2004-2

--Class A-4 at 'AAAsf'; Outlook Stable;

--Class A-5 at 'AAAsf'; Outlook Stable;

--Class A-6 at 'AAAsf'; Outlook Stable;

--Class B at '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).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

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

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=836568

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Contacts

Fitch Ratings
Jared Smith
Analyst
+1-212-908-0371
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations
Sandro Scenga, New York, +1-212-908-0278
sandro.scenga@fitchratings.com