Fitch Affirms SLC Student Loan Trust 2005-1; Outlook Stable

NEW YORK--()--Fitch Ratings has affirmed the senior and subordinate notes issued by SLC Student Loan Trust 2005-1 at 'AAAsf' and 'Asf', respectively. The Rating Outlook remains Stable for all notes.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral is comprised of Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest. Fitch's current U.S. sovereign rating is 'AAA' with a Stable Rating Outlook.

Sufficient Credit Enhancement: Credit enhancement (CE) is provided by excess spread. For the class A notes, subordination is provided by the class B notes. As of October 2015, the senior and total parities are 104.65% and 100%, respectively. The trust can release cash as long as the 100% total parity is maintained.

Adequate Liquidity Support: Liquidity support for the notes is provided by a reserve fund sized at the greater of 0.25% of the pool balance of the loans and $3,056,269. The reserve fund is sized at the floor of $3,056,269 as of October 2015.

Acceptable Servicing Capabilities: Navient Solutions, Inc. (formerly known as Sallie Mae, Inc.) is the servicer of the trust's student loan pool. In Fitch's opinion, Navient Solutions, Inc. is an acceptable servicer of FFELP student loans.

Fitch Ratings reviewed SLC Student Loan Trust 2005-1 using its existing and proposed FFELP ABS criteria, listed below.

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. However, a buildup of credit enhancement 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:

SLC Student Loan Trust 2005-1 notes:

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

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

--Class B-1 at 'Asf'; Outlook Stable.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds (pub. 19 Dec 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=838868

Exposure Draft: Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 18 Nov 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872755

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Rating Criteria for Structured Finance Servicers (pub. 23 Apr 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=864375

Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria (pub. 23 Jun 2014)

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

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=995300

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=995300

Endorsement Policy

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

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Contacts

Fitch Ratings
Primary Analyst
Victoria Ohorodnyk
Associate Director
+1-212-908-0866
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan
Managing Director
+1-212-908-0156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Victoria Ohorodnyk
Associate Director
+1-212-908-0866
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Committee Chairperson
Kevin Corrigan
Managing Director
+1-212-908-0156
or
Media Relations:
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com