Fitch Maintains Negative Watch on NTHEA Series 2010-1 Bonds

Fitch Ratings maintains the Negative Rating Watch on the series 2010-1 student loan revenue bonds currently rated 'AAAsf' issued by North Texas Higher Education Authority, Inc.

KEY RATING DRIVERS

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

Rating Watch Maintained: All existing and new issuances of 'AAA' rated tranches of FFELP securitizations are on Rating Watch Negative following the revision of the long-term foreign and local currency Issuer Default Ratings (IDRs) of the U.S.

Sufficient Credit Enhancement (CE): CE is provided by overcollateralization (OC; the excess of trust's asset balance over bond balance) and excess spread. As of July 2013, total parity is 113.10% (11.58% CE). Cash cannot be released from the trust until the total parity reaches 115% or after July 1, 2020.

Adequate Liquidity Support: Liquidity support for note is provided by a reserve account. The reserve is sized equal to the greater of 1% of the pool balance, and $500,000.

Acceptable Servicing Capabilities: Higher Education Servicing Corporation (HESC) is the master servicer and will provide day-to-day servicing for approximately 58% of the loans being securitized. Pennsylvania Higher Education Assistance Agency will be the backup servicer for those loans serviced by HESC. Day-to-day servicing for the remainder of the portfolio will be provided by Edfinancial Services, LLC (27%) and Nelnet Servicing, LLC (15%). All servicers have demonstrated adequate servicing capabilities.

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:

North Texas Higher Education Authority, Inc. May 1, 2010 Indenture Series 2010-1:

-- A-1 bond 'AAAsf' maintained on Rating Watch Negative;

-- A-2 bond 'AAAsf' maintained on Rating Watch Negative.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' dated May 24, 2013;

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' dated May 17, 2013.

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708661

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=708795

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=813810

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