Fitch Rates $250 Million ISAC Student Loan Revenue Bonds

Business Wire, April 21, 2004

Business Editors

NEW YORK--(BUSINESS WIRE)--April 21, 2004

Fitch Ratings assigns the following ratings to Illinois Student Assistance Commission's (ISAC) Student Loan Revenue Bonds:

Ratings for new issuance:

-- $75,000,000 Taxable Senior Series VI-1, 'AAA';

-- $75,000,000 Taxable Senior Series VI-2, 'AAA';

-- $75,000,000 Taxable Senior Series VI-3, 'AAA';

-- $25,000,000 Taxable Subordinate Series VII, 'A'.

In addition, Fitch affirms the following ratings:

-- $70,000,000 Student Loan Revenue Bonds, Senior Series 2002 I-1

(Taxable), 'AAA';

-- $70,000,000 Student Loan Revenue Bonds, Senior Series 2002 I-2

(Taxable), 'AAA';

-- $70,000,000 Student Loan Revenue Bonds, Senior Series 2002 I-3

(Taxable), 'AAA';

-- $40,000,000 Student Loan Revenue Bonds, Subordinate Series

2002 II (Taxable), 'A';

-- $12,600,000 Student Loan Revenue Bonds, Senior Series III-1

(Tax-Exempt), 'AAA';

-- $32,650,000 Student Loan Revenue Bonds Senior Series III-2

(Tax-Exempt), 'AAA';

-- $88,150,000 Student Loan Revenue Bonds Senior Series IV-1

(Taxable), 'AAA';

-- $88,200,000 Student Loan Revenue Bonds Senior Series IV-2

(Taxable), 'AAA';

-- $88,200,000 Student Loan Revenue Bonds Senior Series IV-3

(Taxable), 'AAA';

-- $35,000,000 Student Loan Revenue Bonds Subordinate Series V

(Taxable), 'A'.

Fitch rates the taxable senior series VI 'AAA' and the taxable subordinate series VII bonds 'A'. Fitch also affirms the 'AAA' ratings on the taxable senior series 2002 I bonds, 2003 III and IV bonds; and the 'A' ratings on the taxable subordinate series 2002 II and 2003 V bonds.

The ratings are based on the quality of the collateral, the reserve fund sized at 2.0% of the of the aggregate principal amount of bonds outstanding, with a $500,000 minimum; the ability of the transaction to pass stressful cash flow tests at each rating level; and the sound legal structure. In addition, the ratings on the senior bonds are based upon the 12.0% subordination provided by subordinate bonds.

The ratings reflect the ability of the trust estate to redeem bonds at maturity and pay timely interest. The ratings do not address the ability of the trust to pay carry-over interest, nor do they address the ability of the auction-rate bondholders to successfully remarket their bonds at an auction now or in the future.

The collateral securing the bonds consists of Federal Family Educational Loan Program (FFELP) student loans and ISAC Alternative student loans. The acquisition period is scheduled to terminate October 1, 2005. At closing, the trust consists of approximately 87.6% FFELP student loans and 12.4% ISAC alternative student loans. The FFELP loans are guaranteed 100% or 98% of principal and accrued interest by the Department of Education (ED), depending upon origination date.

ISAC Alternative student loans are credit underwritten and serviced my ISAC. In addition, the ISAC alternative loans are self-insured from origination fees, borrower recoveries, and excess spread.

The bonds are issued under the third supplemental resolution to the 2002 General Resolution, dated April 2, 2004 and July 29, 2002, respectively. This is the third issuance under the 2002 General Resolution. The issuance proceeds will be used to finance FFELP loans, Institutional loans and alternative loans; fund the Debt Service Reserve Fund and Operating Fund; and pay costs of issuance.

The senior series VI and subordinate series VII are taxable 28-day auction rate certificates (ARCs) with accrued interest payable monthly. The final legal maturity date on the series 2004 VI and VII bonds is March 1, 2044.

ISAC has contracted with a number of entities to perform servicing functions, including the Illinois Designated Account Purchase Program (IDAPP), Nelnet Loan Services Inc., National Education Services (NES), Affiliated Computer Services, Inc., American Education Services/Pennsylvania Higher Education Assistance Agency (AES/PHEAA), Education Services of America, Inc., USA Group Loan Services, Inc., Great Lakes Educational Loan Services, Inc. (GLELSI), and Sallie Mae Servicing.

ISAC was established in 1957 as the State Scholarship Commission of the State of Illinois under the Student Assistance Act. Legislation enacted in August 1989 changed the name to Illinois Student Assistance Commission. Through its various programs, ISAC originates, guarantees and provides a secondary market for student loans.

The underwriter on this transaction is UBSPaineWebber, Inc.