Fitch Rates South Carolina Student Loan Corporation Education Loan Revenue Bonds, 2005 Series

Business Wire, July 19, 2005

NEW YORK -- Fitch Ratings assigns the following ratings to the education loan revenue bonds, 2005 series, issued by the South Carolina Student Loan Corporation (SCSLC):

--$264,000,000 2005 series A-1, 'AAA';

--$210,000,000 2005 series A-2 'AAA';

--$226,000,000 2005 series A-3 'AAA'.

The ratings are based on the quality of the student loan portfolio, the credit enhancement within the trust, and the sound legal structure of the transaction. The ratings reflect the ability of the trust to pay principal at maturity and timely interest. The ratings do not address the ability of the trustee to auction the collateral pool prior to the legal final maturity dates of the bonds.

The bonds are being issued pursuant to a General Resolution, dated as of June 7, 1996, and a Series Resolution, dated as of July 7, 2005. Credit enhancement within the trust consists of a reserve fund, overcollateralization, and excess spread. There are no subordinated bonds outstanding under the trust. All of the bonds may benefit from the reserve fund, which is sized in the aggregate to the greater of the sum of all amounts set forth in the respective series resolutions, $750,000, or 0.10% of the original principal amount of all bonds outstanding. The reserve fund requirement for the 2005 bonds sets forth that there shall not be less than 1.0% of all bonds outstanding on deposit in the reserve fund. If the collections for a distribution date are not sufficient to make required payments, the funds in the reserve account can be used to pay certain fees, and pay interest and principal at maturity. Following the deposit of proceeds from the 2005 issuance, the total reserve fund will equal $14,593,720.

Overcollateralization is derived from student loans, collections on loans, and earnings on eligible investments. Upon issuance and after application of the proceeds of the 2005 bonds, the trust's senior parity will be approximately 112.5%, calculated including the reserve fund. Parity is calculated as the ratio of principal and interest on the student loans, recoveries of principal, special allowance payments, interest subsidy payments, and money and securities held by the trustee under the General Resolution over outstanding senior bonds. In addition, SCSLC has covenanted that it will not issue any additional bonds under the General Resolution if immediately after such issuance senior parity would be less than 103%.

Proceeds from the issuance of the 2005 series bonds will be used to make a deposit to the loan account to acquire approximately $314.2 million of FFELP (Federal Family Education Loan Program) loans, make a $6.1 million deposit to the debt service reserve fund, optionally redeem $376.4 million of outstanding auction rate bonds, and pay the underwriting discount and costs of issuance.

The 2005 series A-1, A-2, and A-3 bond interest is indexed to the three-month London Interbank Offered Rate (LIBOR) plus a spread of 0.10%, 0.12%, and 0.14%, respectively, and payable quarterly commencing on the first business day of September 2005.

Principal payments on the 2005 series bonds will be paid on each quarterly distribution date, according to targeted amortization schedules for each tranche. The schedule for the series A-1 bonds begins on Sept. 1, 2011 and ends on Sept. 1, 2013. The schedule for the series A-2 bonds begins on Sept. 1, 2013 and ends on Dec. 1, 2015. The schedule for the series A-3 bonds begins on March 1, 2016 and ends on Dec. 1, 2018.

The entire portfolio of student loans securing the bonds are loans originated under the FFEL Program. The loans are guaranteed at either 100% or 98% of principal and accrued interest by an eligible guarantor(s), depending on loan origination date, and reinsured by the U.S. Department of Education up to the same amounts.

SCSLC is a nonprofit, public benefit 501(c)(3) corporation established under the laws of South Carolina on Nov. 15, 1973. SCSLC's purpose is to provide services and products that enable students and their families to finance the cost of post-secondary education. SCSLC has been authorized to provide loan origination, servicing, and financing for its own portfolio of student loans and, as an independent agent of the South Carolina State Education Assistance Authority (SCSEAA), provides loan servicing, origination, and program and operations support to SCSEAA.

SCSLC expects to service the trust's entire student loan portfolio and will maintain custody of and make collections on the student loans. Since 1979 SCSLC has serviced all student and parent loans it has made, all student and parent loans made by SCSEAA, and all student loans and parent loans financed or owned by various banks, pending purchase by SCSLC from bond proceeds. As of May 31, 2005, the aggregate principal amount of guaranteed loans being serviced by SCSLC was approximately $2.1 billion. Since SCSLC's inception, the cumulative aggregate principal amount of guaranteed loans serviced by SCSLC total approximately $4.9 billion.

Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies and relevant policies and procedures are also available from this site, at all times. This document will remain on the public site for seven days.