2008-12-11 22:50:02 -

Fitch Ratings has affirmed eight classes from the Federal Family Education Loan Program (FFELP) student loan revenue bonds issued by Washington Student Loan Finance Association 1998 Indenture of Trust. The actions follow a review of the trust collateral performance taken in conjunction with Fitch's ongoing review of student loan transactions with auction rate exposure.
Overall, collateral performance for

the trust has been consistent with expectations from a net default and delinquency perspective. All of the bonds are tax-exempt auction rate securities currently paying interest at the maximum rate. The trust documents define the maximum rate for the 1998, 2000 and 2001 bonds as the lesser of 175% multiplied by the SIFMA index, 2.5% plus the SIFMA index and 12%. The trust defines the maximum rate for the 2003 bonds as the lesser of 175% multiplied by the SIFMA index, CP+0.75% and 12%. The maximum rate for the 2004 bonds is the lesser of 150% multiplied by the S&P weekly high grade index, CP+0.75%, T-Bill+1.25% and 17%. The maximum rate definition limits the amount of interest the trust can pay on the auction rate notes.
Parity ratios, or the ratio of assets to liabilities, have remained stable despite auction failures causing bonds to pay interest at the maximum rate. The total parity ratio for the trust as of Sept. 30, 2008, was 113.86%.
Credit enhancement consists of excess spread, overcollateralization and a reserve account.
The collateral supporting the bonds consists of federally guaranteed loans originated under the FFELP. FFELP loans are guaranteed by an eligible guarantor to at least 97% of principal and accrued interest, depending on loan origination date.
The student loan portfolio is serviced by Sallie Mae, ACS Education Services and Great Lakes Educational Loan Services, all of which carry a Proficient Plus rating from Fitch for servicing FFELP loans.
The ratings affirmed are as follows:
Washington Student Loan Finance Association 1998 Indenture of Trust:
--1998 A-3 senior at 'AAA';
--2000 A-1 senior at 'AAA';
--2001 A-2 senior at 'AAA';
--2002 A-3 senior at 'AAA';
--2002 A-4 senior at 'AAA';
--2003 A-1 senior at 'AAA';
--2004 A-1 senior at 'AAA';
--2004 A-2 senior at 'AAA'.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.


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