Fitch Expects to Rate Nelnet Student Loan Trust 2014-1

Fitch Ratings expects to assign the following ratings to the Nelnet Student Loan Trust 2014-1 student loan asset-backed notes as follows:

-- $445,000,000 class A notes 'AAAsf'; Rating Watch Negative;

-- $13,500,000 class B notes 'A+sf'; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral consists of 100% Federal Family Education Loan Program (FFELP) loans, including approximately 25.0% of rehabilitated (rehab) loans. In Fitch's opinion, the credit quality of the trust collateral is high based on the guarantees provided by the transaction's eligible guarantors and at least 97% reinsurance of principal and accrued interest provided by the U.S. Department of Education (ED).

Rating Watch Negative: 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 of the U.S.

Sufficient Credit Enhancement: Cash flow scenarios for class A and B notes were satisfactory under Fitch's stresses. At closing, total and senior parity are expected to be 100.55% and 103.60%, respectively. Total credit enhancement (CE) is provided by overcollateralization (OC) and excess spread, and for class A notes, 2.94% subordination is provided by class B notes. A target OC amount equal to the greater of 1.25% of the adjusted pool balance and $2 million must be met before excess cash can be released from the trust.

Adequate Liquidity Support: Liquidity support for NSLT 2014-1 notes is provided by a $2.5 million capitalized interest fund and a $1.146 million (0.25% of outstanding notes) reserve account, both of which are funded at closing with note proceeds.

Acceptable Servicing Capabilities: Nelnet Inc., will service 92.5% of the 2014-1 portfolio, while Great Lakes Educational Loan Services Inc. (GLELSI) will service the remaining 7.5%. Fitch considers all servicers to be acceptable servicers of FFELP loans.

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. For further discussion of Fitch's sensitivity analysis, please see the presale titled 'NSLT 2014-1', dated Jan. 28, 2014, available at www.fitchratings.com.

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

Applicable Criteria and Related Research:

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

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

-- 'Representations, Warranties and Enforcement Mechanism in Global Structure Finance Transactions' (April 17, 2012).

Applicable Criteria and Related Research: Nelnet Student Loan Trust 2014-1 (US ABS)
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=731178

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 - Effective Apr. 7, 2011 to Apr. 3, 2012
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=616766

Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions -- Amended
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=676496

Additional Disclosure

Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=817637

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