Fitch Rates Indiana Secondary Market for Education Loans Inc. 2014

Fitch Ratings assigns the following ratings to the Indiana Secondary Market for Education Loans Inc. (ISM) series 2014 student loan asset-backed notes as follows:

--$152,500,000 series 2014 notes 'AAAsf'; Outlook Stable.

KEY RATING DRIVERS

High Collateral Quality: The trust collateral comprises Federal Family Education Loan Program (FFELP) loans with guaranties provided by eligible guarantors and reinsurance provided by the U.S. Department of Education (ED) for at least 97% of principal and accrued interest.

Sufficient Credit Enhancement: The cash flow scenario for the 2014 notes was satisfactory under Fitch's 'AAAsf' stress. At closing, parity is expected to be 103.67%. Total credit enhancement (CE) is provided by overcollateralization and excess spread. The trust is currently in turbo, and no cash is being released from the trust until all the bonds are paid in full.

Adequate Liquidity Support: Liquidity support for the 2014 notes is provided by a capitalized interest fund sized at $1.54 million and a reserve fund sized at approximately $770,374 funded at closing with note proceeds and will be maintained at the reserve fund requirement equal to the greater of 0.50% of the current pool balance and $250,000.

Acceptable Servicing Capabilities: The 2014 portfolio will be serviced by American Education Services (AES - 84.12%), a servicing division of Pennsylvania Higher Education Assistance Agency (PHEAA), Xerox Education Services, LLC (XES-ES; 8.13%) and Great Lakes Education Loan Services Inc. (GLELSI; 7.75%). All servicers are acceptable servicers of FFELP student loans.

SENSITIVITY ANALYSIS

Since FFELP student loan ABS rely on the U.S. government to reimburse defaults, 'AAA'sf 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 our sensitivity analysis, please see the presale titled 'ISM 2014', dated November 12, 2014.

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

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (May 20, 2014);

--'Rating U.S. Federal Family Education Loan Program Student Loan ABS Criteria' (June 23, 2014);

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

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

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

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750530

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=934255

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