Fitch Ratings said today that a cap on the allocations of borrower accounts to existing not for profit servicers of the Federal Direct Loan Program (FDLP) could affect the performance of Federal Family Education Loan Program (FFELP) -backed securities.

The cap results from an obscure aspect of the Budget Control Act of 2011 which limits these servicers to initial statutory 100,000 accounts per eligible not for profit entity and no new not for profit servicers will be able to receive any direct loans through fiscal year 2013.

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