A rise in consolidation prepayments in some recent Federal Family Education Loan Program (FFELP) loans that back student loan ABS deals is a result of students taking advantage of the Direct Loan Consolidation Program that President  Barrack Obama invoked by executive authority in 2011.

According to a Fitch Ratings commentary released this morning,, this is likely just a one-time event and will therefore not have an immediate impact on the transactions. The consolidation prepayments rose to roughly 10% from current 1%-3%.

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