Fitch Ratings expects a growth in rehabilitation (rehab) student loans. Although rehab loans have always comprised a part of FFELP SLABS, their unique characteristics and performance history make separate assumptions necessary when analyzing student loan pools that have this type of collateral.

After the recent economic downturn, the supply of such loans should rise. This increase is from those borrowers who previously defaulted on loans start to re-perform, are reinsured by the U.S. Department of Education, and become eligible for inclusion in student loan ABS deals, Fitch said.

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