Fitch Ratings has downgraded the rating of the class A-2 notes of SLC Student Loan Trust 2009-1.

The Rating Outlook remains Negative. Fitch has also affirmed the ratings of all outstanding classes of SLC Student Loan Trust 2005-2, SLC Student Loan Trust 2009-3 and SLC Student Loan Trust 2010-1, and their Rating Outlooks remain at current levels.

RATING ACTIONS

Entity / Debt

Rating

Prior

SLC Student Loan Trust 2005-2

A-4 784420AJ0

LT

AAAsf

Affirmed

AAAsf

B 784420AK7

LT

Asf

Affirmed

Asf

SLC Student Loan Trust 2009-1

A-2 78444QAB8

LT

AAsf

Downgrade

AAAsf

SLC Student Loan Trust 2009-3

A 78444TAA4

LT

AAAsf

Affirmed

AAAsf

SLC Student Loan Trust 2010-1

A 78444WAA7

LT

AAAsf

Affirmed

AAAsf

Page

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VIEW ADDITIONAL RATING DETAILS

SLC 2005-2: Both the class A-4 and class B notes passed the credit and maturity stresses for their respective ratings with their Rating Outlooks remaining at current levels. The class B notes do not meet the minimum parity requirement of 101.0% for a 'AAsf' rating per Fitch's FFELP Rating Criteria. The Rating Outlook on the class A-4 notes remains Negative due to the Outlook assigned to the U.S. sovereign Issuer Default Rating (IDR).

SLC 2009-1: The class A-2 notes have been downgraded to 'AAsf' from 'AAAsf' due to increased maturity risk in the transaction, resulting from the continued increase in the remaining term and the decrease in the principal payment rate, despite having a legal final maturity date of May 17, 2055. The model-implied rating of the class A-2 notes is 'Asf'; however, given a legal final maturity date that is more than seven years away, Fitch's rating criteria allow rating tolerance of up to two categories for surveillance for maturity stress failure to be applied up to 'AAsf' if a tranche is currently rated 'AAsf' or above and passes the 'Asf' maturity stress. The Negative Rating Outlook on this class reflects the possibility of further negative rating pressure in the next one to two years, if the remaining term continues to increase or if the principal payment rate remains low.

SLC 2009-3 and SLC 2010-1: The class A notes in both transactions passed all credit and maturity stresses and are affirmed at 'AAAsf'/Outlook Negative. The Negative Rating Outlooks are due to the Outlook assigned to the U.S. sovereign IDR.

KEY RATING DRIVERS

U.S. Sovereign Risk: The trust collateral comprises 100% 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. The U.S. sovereign rating is currently 'AAA'/Outlook Negative.

Collateral Performance: Based on transaction-specific performance to date, Fitch assumes a cumulative default rate of 13.00%, 24.25%, 23.25% and 30.50% under the base case scenario and a default rate of 39.00%, 72.75%, 69.75% and 91.50% under the 'AAA' credit stress scenario for SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively. Fitch is maintaining its sustainable constant default rate (sCDR) at 2.0%, 4.0%, 3.0% and 4.0% for SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively, in cash flow modeling. Fitch is also maintaining its sustainable constant prepayment rate (sCPR; voluntary and involuntary prepayments) at 6.0%, 8.0% and 9.0% for SLC 2005-2, 2009-3 and 2010-1, respectively, and revising its sCPR to 9.0% for SLC 2009-1. Fitch applies the standard default timing curve in its credit stress cash flow analysis. The claim reject rate is assumed to be 0.25% in the base case and 2.0% in the 'AAA' case for all four transactions.

The TTM levels of deferment, forbearance and income-based repayment (IBR; prior to adjustment) are 2.93%, 9.01% and 17.10% for SLC 2005-2; 5.95%, 19.17% and 27.34% for SLC 2009-1; 5.34%, 14.39% and 24.75% for SLC 2009-3; and 5.46%, 14.67% and 32.31% for SLC 2010-1. These assumptions are used as the starting points in cash flow modeling, and subsequent declines or increases in the above assumptions are modeled as per criteria. The borrower benefit is assumed to be approximately 0.22%, 0.15%, 0.10% and 0.12% for SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively, based on information provided by the sponsor.

Basis and Interest Rate Risk: Basis risk for these transactions arises from any rate and reset frequency mismatch between interest rate indices for Special Allowance Payments (SAP) and the securities. As of the most recent distribution dates, 99.64%, 92.73%, 99.72% and 96.32% of the student loans in SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively, are indexed to LIBOR, and the balance of the loans is indexed to the 91-day T-bill rate. All the notes in the four transactions are indexed to three-month LIBOR. Fitch applies its standard basis and interest rate stresses to the transactions as per criteria.

Payment Structure: Credit enhancement (CE) is provided by overcollateralization (OC), excess spread, and for the class A notes of SLC 2005-2, subordination. As of the most recent distribution dates, the senior parity ratio (including the reserve) is 105.15% (4.90% CE) for SLC 2005-2. The total parity ratios are 100.64% (0.63% CE), 112.52% (11.12% CE), 108.04% (7.44% CE) and 216.79% (53.87% CE) for SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively.

Liquidity Support: Liquidity support is provided by a reserve account currently sized at their floors of $1,515,458, $905,785, $2,095,557 and $1,200,450 for SLC 2005-2, 2009-1, 2009-3 and 2010-1, respectively. The transactions will continue to release cash as long as the total parity is 100.00%, 111.11% and 107.53% for SLC 2005-2, 2009-1 and 2009-3, respectively. SLC 2010-1 will not release cash until the notes are paid in full.

Operational Capabilities: SLC Trusts are the securitizations of The Student Loan Corporation, now a subsidiary of Discover Bank. Navient purchased the SLC Trust certificates and assumed servicing responsibilities in December 2010. Discover Bank serves as master servicer, while day-to-day servicing is provided by Navient Solutions, LLC. Fitch believes Navient to be an acceptable servicer, due to its extensive track record as one of the largest servicers of FFELP loans.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

'AAAsf' rated tranches of most FFELP securitizations will likely move in tandem with the U.S. sovereign rating given the strong linkage to the U.S. sovereign, by nature of the reinsurance provided by the Department of Education. Aside from the U.S. sovereign rating, defaults, basis risk and loan extension risk account for the majority of the risk embedded in FFELP student loan transactions.

This section provides insight into the model-implied sensitivities the transaction faces when one assumption is modified, while holding others equal. Fitch conducts credit and maturity stress sensitivity analysis by increasing or decreasing key assumptions by 25% and 50% over the base case. The credit stress sensitivity is viewed by stressing both the base case default rate and the basis spread. The maturity stress sensitivity is viewed by stressing remaining term, IBR usage and prepayments. The results below should only be considered as one potential outcome, as the transactions are exposed to multiple dynamic risk factors. It should not be used as an indicator of possible future performance.

SLC Student Loan Trust 2005-2

Current Ratings: class A 'AAAsf'; class B 'Asf';

Current Model-Implied Ratings: class A 'AAAsf'; class B 'AAAsf'.

Credit Stress Rating Sensitivity

Default increase 25%: class A 'AAAsf'; class B 'AAAsf';

Default increase 50%: class A 'AAAsf'; class B 'AAAsf';

Basis Spread increase 0.25%: class A 'AAAsf'; class B 'AAAsf';

Basis Spread increase 0.50%: class A 'AAAsf'; class B 'Asf'.

Maturity Stress Rating Sensitivity

CPR decrease 25%: class A 'AAAsf'; class B 'AAAsf';

CPR decrease 50%: class A 'AAAsf'; class B 'AAAsf';

IBR Usage increase 25%: class A 'AAAsf'; class B 'AAAsf';

IBR Usage increase 50%: class A 'AAAsf'; class B 'AAsf';

Remaining Term increase 25%: class A 'AAsf'; class B 'Asf';

Remaining Term increase 50%: class A 'CCCsf'; class B 'CCCsf'.

SLC Student Loan Trust 2009-1

Current Rating: class A 'AAAsf';

Current Model-Implied Rating: class A 'AAAsf' (Credit Stress) / 'Asf' (Maturity Stress).

Credit Stress Rating Sensitivity

Default increase 25%: class A 'AAAsf';

Default increase 50%: class A 'AAAsf';

Basis Spread increase 0.25%: class A 'AAAsf';

Basis Spread increase 0.50%: class A 'AAAsf'.

Maturity Stress Rating Sensitivity

CPR decrease 25%: class A 'BBBsf';

CPR decrease 50%: class A 'BBsf';

IBR Usage increase 25%: class A 'Asf';

IBR Usage increase 50%: class A 'Asf';

Remaining Term increase 25%: class A 'Asf';

Remaining Term increase 50%: class A 'BBBsf'.

SLC Student Loan Trust 2009-3

Current Rating: class A 'AAAsf';

Current Model-Implied Rating: class A 'AAAsf'.

Credit Stress Rating Sensitivity

Default increase 25%: class A 'AAAsf';

Default increase 50%: class A 'AAAsf';

Basis Spread increase 0.25%: class A 'AAAsf';

Basis Spread increase 0.50%: class A 'AAAsf'.

Maturity Stress Rating Sensitivity

CPR decrease 25%: class A 'AAAsf';

CPR decrease 50%: class A 'AAAsf';

IBR Usage increase 25%: class A 'AAAsf';

IBR Usage increase 50%: class A 'AAAsf';

Remaining Term increase 25%: class A 'AAsf';

Remaining Term increase 50%: class A 'CCCsf'.

SLC Student Loan Trust 2010-1

Current Rating: class A 'AAAsf';

Current Model-Implied Rating: class A 'AAAsf'.

Credit Stress Rating Sensitivity

Default increase 25%: class A 'AAAsf';

Default increase 50%: class A 'AAAsf';

Basis Spread increase 0.25%: class A 'AAAsf';

Basis Spread increase 0.50%: class A 'AAAsf'.

Maturity Stress Rating Sensitivity

CPR decrease 25%: class A 'AAAsf';

CPR decrease 50%: class A 'AAAsf';

IBR Usage increase 25%: class A 'AAAsf';

IBR Usage increase 50%: class A 'AAAsf';

Remaining Term increase 25%: class A 'AAAsf';

Remaining Term increase 50%: class A 'AAAsf'.

Fitch has revised its global economic outlook forecasts as a result of the war in Ukraine and related economic sanctions. Downside risks have increased and Fitch published, 'What a Stagflation Scenario Would Mean for Global Structured Finance', an assessment of the potential rating and asset performance impact of a plausible, albeit worse than expected, adverse stagflation scenario. Fitch expects the FFELP student loan ABS sector to experience mild to modest asset performance deterioration, indicating some Outlook changes (between 5% and 20% of outstanding ratings). Asset performance under this adverse scenario is expected to be more modest than the most severe sensitivity scenario below. The severity and duration of the macroeconomic disruption and thus portfolio performance is uncertain and is balanced by a strong labor market and the build-up of household savings during the pandemic, which will provide some support in the near term to households faced with falling real incomes.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

SLC Student Loan Trust 2005-2

No upgrade credit stress sensitivity or maturity stress sensitivity is provided for the class A and class B notes, as they are already at their highest possible model-implied ratings.

SLC Student Loan Trust 2009-1

No upgrade credit stress sensitivity is provided for the class A notes, as they are already at their highest possible model-implied rating.

Maturity Stress Sensitivity

CPR increase 25%: class A 'AAsf';

IBR usage decrease 25%: class A 'Asf';

Remaining term decrease 25%: class A 'AAsf'.

SLC Student Loan Trust 2009-3

No upgrade credit stress sensitivity or maturity stress sensitivity is provided for the class A notes, as they are already at their highest possible model-implied rating.

SLC Student Loan Trust 2010-1

No upgrade credit stress sensitivity or maturity stress sensitivity is provided for the class A notes, as they are already at their highest possible model-implied rating.

Best/Worst Case Rating Scenario

International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg.

Additional information is available on www.fitchratings.com

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