Morningstar DBRS Finalizes Provisional Credit Ratings on Nelnet Student Loan Trust 2025-A

DBRS, Inc. (Morningstar DBRS) finalized its provisional credit ratings on the classes of notes issued by Nelnet Student Loan Trust 2025-A (the Issuer) as follows:

-- $424,000,000 Fixed Rate Class A-1A Notes rated AAA (sf)
-- $424,000,000 Floating Rate Class A-1B Notes rated AAA (sf)
-- $86,000,000 Fixed Rate Class B Notes rated AA (sf)
-- $32,000,000 Fixed Rate Class C Notes rated A (sf)
-- $64,000,000 Fixed Rate Class D Notes rated BBB (low) (sf)

CREDIT RATING RATIONALE/DESCRIPTION

The credit ratings are based on Morningstar DBRS' review of the following analytical considerations:

(1) The transaction assumptions consider Morningstar DBRS's baseline macroeconomic scenarios for rated sovereign economies, available in its commentary "Baseline Macroeconomic Scenarios for Rated Sovereigns: March 2025 Update," published on March 26, 2025. These baseline macroeconomic scenarios replace Morningstar DBRS's moderate and adverse Coronavirus Disease (COVID-19) pandemic scenarios, which were first published in April 2020.

(2) The credit ratings on the Class A Notes, Class B Notes, Class C, Notes and Class D Notes address the timely payment of interest and the ultimate repayment of principal by the related final maturity date in accordance with the transaction documents.

(3) The transaction's form and sufficiency of available credit enhancement.
-- OC, note subordination, reserve account amounts, and excess spread create credit enhancement levels that are commensurate with the credit ratings.

(4) Transaction cash flows are sufficient to repay investors under all AAA (sf), AA (sf), A (sf), and BBB (low) (sf) stress scenarios in accordance with the terms of the Nelnet 2025-A transaction documents.

(5) The quality and credit characteristics of the student loan borrowers.

(6) The ability of the Servicer to perform collections on the collateral pool and other required activities.
-- Morningstar DBRS has performed an operational review of Nelnet Servicing, LLC (dba Firstmark Services) and considers the entity to be an acceptable servicer of private student loans.

(7) The legal structure and legal opinions that address the true sale of the student loans, the nonconsolidation of the trust, that the trust has a valid first-priority security interest in the assets, and the consistency with the "Morningstar DBRS Legal Criteria for U.S. Structured Finance."

Morningstar DBRS' credit ratings on the securities referenced herein address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations for each of the rated notes are the related Noteholders' Interest Distribution Amount and the related Outstanding Principal Balance.

Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction documents that are not financial obligations. For example, the associated contractual payment obligation that is not a financial obligation for each of the rated notes is the related interest on any unpaid Noteholders' Interest Distribution Amount.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS

There were no Environmental/Social/Governance factor(s) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (August 13, 2024) https://dbrs.morningstar.com/research/437781.

Notes:
All figures are in US dollars unless otherwise noted.

The principal methodology applicable to the credit ratings is Rating U.S. Private Student Loan Securitizations (November 12, 2024) https://dbrs.morningstar.com/research/442835.

Other methodologies referenced in this transaction are listed at the end of this press release.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

DBRS, Inc.
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New York, NY 10005 USA
Tel. +1 212 806-3277

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

Rating U.S. Structured Finance Transactions (March 10, 2025)
https://dbrs.morningstar.com/research/449616

Operational Risk Assessment for U.S. ABS Originators and Servicers (December 05, 2024)
https://dbrs.morningstar.com/research/444162

Legal Criteria for U.S. Structured Finance (December 03, 2024)
https://dbrs.morningstar.com/research/444064

Interest Rate Stresses for U.S. Structured Finance Transactions (February 26, 2024)
https://dbrs.morningstar.com/research/428623

A description of how Morningstar DBRS analyses structured finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/417279.

For more information on this credit or on this industry, visit dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.