The ratings assigned to Higher Education Student Assistance Authority's (State of New Jersey) (the authority) $166 million student loan revenue bonds 2002 series A, B, C, and D (2002 bonds) are based on an unconditional, irrevocable municipal bond insurance policy that guarantees payment of scheduled principal and interest provided by MBIA Insurance Corp. (MBIA; 'AAA' insurer financial strength rating). Although the rating is dependent on Standard & Poor's rating of MBIA's financial strength, the underlying transaction is of investment-grade quality, based on the following: Overcollateralization that builds to 102% before the expected peak loss period; A moral obligation provision that requires the State of New Jersey to maintain the debt service reserve fund at its required level of 2.0% of
