The ratings assigned to New Jersey Higher Education Student Assistance Authority's (the authority) $212 million student loan revenue bonds 2003 series A, B, C, D, and E (the 2003 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 enhancement 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
