Schedule of Reductions

FEDERAL LOAN SCHEDULE OF REDUCTION

Effective Fall 2026

General Information

As a part of the One Big Beautiful Spending Bill, The Schedule of Reductions (SOR) is a federal regulation that requires schools to reduce a student’s annual Federal Direct Loan eligibility for students who are enrolled less than full-time in degree-pursuant coursework.

Federal Direct Subsidized and Unsubsidized Loans are subject to this loan proration.
The parent PLUS loan IS NOT affected by this rule.

Federal Loan Enrollment Requirements and Eligibility

The Department of Education establishes annual Federal Direct Loan limits based on a student’s grade level, dependency status, and enrollment status. Students who are enrolled less than full-time may have reduced annual loan limits under SOR regulations, while students who remain enrolled full-time throughout the academic year generally remain eligible for the maximum annual Federal Direct Loan amount allowed for their grade level and program of study, up to the applicable federal borrowing limits.

Learn more about these loans, including borrowing limits, by visiting our Subsidized and Unsubsidized Borrowing Limits webpages.

Changes in enrollment may affect:

• Current semester eligibility

• Future loan disbursements

• Overall financial aid eligibility

• Federal student loan annual borrowing limits

It’s important to know that if students enroll less than full-time in degree-pursuant coursework, withdraw from classes after the semester begins, or fail to begin attendance in courses – resulting in less than full-time enrollment – this regulation may impact your federal loan eligibility for the academic year.

Examples: Impacts of Starting Less Than Full-Time Enrollment

Undergraduate Student Example

A dependent undergraduate junior is eligible for up to $7,500 in annual Federal Direct Loans when enrolled full-time (24 credit hours).

If the student enrolls in only 18 credit hours (6 in the fall and 12 in the spring), their eligibility is reduced to 75% of the annual maximum.

• Full-time enrollment: 24 credit hours = $7,500
• Actual enrollment: 18 credit hours = 75% of full-time enrollment
• Adjusted annual loan eligibility: $5,625

In this example, the student could receive up to $1,875 for the fall semester and $3,750 for the spring semester.

Remember: The fewer credit hours you enroll in, the lower your federal student loan eligibility may be. Students must also meet the minimum half-time enrollment requirementto receive Federal Direct Loans.

Examples: Impacts of of Withdrawal

Undergraduate Student Example

A dependent undergraduate freshman student enrolls in 12 credit hours in the fall and plans to enroll in 12 credit hours in the spring — 24 credit hours total (full time) for the academic year. As a full-time student in a program that does not require summer enrollment, they are eligible to borrow up to $5,500 in Federal Direct Loans (Subsidized and Unsubsidized) for the academic year as a freshman, which is $2,750 per semester.

However, the student withdraws from a 3-credit hour course after the add/drop period receiving a “W”. This reduces their fall enrollment from 12 credits to 9 credits.

Scenario 1: The student enrolls in 12 credits in the spring

The student completes the remaining 9 credits in the fall and enrolls in 12 credits for the spring, for a total of 21 credit hours. This means they qualify for 88% (21 divided by 24) of their annual loan eligibility because they are below full-time enrollment for the academic year.

In this scenario, 88% of their $5,500 annual loan limit would be a total of $4,840. Since the student already received $2,750 in the fall semester, their spring loan would be reduced to $2,090

Scenario 2: The student enrolls in 15 credits in the spring 

The student completes the remaining 9 credits in the fall and enrolls in 15 credits for the spring, for a total of 24 credit hours. This means they qualify for 100% (24 divided by 24) oftheir annual loan eligibility because the student remains enrolled full-time for the academic year.

In this scenario, the student’s spring loan of $2,750 remains unchanged.