Schedule of Reductions

Federal Student Aid Changes with the Reconciliation Bill Explained

Federal Direct Loan Schedule of Reductions (SOR)
Federal Student Aid is changing significantly for students and parents beginning with the 2026-27 aid year, following the passage of the Reconciliation Bill. These changes set new annual and aggregate federal loan limits for both students and parents, require loan proration for less than full-time enrollment and impact eligibility for certain federal loan programs.

Beginning July 1, 2026, Federal Direct Loans will be reduced based on the number of credits in which a student is enrolled/academically engaged. This process is called the Schedule of Reductions (SOR).

With the new Federal Direct Loan SOR requirement, full-time students will receive the full amount of their annual loan offer. If a student is enrolled less than full-time, they will not be eligible to receive the full-time amount of loans offered to them. Instead, the financial aid will calculate the amount of loan funding the student is eligible to receive based on the number of credits in which they are enrolled/academically engaged.

Federal loan eligibility must be prorated based on a student’s enrollment status:

• Students enrolled less than full-time (12+ credits) will have their annual loan limits reduced proportionally based on the percentage of the full-time enrollment.
• At minimum, students need to be enrolled at least half-time per semester to receive any Federal Direct Loan funding.
• For example, a half-time student (6 credits Undergraduate) may receive only 50% of their annual loan limit.
• The Schedule of Reductions (SOR) must consider any enrollment changes occurring after disbursement, including courses that receive a grade of W, F, or I.
• For example, a student who borrows the maximum student loans, enrolls in 12 credits fall and 12 spring, withdraws from 6 credits fall, will require their spring student loans to be reduced for the change in their total annual enrollment.
• This change affects undergraduate borrowers and replaces prior practice where less than full-time enrollment might not have reduced loan eligibility the same way. 

Please note that amounts offered to you could differ from the annual amounts based on your Cost of Attendance and total lifetime borrowing history. To view your total lifetime borrowing history, log into your studentaid.gov account.