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Federal Direct Loan Schedule of Reductions (SOR)

What is the Schedule of Reductions (SOR)?

Beginning July 1, 2026, federal regulations require colleges to adjust Federal Direct Loan eligibility based on a student's enrollment level. These changes are part of new federal student aid regulations and apply to all Federal Direct Subsidized and Unsubsidized Loans.

Under the Schedule of Reductions (SOR), students enrolled full-time will be eligible for their full annual loan amount, while students enrolled less than full-time but at least half-time will receive a reduced loan amount based on their enrollment intensity. Students must be enrolled at least half-time to remain eligible for Federal Direct Loans.

Loan Awarding, Monitoring, and Disbursement

Students awarded Federal Direct Loans will initially be offered loan eligibility based on an expectation of full-time enrollment. However, federal regulations require colleges to review enrollment and adjust loan eligibility based on actual enrollment intensity under the Schedule of Reductions (SOR)

Enrollment Review and Loan Adjustments

  • Your approved loan amount may be adjusted to reflect your registered eligible credit hours for the term.
  • Students should not expect immediate or real-time updates to their financial aid awards when schedule changes are made. Financial aid staff must manually review enrollment and update loan eligibility, which may take additional processing time(up to 45 days)
  • Before loan funds are disbursed, the Financial Aid Office will verify your actual enrollment. If you are enrolled less than full-time, your Federal Direct Loan amount will be adjusted according to the federal Schedule of Reductions (SOR).

Student Loan Disbursements

At the time of loan disbursement, eligible credit hours will be evaluated, and loan eligibility will be adjusted based on your actual enrollment level.

The exact reduction will vary based on the student's individual loan eligibility and enrollment level.

Adding Courses After the Term Begins

Adding courses after the add/drop period or enrollment review date may result in an increase to your Federal Direct Loan eligibility for the current term. Any necessary adjustments related to increased enrollment are, subject to federal regulations and available eligibility.

How Enrollment Impacts Your Loan

Your Federal Direct Loan eligibility is determined by the number of eligible credit hours in which you are enrolled. Eligible credit hours must apply toward your declared degree or certificate program and meet Course Program of Study (CPOS) requirements.

Federal Direct Loan eligibility may be adjusted if you:

  • Enroll in fewer than 12 eligible credit hours.
  • Drop or withdraw from classes may affect future payment period eligibility.
  • Do not begin a scheduled course.
  • Enroll in courses that do not apply to your program of study.

Important Information

  • Full-time enrollment is 12 or more eligible credit hours.
  • Half-time enrollment is generally 6 or more eligible credit hours.
  • Students enrolled less than half-time are not eligible for Federal Direct Loans.
  • Loan adjustments may occur during the academic year if enrollment changes.

What Should Students Do?

Students are encouraged to regularly review their schedules and consult with an academic advisor before making enrollment changes. Changes to enrollment can affect current and future financial aid eligibility and may impact loan disbursements.

One Big Beautiful Bill Act (OBBBA)

On July 4, 2025, the One Big Beautiful Bill Act was signed into law, introducing updates to several federal student aid programs.

*******Schedule of Reductions (SOR)- 34 CFR Part 685******

Federal direct loans are prorated (reduced) based on enrollment status if enrolled less than-full-time. These rules, often referred to as the Schedule of Reductions (SOR), mandate that loan amounts are reduced in direct proportion to the student's enrollment status.

These changes may affect your financial aid eligibility. While additional federal guidance is still forthcoming, the following updates are scheduled to take effect on July 1, 2026:

  • Federal Direct Loans: Loan amounts will be adjusted based on enrollment status. Students enrolled in fewer than 12 credit hours may see a reduction in eligibility proportional to their course load.
  • Workforce Pell Program: Pell Grant eligibility will be extended to students enrolled in approved workforce programs, even if they have already earned a bachelor’s degree.
  • Federal Parent PLUS Loans: For new borrowers, loans will be capped at $20,000 per academic year, with a $65,000 aggregate limit per dependent student.
  • Pell Grant: Students whose full cost of attendance is covered by non-federal grants and scholarships may not qualify for a Pell Grant, even if they otherwise meet eligibility criteria.
  • Loan Repayment Options: Federal repayment plans will be streamlined into two options:
    • A new tiered Standard Repayment Plan
    • An income-driven plan known as the Repayment Assistance Plan

We understand that changes to federal policy may raise important questions. Our Financial Aid Office will continue to monitor updates from the U.S. Department of Education. To learn more about these updates, please visit the federal student aid website.

 Changes from 2024-2025

The FAFSA Simplification Act, passed in 2021, aims to make it easier for students to apply for financial aid. These changes will affect the FAFSA form used for the 2024-25 academic year, starting in December 2023. The Act also changed how students qualify for Pell Grants. Here are some resources to help you grasp these updates.

Starting in March 2024, the Department of Education begins sending FAFSAs to schools. While the Financial Aid Office won't confirm receipt until May, you can track your 2024–25 FAFSA status on the Federal Student Aid website


 

SIGNIFICANT CHANGES TO THE 2024-25 FAFSA FORM

The new FAFSA form brings several changes:

  • Questions reduced from 108 to 46.
  • Students can list up to 20 colleges.
  • Separate sections for students, parents, and spouses.
  • Permission required for IRS data transfer.
  • Missing consent may lead to incomplete application.
  • Family size based on tax exemptions.
  • Child support moved to asset section.Demographic questions in student section.
  • Custodial parent defined by financial support.
  • Two-step verification for FSA ID.

Preparing for the 2024-2025 FAFSA Application

Create an FSA ID: Students, spouses, parents, and stepparents, now called contributors, can make their FSA ID at https://studentaid.gov

Application Status:

  • Draft: Incomplete section.
  • In Progress: Completed section but not submitted.
  • In Review: Submitted and processing.
  • Processed: Successfully processed, no further action.
  • Action Required: Further action needed.
  • Closed: Missed federal deadline, cannot submit.

 

 Changes in Calculating Your Aid Eligibility

Understanding Student Aid Index

 
What is the Direct Data Exchange?