Under the One Big Beautiful Bill Act (OBBBA/OB3), for Direct Loans packaged and originated for the 2026-27 academic year (AY), a student’s annual loan limit must be adjusted for less than full time enrollment (known as the Schedule of Reductions, or SOR). This requirement applies to all undergraduate, graduate, and professional student Direct Loan borrowers for Direct Subsidized Loans, Direct Unsubsidized Loans, and graduate PLUS Loans for legacy borrowers. Parent PLUS Loans are not subject to these adjustments.
- Applies to all academic program types, except nonterm and clock-hour programs.
- Must be applied to scheduled academic years (SAYs) and borrower-based academic years (BBAYs).
- Effective with the 2026-27 academic year. This includes summer headers attached to the 2026-27 academic year, even if summer starts before July 1, 2026.
- Must be applied to all students, regardless of a student’s interim exception (also known as limited exception, legacy, or grandfathered) status.
- Applies to all graduate and undergraduate student loans (does not apply to parent PLUS).
- Students must be enrolled at least half-time and meet all other general eligibility and program-specific requirements in order to receive a Direct Loan disbursement.
- Schools are permitted to package and originate Direct Loans based on an assumption that the student will enroll on a full-time basis, unless the school has information that indicates the student will enroll otherwise. This is new for 2026-27.
- A student’s enrollment status over the entire academic year (including summer) must be evaluated at the time of each disbursement, unless the school has a policy to evaluate more frequently.
- Schools must use the enrollment level reported for NSLDS Enrollment Reporting when establishing the number of credit hours enrolled for the SOR calculation.
- If there is no adjustment for less-than-full-time enrollment, the substantially equal disbursement rule in 685.303(d)(5) stands. If the SOR applies and the loan is adjusted for less-than-full-time enrollment, disbursements can be made using the equal disbursement method or the proportional disbursement method. When using the proportional method, disbursements can be unequal. COD will accept loan originations with unequal disbursements between terms.
- As a general rule, students enrolled in a single semester may not receive more than half of their full-time annual loan limit.
- For legacy graduate PLUS borrowers, the cost of attendance (COA) must first be recalculated based on less-than-full-time enrollment and remaining loan eligibility. That recalculated amount is the starting figure to which the SOR is applied.
- Under 668.3, an undergraduate academic year must contain a minimum of 24 semester or trimester credit hours or 36 quarter credit hours. This means full-time enrollment for each term, including summer, is 12 credit hours. Graduate programs set their own minimum number of credit hours in an academic year, and full-time can be defined differently for summer.
Step 1: Determine borrower’s initial maximum for each loan type for their loan period
Step 2: Divide total enrolled credits by total full-time credits for academic year:
Step 3: Apply equal disbursements over terms in academic year or apply proportional disbursement method to calculate loan amount per term
RPI Schedule of Reduction Policy
In cases where a student is initially enrolled full-time for a given term and subsequently reduces their enrollment to below 12 credit hours due to a course drop or withdrawal, the Institute will adjust the student’s loan eligibility within the same term in which the change in enrollment occurs. Any resulting excess loan funds will be returned in accordance with applicable regulations. This approach preserves the student’s remaining scheduled disbursements for subsequent terms within the same academic year.
