Federal Regulations
Federal Loan Schedule of Reduction
The Working Families Tax Cut Act (H.R. 1) (formerly the One Big Beautiful Bill Act) introduced significant changes to federal aid programs scheduled to go into effect July 1, 2026, for students applying for federal aid with the 2026-27 Free Application for Federal Student Aid (FAFSA).
The Free Application for Federal Student Aid (FAFSA) is used to determine eligibility for state and federal grants, scholarships, and loans. The FAFSA can be completed at studentaid.gov. The Landmark College FAFSA school code is 017157.
Changes effective after July 1, 2026.
Enrollment Intensity
Full-Time Academic Year Enrollment: Landmark College Undergraduate Students must take at least 12 credits per semester (at least 24 credits in the academic year) to be considered full-time.
Half-time Enrollment: Students must be enrolled in at least a half-time basis to receive a Federal Direct Loan in a single semester. For Landmark College undergraduate students this at least 6 academic credits.
Less than Full-time Enrollment: Beginning with the 2026-27 Academic Year, Direct Loans for students not enrolled full-time for the entire academic year will need to be adjusted based on the Federal Schedule of Reduction (SOR). Unlike previous academic years, enrollment will now be measured for both the individual term and the academic year. Prior to H.R. 1, enrollment was only measured by terms.
Federal student loans that will be affected by the new loan reduction requirements:
- Federal Subsidized Loans (undergraduate)
- Federal Unsubsidized Loans (undergraduate and graduate)
- Federal Graduate PLUS Loans (graduate – eligible under legacy provisions)
(Federal Parent PLUS Loans are not subject to reduction for less than full-time enrollment.)
Each loan will be reduced separately according to the student’s less-than-full-time enrollment status.
January Term and Summer Terms:
- Classes taken during the January Term will count toward spring enrollment.
- Classes taken during the Summer session will not count toward fall or spring enrollment.
- Summer is considered its own term for federal student loan eligibility and loan reduction.
- Students enrolling in the Summer session will have their loans reduced if they drop from full-time enrollment to less-than-full-time enrollment during the summer term.
Loan Eligibility
Under the new rules of H.R. 1, awards for students enrolled less than full time will be determined as follows:
Schedule of Reduction for less than full-time enrollment:
To determine the less than full-time loan amount, multiply the full-time annual loan eligibility by the reduced annual loan limit percentage calculated in the SOR.
Example 1: SOR Reduction for Planned Part-Time Enrollment
Planned Part-time Enrollment
In this example let’s consider the eligibility for an undergraduate freshman taking 9 credits in the fall semester and 12 credits in the spring semester. As a freshman, their full-time Federal Direct Loan Eligibility is $5,500.
Their annual enrollment would be 21 credits.
Based on the SOR calculation, their reduced annual loan limit percentage would be:
(21/24) x 100 = 88%. Their less than full-time loan eligibility would be:
$5,500 x 88% = $4,840
This means the proportional loan disbursements would be
Fall $2,074 and Spring $2,766
Example 2: SOR Reduction for Unplanned Part-Time Enrollment
In this example we will consider the same undergraduate freshman, but instead of planning to enroll part-time, they instead enroll full-time at 12 credits per semester. In this case, they would start the year with their full-time eligibility for Federal Direct Loans of $5,500.
After the semester started, however, they unexpectedly had to drop a 4-credit fall course after their fall loans had disbursed. This unexpected change in enrollment would result in less than full-time enrollment as a W grade does not count toward full-time enrollment under then new H.R. 1. rules.
This change in enrollment would result in a reduction to the loan they can receive in the spring based on the SOR calculation:
New Academic Year Enrollment – 20 credits
(20/24) x 100 = 83%
Less than Full-Time Loan Eligibility
$5,500 x 83% = $4,565
How this impacts Spring Loan Eligibility:
Since this student already had a full-time loan amount disbursed for the fall ($2,750), the full-time amount must now be subtracted from the new less than full-time annual eligibility.
$4,565 – $2,750 = $1,815
This means that the student in this example would only be eligible for $1,815 in Federal Direct Loans in the spring, due to the change in Fall enrollment to less than full-time. Students should be very careful when making enrollment changes, as a SOR reduction after a loan has disbursed can result in a student receiving substantially less than they were anticipating in subsequent semesters.
Frequently Asked Questions
Students must meet both the per term credit requirement and the per academic year requirement to be considered full-time for Direct Loan Eligibility.
Undergraduate Students:
Full-Time Academic Year Credit Requirement: 24 Credits (12 Credits per term)
At-least Half-Time per Term Credit Requirement: At-least 6 Academic Credits.
W grades do not count towards full-time academic year enrollment and may result in a SOR calculation and adjustment to Direct Loan Eligibility for subsequent semesters.
Parent Plus loans are not reduced based on part-time enrollment. The Schedule of Reduction calculation only applies to Federal student borrowing, not parent borrowing.
SOR adjustments are based on the academic year credit minimum rather than per term. If you complete the full-time academic year credit requirement for your specific program, then you are considered full-time for Federal Direct Loan Eligibility. If you complete less than the academic year credit requirement then your loans are subject to being reduced based on the SOR.
For example, look at an undergraduate student with an academic year full-time enrollment requirement of 24 credits.
Scenario #1 – Typical Enrollment
Fall Enrollment – 12 credits
Spring Enrollment – 12 credits
Academic Year Enrollment – 24 Credits (Full-time)
Scenario #2 – Student drops to 8 credits in Fall, 16 Credits in Spring
Fall Enrollment – 8 credits
Spring Enrollment – 16 Credits
Academic Year Enrollment – 24 Credits
Despite dropping to 8 credits in the fall, this student would still be eligible for Full-Time Federal Direct Loans because they were enrolled in at least 6 credits in the Fall and still completed 24 credits for the year, despite being less than full-time in the Fall. This student would not be subject to a SOR adjustment.
Scenario #3 – Student drops to 8 credits in Fall and Spring
Fall Enrollment – 6 Credits
Spring Enrollment – 6 Credits
Academic Year Enrollment – 16 Credits
In this scenario, the student would be considered less than full-time for the academic year and would be subject to a SOR adjustment:
(12/24) x 100 = 50%
New Undergrad Freshman Academic Year Loan Eligibility – $2,750
Students registered for 4 credits in a single semester will not be eligible to receive an Federal Direct Loans during that semester because they do not meet the at least Half-Time enrollment requirement to borrow Federal Direct Loans.
If you change your enrollment to less than full-time prior to an academic year loan disbursing, LC will adjust your loan according to the SOR and proportionally reschedule your loan between the fall and spring semesters, while assuming you are planning to take 12 credits in the spring.
If you require additional loan funding, you can investigate private credit-based loans.