Under the One Big Beautiful Bill Act (OBBBA/OB3/Working Families Tax Cuts Act), for Direct Loans packaged and originated beginning with 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 students who are 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.

The regulatory text for 34 CFR 685.203(m)(1) in the May 1, 2026, Federal Register reads as follows:

“(1) Less Than Full-Time Enrollment. Notwithstanding any provision of 34 CFR parts 682 or 685, in any case in which a student is enrolled in an eligible program (except for a non-term program) at an institution on a less than a full-time basis during any academic year, the amount of any Direct Loan that student may borrow for an academic year or its equivalent shall be reduced in direct proportion to the degree to which that student is not so enrolled on a full-time basis, as of the date the institution determined the student’s eligibility for the disbursement in accordance with 34 CFR 668.164(b)(3), rounded to the nearest whole percentage point, as follows:

(i) Periods of Enrollment that are Less than a Full Academic Year. For a period of enrollment of less than an academic year as defined under 668.3, the institution must calculate the Direct Loan eligibility that student may borrow for the term in which the borrower is enrolled, or its equivalent, in direct proportion to the degree to which that student is not so enrolled on a full-time basis for that term.

(A) The institution shall first determine the amount of the academic year loan limit under this section that the term represents.

(B) The institution shall then determine the borrower’s eligibility for a disbursement of a Direct Loan for the term, in accordance with 34 CFR 668.164(b)(3).

(C) The institution shall then reduce the borrower’s Direct Loan amount based on less than full-time enrollment for that term at that institution, as follows:

(Number of credit hours enrolled for the term / number of credit hours considered full time for that term for the program of study) x 100 = reduced annual loan limit percentage "

UNA PROCEDURE IN ACCORDANCE WITH THE ABOVE POLICY:

The following are the procedures the University of North Alabama’s Student Financial Aid Office shall adhere to in regards to the policies mandated from the OB3, specifically in the regulatory text for 34 CFR 685.203(M)(1).

Schedule of Reduction (SOR): For federal loan purposes, students are expected to be enrolled full-time.  For undergraduate students, 12 hours is considered full-time, and for graduate students, 9 hours is considered full-time. If students are not enrolled in full-time course loads each semester, federal loans will be adjusted as follows:

Beginning in the summer prior to the fall semester beginning, the Office of Student Financial Aid will begin reviewing student accounts to ensure that if a student has accepted the full amount of their loan offers for the upcoming academic year, the student is also enrolled in full-time hours. As stated above, for undergraduate students, 12 hours each semester is considered full-time; therefore, the following formula will be used, given to use by the Department of Education, to find the percentage of each loan that a student is eligible for:

(Number of credit hours enrolled for the term / number of credit hours considered full time for that term for the program of study) x 100 = reduced annual loan limit percentage

Since accounts are reviewed before each disbursement, our office will leave the “assumed” Spring hours at 12 for undergraduate students, and 9 for graduate students until we begin reviewing accounts before the spring semester and any spring disbursements. This will occur while we are reviewing the fall enrollment and loan amounts. Each disbursement is reviewed separately from the time we begin reviewing them until the Freeze Date for each semester (which takes place the day after Add/Drop ends each semester). It is important to note that each loan has its own proration schedule – both the subsidized and unsubsidized loans will be prorated separately, as will any Graduate PLUS loans that a student may be eligible to receive.

IF AT ANY POINT DURING THIS REVIEW PERIOD, THE STUDENT’S FALL ENROLLMENT REDUCES, THE FALL DISBURSEMENT WILL ALSO BE REDUCED TO REFLECT THIS CHANGE. IF ANY POINT THE ENROLLMENT IS REDUCED AFTER THIS FREEZE DATE, THE STUDENT'S SUBSEQUENT DISBURSEMENT WILL BE IMPACTED.

The above information means, if a student is enrolled in 12 hours for fall and withdraws from a 3-hour course, bringing their total fall enrollment to 9 hours, their spring disbursement will have to be reduced by those 3 credit hours since the fall disbursement is now considered an “overpayment.” 

***THE ONLY EXCEPTION TO THIS REDUCTION WILL BE IF THE SPRING ENROLLMENT EXCEEDS FULL TIME TO MAKE UP THE HOURS THAT WERE WITHDRAWN, SO THAT THE TOTAL ENROLLMENT FOR THE ACADEMIC YEAR (FALL/SPRING) TOTALS 24 CREDIT HOURS***

For the fall semester, the review period will begin in late July ahead of the fall semester and end on the Freeze Date for the fall semester.

Examples for Fall Enrollment Reviews/Changes: The Fall 2026 semester begins on August 19, 2026 and the Add/Drop period ends on August 26^th. The Freeze date will be August 27^th. 

Student A: Initial enrollment is 12 hours for Fall and (12 hours assumed for spring). On August 22^nd, the student drops one, 3-hour course, leaving them in 9 total hours for fall. Their loan will be reduced immediately for the FALL disbursement to reflect this change.

Student B: Initial enrollment is 12 hours for Fall and (12 hours assumed for Spring). On August 22^nd, the student drops one 3-hour course, but also signs up for another 3-hour course in its place. The loan will not be adjusted, as the student remains in 12 total hours for Fall.

Student C: Initial enrollment is 12 hours for Fall and (12 hours assumed for Spring). On September 1st, the student withdraws from one 3-hour course for Fall. A reduction of the Spring loan is necessary. However, the student then adds one Part of Term Two course for Fall, making the enrollment 12 hours again. The Spring disbursement may be adjusted again to reflect this.

Student D: Initial enrollment is 12 hours for Fall and (12 hours assumed for Spring). Student withdraws from one 3-hour course on September 15^th.  The Fall disbursement has already paid. The Spring disbursement must now be reduced to reflect this change

Student E: Initial enrollment is 9 hours for Fall and (12 hours assumed for Spring). Student’s Fall disbursement is reduced to reflect the 9 hours for Fall.

NOTES ABOUT THE SPRING 2027 SEMESTER:

The Office of Student Financial Aid begins Spring-awarding around October for Spring-only (Transfer or New Incoming) students. The amount that is offered in October may not be the same amount that will remain when we begin reviewing awards.

**Please note: in the new regulations outlined in proposed 34 CFR 685.203(m)(1)(i) state that student can NOT receive more than 50% of their annual loan limit in a single semester. The following formula will be used when calculating a student’s potential award for the Spring semester:

(Number of credit hours enrolled for the term / number of credit hours considered full time for that term for the program of study) x 100 = reduced annual loan limit percentage

For the Spring semester, the review period will begin in early December ahead of the Spring semester and end on the Freeze Date for the Spring semester.

Examples for Spring Enrollment Reviews/Changes:

Student A: Initial enrollment is 12 hours for Fall and 12 hours for Spring. On January 8th, the student drops one, 3-hour course, leaving them in 9 hours for Spring. The loan will be reduced immediately for the Spring disbursement to reflect this change.

Student B: Initial enrollment is 12 hours for Fall and 12 for Spring. On January 8th, the student drops one, 3-hour course, but also signs up for another 3-hour course in its place. The loan will not be adjusted, as the student remains in 12 hours for Spring.

Student C: Initial enrollment is 12 hours for Fall and 12 for Spring. On February 1st, the student withdraws from one, 3-hour course for Spring. However, the student then adds one Part of Term Two course for Spring, making the enrollment 12 hours again. The student remains in 12 hours for Spring.

Student D: Initial enrollment is 12 hours for Fall and 12 for Spring. The student withdraws from one, 3-hour course on March 15^th.  The Spring disbursement has already paid. There will be no further action taken on this loan in reduction since it has paid in its entirety and there are no subsequent disbursements to reduce.

Student E: Initial enrollment is 9 hours for Fall and 9 for Spring. Both Fall and Spring disbursements were reduced to reflect the 9 hours in each semester. Student adds one, 3-hour Part of Term Two course for Spring, after the disbursements have paid. The loan MAY be reviewed and increased to reflect that the student ended up in 12 hours (full-time) for Spring.

If you are a student who is beginning at UNA in the Spring 2027 Semester, more details and information regarding how your loan(s) might be affected will be coming soon. Please watch for updates here. Additionally, if you are interested in attending UNA in the Summer 2027 Semester, more information and guidance will be added here as well. 

DECEMBER GRADUATES: Undergraduate and graduate students are subject to loan prorations with these policy changes as well. For more information, please see our Fall Graduate Loan Proration Policy.