New Federal Direct Loan Rules

The One Big Beautiful Bill Act (H.R.1) was signed into law on July 4, 2025. This resulted in major changes to federal direct loan eligibility for students. This page outlines these changes and how they impact St. Thomas undergraduate students.

Unlike previous academic years, federal direct subsidized and unsubsidized loans may be adjusted within the semester based on enrollment changes.

Contact Financial Aid

Inform the Financial Aid Office of Enrollment changes

If you plan to enroll in fewer than 12 credits in either fall or spring semester, you should contact the Financial Aid Office (financialaid@stthomas.edu) via your St. Thomas email account to inform our office of your enrollment plans for the full school year. This will allow our office to better advise you of any impacts to your federal loan eligibility.

Enrollment Definitions

A student's enrollment level during the academic year and each semester can affect federal direct loan eligibility. Here is how St. Thomas defines these enrollment levels and the process of loan adjustment.

Full-time Enrollment

Half-time Enrollment

Less than Full-Time Enrollment

Schedule of Reduction

Full-time Enrollment

In order for an undergraduate student to receive the full amount of their federal direct loan eligibility in a school year, they must be enrolled in at least 24 credits over the course of fall and spring semesters. This includes any J-term and summer enrollment.

Half-time Enrollment

An undergraduate student must be enrolled in at least 6 credits in a semester to be eligible for any amount of federal direct loans for that term.

Less than Full-Time Enrollment

If an undergraduate student is not enrolled full-time (see definition above) for the academic year, their federal direct loans may need to be adjusted. This is referred to as a Schedule of Reduction (SOR) change. A SOR change can happen both before and after the 10th day of classes in the semester.

Schedule of Reduction (SOR)

The SOR change is determined by the number of credits an undergraduate student is enrolled in over the school year divided by the number of credits to be considered full-time (24). This percentage is then multiplied by the student’s maximum yearly loan eligibility to determine the new eligibility. Any potential reductions to loan disbursements will take place during the term of the enrollment change.

Full-time Enrollment

Full-time Enrollment

In order for an undergraduate student to receive the full amount of their federal direct loan eligibility in a school year, they must be enrolled in at least 24 credits over the course of fall and spring semesters. This includes any J-term and summer enrollment.

Half-time Enrollment

Half-time Enrollment

An undergraduate student must be enrolled in at least 6 credits in a semester to be eligible for any amount of federal direct loans for that term.

Less than Full-Time Enrollment

Less than Full-Time Enrollment

If an undergraduate student is not enrolled full-time (see definition above) for the academic year, their federal direct loans may need to be adjusted. This is referred to as a Schedule of Reduction (SOR) change. A SOR change can happen both before and after the 10th day of classes in the semester.

Schedule of Reduction

Schedule of Reduction (SOR)

The SOR change is determined by the number of credits an undergraduate student is enrolled in over the school year divided by the number of credits to be considered full-time (24). This percentage is then multiplied by the student’s maximum yearly loan eligibility to determine the new eligibility. Any potential reductions to loan disbursements will take place during the term of the enrollment change.

Schedule of Reduction Examples

SOR Example - Before Loan Disbursement

A student at Junior credit level is eligible for a $5,500 Federal Direct Subsidized Loan and a $2,000 Federal Direct Unsubsidized Loan for the academic year. This student originally enrolls in 12 credits for fall semester but withdraws from 2 credits before their loan is disbursed. This student intends to enroll in 12 credits for spring semester.

Total credits = 22. This student is eligible for 92% ($5,060 Subsidized / $1,840 Unsubsidized) of their federal loans for the school year. 

Since this change happened before the loan is disbursed, the financial aid office would evenly split the eligibility between fall and spring semesters ($2,530 Subsidized / $920 Unsubsidized each semester). 

 

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SOR Example - After Loan Disbursement

A student at freshman credit level is eligible for a $5,500 Federal Direct Unsubsidized loan. This student completes 12 credits in fall semester but enrolls in 8 credits in spring semester.

Total credits = 20. This student is eligible for 83% ($4,565) of their federal loan eligibility for the academic year.

Since fall semester has already ended, this student received a $2,750 disbursement in fall. Their spring disbursement will now be reduced to $1,815 as this is the amount still remaining ($4565 - $2,750 = $1,815).

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