Less Than Full-Time Loan Adjustments: Schedule of Reductions (SOR)

Key Takeaway: Your financial aid offer displays Federal Direct Loans assuming Full-Time enrollment (12+ required credits). If you enroll in fewer than 12 required degree credits, your loan disbursement will automatically decrease proportionally. Disbursement occurs in Week 2 of the term after the Add/Drop period has ended.

1. What is the Schedule of Reductions (SOR)?

Starting with the 2026–2027 award year, federal regulations mandate significant updates to the Federal Direct Loan program. One impactful change is the Schedule of Reductions (SOR), which requires federal student loan amounts to be prorated based on a student’s exact enrollment intensity (registered credit hours that are required for a student’s degree completion). Full-time students (12 or more required credits) will receive a full loan amount, but students enrolled less than full-time (6-11 required credits) will receive a proportional total loan amount.

Under prior rules, students enrolled at least half-time (6+ required credits) received 100% of their offered federal loan eligibility for that term. Under the new federal Schedule of Reductions, Federal Direct Subsidized, Unsubsidized, and Graduate PLUS Loans are adjusted based on your required credits. While you must still be enrolled at least half-time to receive any federal loan funds, taking fewer than 12 required credits will reduce your available loan disbursement.

Note for Full-Time Students: If you enroll in 12 or more degree-required credits each term, your federal loan eligibility will not change. This policy only affects students enrolled in fewer than 12 required credits.

2. Degree Audit & Course Applicability

In compliance with federal and state regulations, only courses that directly fulfill degree requirements for your program count toward your eligibility for federal and state aid, including federal loans.

• Required Credits Only: Non-required courses that fall outside your Degree Audit cannot be used to calculate federal or state financial aid eligibility.
• Course Substitutions (Critical Deadline): If you are planning to substitute a non-required class to fulfill a degree requirement, you must obtain department approval and submit a Course Waive/Sub E-Form (available on the Enrollment Services Inside Page) to Enrollment Services no later than the start of the term (September 12th for Fall 2026). We cannot retroactively increase your current term loan amount for courses or substitutions approved after disbursement, so early submission prior to the start of the term is essential.

3. How Enrollment Intensity Reduces Your Loans

At ArtCenter, Full-Time enrollment for both Undergraduate and Graduate students is at least 12 required credits per term, and a total of at least 24 credit hours per year (two semesters).

SOR calculation steps:

Step 1: Determine your initial maximum offer for each loan for the year

Step 2: Divide your total required credits (x) by total full-time credits (24) to calculate your SOR percentage

• If you are currently enrolled, use your actual required credits for the current term. ArtCenter will assume 12 required credits for future terms you are not registered for (e.g., Spring 2027).

Step 3: Multiply your maximum loan offer by your SOR percentage to calculate your adjusted maximum loan for the year

Step 4: Split the adjusted loan amoun proportionally based on credits between the terms

Maryam is a 7th term (Senior) student eligible for $7,500 of Unsubsidized Loan

Maryam will be enrolled in 6 required credits for the Fall semester and estimates she will enroll in 12 required credits in Spring 2027, for a total of 18 credits.

Your loan proration for the term can also be roughly estimated by dividing your registered required credit count for the term by 12, as seen in the table below, however, actual loan amounts may vary due to rounding, remaining loan eligibility, and other individual factors.

Lite Term Tuition Proration: If you apply and are approved for a Lite Term through Enrollment Services, your institutional tuition charges are prorated accordingly. However, please remember that your federal/state financial aid will also be prorated based on your degree-required credits.

4. Important Note Regarding Your Tuition Bill & 'Pending Aid'

Please be aware of how pending aid appears on your student financial statement:

• Pre-Disbursement Statement: Your billing statement on Inside will show estimated full-time loan amounts as pending aid through registration and the start of classes.

• Disbursement Period: Your loan amount will officially adjust at the time of disbursement (typically late Week 2) based on your active required credits at that time. Please be sure to review your final bill after disbursement to determine if you owe an additional balance.

• Important Note on Schedule Changes: Adding or dropping courses after your loan disburses can significantly impact your financial aid. Federal loans cannot be increased for classes added post-disbursement. Conversely, if you drop a required class (with a "W" grade) after disbursement, the reduction in credits must be accounted for in the calculation of your next term’s loan eligibility. For example, dropping a Fall 2026 course post-disbursement could mean reducing your Spring 2027 loan eligibility, leaving you with an unexpected out-of-pocket balance for Spring. Always contact Financial Aid before making schedule changes post-disbursement so you know exactly how your financial aid will be impacted.

Frequently Asked Questions (FAQ)

Why isn't my full credit load counting toward my financial aid?
Federal and state aid can only be awarded for courses that apply directly to your degree program. If you are enrolled in 12 total credits, but 3 of those credits do not meet a degree requirement, your federal and state aid will be calculated using 9 required credits (75% intensity).

How can I use an unrequired course to fulfill a degree requirement?
You must obtain department approval and submit a Course Waive/Sub E-Form (available on the Enrollment Services Inside Page) to Enrollment Services no later than the first day of the term. Once approved, the substituted course will be recognized in your Degree Audit as a required credit.

What happens if I drop a class before disbursement?
If you drop a course before aid disburses, your loan eligibility will automatically be recalculated based on your active required credit intensity at the time of disbursement.

What happens if I drop or add a class after disbursement?
Federal loans cannot be increased for classes added post-disbursement. If you drop a required class (with a "W" grade) after disbursement, any required loan adjustments may have to be applied to your next term's aid. For example, dropping a Fall 2026 course post-disbursement could mean reducing your Spring 2027 loan eligibility, leaving you with an unexpected out-of-pocket balance for Spring. Always contact Financial Aid before making schedule changes post-disbursement so you know exactly how your financial aid will be impacted.

Does the Schedule of Reductions apply to institutional scholarships or Pell Grants?
Institutional scholarships are awarded based on your total registered credits, rather than required credits, as documented in the ArtCenter Scholarship and Grant Policies on the Financial Aid Inside page. Federal Pell Grants have operated under enrollment intensity rules since 2024–2025. The Schedule of Reductions specifically targets Federal Direct Subsidized, Unsubsidized, and Graduate PLUS Loans beginning in 2026-2027.

Need Help?

If you are considering enrolling part-time or have questions about how your registration and Degree Audit will affect your bill, please reach out to us:

Office of Financial Aid

• Email: finaid@artcenter.edu

• Phone: (626) 396-2215

• Location: Hillside, Room 264