Changes to Federal Financial Aid and Student Loans

Big changes are coming to federal financial aid and student loans beginning in Fall 2026.

Federal student loan eligibility and limits have changed under the One Big Beautiful Bill Act (OB3). These changes will affect how much aid you can receive and how your enrollment status impacts your eligibility. We’ve broken it down here to help you understand what you need to know. You can also find information on ACC’s Student Loans webpage.

Changes to Federal Loan Availability and Annual Limits

The OB3 reduces the amount of federal loan(s) a student may borrow for an award year under new rules called Schedule of Reductions (SOR). Students enrolled in classes on a less than full-time basis during that award year will see a reduction in how much they will be permitted to borrow in Federal Direct Student Loans. For federal student loan purposes, full-time enrollment is defined as 24 or more credit hours per award year. Additionally, full-time enrollment in a single semester is defined as 12 or more credit hours. Students taking under 6 credits will not be eligible for federal loans.

What is Schedule of Reductions (SOR)?

Your individual annual loan limit is offered to you on your financial aid offer for Fall 2026 and Spring 2027 based on a full-time enrollment status for each semester. New rules under SOR require that schools recalculate and reduce a student’s annual loan limit to a new maximum annual loan limit if a student enrolls in fewer than 24 credit hours in the same financial aid year, between August and July. The reduction of the loans will be proportional to the number of credits the student enrolls in out of the minimum of 24 credits for the year. So, the fewer credit you take the less money you get for the year. If you drop or withdraw from courses, you are then enrolled in fewer credit hours and the amount of loans offered will be reduced.

How does SOR work?

On the day that your loans pay into your account for the semester, the total credits you are registered for that count toward your degree will be reviewed. If you are enrolled in fewer than 12 credit hours on the day of disbursement, the loan will be reduced proportionately and pay out at the reduced rate. 

What happens if you DROP or WITHDRAW from a course?

Dropping a course means you remove it from your schedule before the official drop / add deadline. Dropped courses do NOT appear on your transcript.

Withdrawing from a course happens after the drop / add deadline. You receive a grade of "W" on your transcript. The "W" does NOT affect your GPA, but it does affect your financial aid.

SOR Consequences of dropping or withdrawing from a course

Before your loans pay:

• Your enrollment status is recalculated immediately
• Your loan amount is reduced to match your new (lower) enrollment level

After your loans pay:

• ACC must recalculate your annual maximum loan eligibility based on your new enrollment
• You may lose a portion of your next semester’s loans if your enrollment the next semester does not make up the credits
  Example: A student’s Fall 2026 loans disbursed based on 12 credit hours of enrollment, but the student withdraws from a 3-credit hour course during the semester.
  • If the student enrolls in 12 credit hours in Spring 2027, the total credits to be used to calculate the student’s Spring 2027 loan eligibility will be reduced to 9 and student’s total credits for 2026-2027 will be 21 because of the withdrawal.
  • If the student enrolls in 15 credit hours in Spring 2027, the total credits to be used to calculate the student’s Spring 2027 loan eligibility will be 12 and the student’s total credits for 2026-2027 will be 24 even with the withdrawal.
• In some cases, depending on your enrollment levels in both semesters, the loan disbursement for the next semester may be cancelled entirely
  Example: A student’s Fall 2026 loans paid out based on 6 credit hours of enrollment but the student drops from a 3-credit hour course before the drop deadline for that course.
  • If the student enrolls in 6 credit hours in Spring 2027, the total credits to be used to calculate the student’s Spring 2027 loan eligibility will be reduced to 3 and student’s total credits for 2026-2027 will be 6 because of the withdrawal. At 3 credits in Spring 2027, the student will not be eligible for student loans. 

Examples of Student Loan Impact

Dependent Freshman

Independent Freshman

Impact of Dropping / Withdrawing from a Class / Classes

Full-Time / No Credits Dropped or Withdrawn

Full-Time with Courses Dropped or Withdrawn

Part-Time Eligible Students with Courses Dropped or Withdrawn

Tips to Protect your Financial Aid

• Talk to the Financial Aid Office BEFORE dropping or withdrawing from any classes. This is especially important if your financial aid funds have already paid out.
• Understand your enrollment status and how it will affect your financial aid amounts each semester
• Do not ignore your student account balance
• Plan your courses carefully and consider speaking with your Academic Advisor to help make the best, most informed decisions. Dropping or withdrawing from classes has consequences for your current and future financial aid eligibility.

We want to help you! Let us know if you have questions or need clarity on your aid award or how student loans work. Visit our webpage, stop by our office at ACC’s Littleton Campus (M2330), call us at 303.797.5663, or email us at financialaid [at] arapahoe [dot] edu. You’re not alone.

*This information is subject to change as additional information and guidance is released.