One Big Beautiful Bill Act: Course Drops & Withdrawals
Dropping Classes May Affect Your Future Federal Student Loan Eligibility
Beginning with the 2026-2027 academic year, federal law requires schools to reduce annual federal student loan eligibility for students who attend less than full-time. This requirement is known as the Schedule of Reductions (SOR).
Under these new federal rules, your annual loan eligibility is tied to your enrollment level. If you drop classes, withdraw from courses, or otherwise reduce your enrollment, the amount of federal student loans you are eligible to receive for the academic year may decrease.
What Does This Mean for Me?
If you change your enrollment after receiving a fall loan disbursement, your previously disbursed loan funds generally will not be reduced solely because of the Schedule of Reductions. However, your remaining loan eligibility for the academic year may be impacted, and future loan disbursements, including spring semester disbursements, may need to be reduced or canceled.
Before dropping or withdrawing from a course, we encourage you to review how the change could affect your future financial aid eligibility with your academic advisor and UM Financial Aid
What Happens If I Drop a Class?
Depending on your enrollment level:
- Future federal loan disbursements may be reduced.
- You may become ineligible for additional federal loans if you fall below half-time enrollment.
- Other federal, state, or institutional aid programs may also be affected.
- Changes made during the fall semester could impact the amount of loan funding available for the spring semester.
What if I withdraw from the entire semester?
A complete withdrawal is different from dropping one or more classes. Federal Return of Title IV Funds (R2T4) regulations may require a recalculation of your financial aid based on your withdrawal date, and you could owe money back to the University. Future loan disbursements may also be canceled. Contact Student Financial Services before withdrawing whenever possible.
Frequently Asked Questions
I dropped from 12 credits to 9 credits after my fall loans were disbursed. Will I owe money back immediately?
Not necessarily. A reduction in enrollment after a loan disbursement does not automatically mean you must repay previously disbursed loan funds. However, your remaining eligibility for future loan disbursements may be reduced.
Can dropping a class affect my spring loans?
Yes. Because the Schedule of Reductions applies to annual loan eligibility, reduced enrollment during the academic year may affect the amount of federal loan funding available for future terms.
What if I drop below half-time enrollment?
Students enrolled less than half-time are generally not eligible to receive Direct Loan disbursements.