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Knowledge distillation (KD) transfers capabilities from large language models (LLMs) to smaller students, yet it can fail unpredictably and also underpins model leakage risks. Our analysis revealed several distillation traps: tail noise, off-policy instability, and, most fundamentally, the teacher–student gap, that distort training signals. These traps manifest as overconfident hallucinations, self-correction collapse, and local decoding degradation, causing distillation to fail. Motivated by these findings, we propose a post-hoc calibration method that, to the best of our knowledge, for the first time enables control over a teacher&#39;s distillability via reinforcement fine-tuning (RFT). Our objective combines task utility, KL anchor, and across-tokenizer calibration reward. This makes distillability a practical safety lever for foundation models, connecting robust teacher–student transfer with deployment-aware model protection. Experiments across math, knowledge QA, and instruction-following tasks show that students distilled from distillable calibrated teachers outperform SFT and KD baselines, while undistillable calibrated teachers retain their task performance but cause distilled students to collapse, offering a practical knob for both better KD and model IP protection.

ACL 2026

Distillation Traps and Guards: A Calibration Knob for LLM Distillability

### Welcome to The 63rd Annual Meeting of the Association for Computational Linguistics (ACL 2025)

Message from the General Chair: 
*It is my great pleasure and honor to welcome you to the 63rd Annual Meeting of the Association for Computational Linguistics (ACL 2025), held in beautiful Vienna, Austria, from July 27 to August 1, 2025. ACL2025continues our field’s tradition of excellence in scholarship, innovation, and inclusivity, and I am deeply grateful to the many volunteers who have worked tirelessly to bring this event to life.* 
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ACL 2025

Welcome to The 63rd Annual Meeting of the Association for Computational Linguistics (ACL 2025)

Knowledge distillation (KD) transfers capabilities from large language models (LLMs) to smaller students, yet it can fail unpredictably and also underpins model leakage risks. Our analysis revealed several distillation traps: tail noise, off-policy instability, and, most fundamentally, the teacher–student gap, that distort training signals. These traps manifest as overconfident hallucinations, self-correction collapse, and local decoding degradation, causing distillation to fail. Motivated by these findings, we propose a post-hoc calibration method that, to the best of our knowledge, for the first time enables control over a teacher's distillability via reinforcement fine-tuning (RFT). Our objective combines task utility, KL anchor, and across-tokenizer calibration reward. This makes distillability a practical safety lever for foundation models, connecting robust teacher–student transfer with deployment-aware model protection. Experiments across math, knowledge QA, and instruction-following tasks show that students distilled from distillable calibrated teachers outperform SFT and KD baselines, while undistillable calibrated teachers retain their task performance but cause distilled students to collapse, offering a practical knob for both better KD and model IP protection.

poster

It is my great pleasure and honor to welcome you to the 64th Annual Meeting of the Association for Computational Linguistics (ACL 2026), held in San Diego, California, USA, July 2–7, 2026. ACL 2026 continues our fields tradition of excellence in scholarship, innovation, and inclusivity, and I am deeply grateful to the many volunteers who have worked tirelessly to bring this event to life.

It is exciting to see the many developments in the field reflected at our conference, such as the advancement of large language models (born out of our community) into many application directions. This is not without challenges, partly due to unsolved problems, and partly due to misuse of the technology. All this is reflected well at ACL 2026. The conference also reflects that the field is not only about advancing technology, but also the science of fundamentally understanding language and how it is use by many different speaker communities. 
[Full Message from General Chair Philipp Koehn](https://drive.google.com/file/d/1QiJFOmMjvDgsDo3i1XzlQnImxe3RU_Cy/view?usp=sharing) 
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The 64th Annual Meeting of the Association for Computational Linguistics (ACL 2026) will take place in San Diego, California, from July 2 - 7, 2026.

Diffusion models promise efficient parallel text generation but rely on bidirectional attention, creating a structural mismatch with pre-trained Autoregressive (AR) models. This incompatibility precludes reusing robust AR priors, necessitating prohibitive pre-training from scratch. To bridge this gap, we propose FLUID, a framework that efficiently adapts AR backbones to the diffusion paradigm. By enforcing Strictly Causal Alignment, FLUID enables seamless initialization from standard GPT-style checkpoints, circumventing the need for massive pre-training. Furthermore, we introduce Elastic Horizons, an entropy-driven mechanism that dynamically modulates denoising strides based on local information density rather than fixed schedules. Experiments demonstrate that FLUID achieves state-of-the-art performance while reducing training costs by orders of magnitude, effectively reconciling established AR foundations with efficient parallel generation. Our code is available at https://huggingface.co/MYTH-Lab/FLUID.

From AR to Diffusion: Efficiently Adapting Large Language Models with Strictly Causal and Elastic Horizons

There is a significant gap in evaluating cultural reasoning in LLMs using conversational datasets that capture culturally rich and dialectal contexts. Most Arabic benchmarks focus on short text snippets in Modern Standard Arabic (MSA), overlooking the cultural nuances that naturally arise in dialogues. To address this gap, we introduce ArabCulture-Dialogue, a culturally grounded conversational dataset covering 13 Arabic-speaking countries, in both MSA and each country's respective dialect, spanning 12 daily-life topics and 54 fine-grained subtopics. We utilize the dataset to form three benchmarking tasks: (i) multiple-choice cultural reasoning, (ii) machine translation between MSA and dialects, and (iii) dialect-steering generation. Our experiments indicate that the performance gap between MSA and Arabic dialects still exists, whereby the models perform worse on all three tasks in the dialectal setup, compared to the MSA one.

Cultural Benchmarking of LLMs in Standard and Dialectal Arabic Dialogues

Augmenting Large Language Models (LLMs) with external tools enables them to execute complex, multi-step tasks. However, tool learning is hampered by the static synthetic data pipelines, where data generation and model training are executed as two separate, non-interactive processes. This approach fails to focus on the model's specific weaknesses adaptively and allows noisy labels to persist, degrading training efficiency. We introduce \textbf{LoopTool}, a fully automated, model-aware data evolution framework that closes this loop by tightly integrating data synthesis and model training. LoopTool iteratively evolves both the data and the model through three synergistic modules: (1) \textit{Greedy Capability Probing (GCP)} diagnoses the model's mastered and failed capabilities; (2) \textit{Judgement-Guided Label Verification (JGLV)} uses an open-source judge model to find and correct annotation errors, progressively purifying the dataset; and (3) \textit{Error-Driven Data Expansion (EDDE)} generates new, challenging samples based on identified failures. This closed-loop process is tightly integrated with reinforcement learning training and operates within a cost-efficient, open-source ecosystem, thereby eliminating reliance on costly APIs. Experiments show that LoopTool-8B significantly surpasses its 32B data generator and achieves new state-of-the-art results on the BFCL-v3 and ACEBench benchmarks for its scale. Our work demonstrates that closed-loop, self-refining data pipelines can dramatically enhance the tool-use capabilities of LLMs.

LoopTool: Closing the Data–Training Loop for Robust LLM Tool Calls

We introduce Traffic-R1, a 3B-parameter foundation model with human-like reasoning for Traffic signal control (TSC), developed via self-exploration and iterative reinforcement of LLM with expert guidance in a simulated traffic environment. Compared with traditional reinforcement learning and recent LLM-based methods, Traffic-R1 offers three main advantages: zero-shot generalization, transferring unchanged to new road networks and out-of-distribution incidents by leveraging internal traffic-control policies and reasoning; a compact 3B-parameter design that supports real-time inference on mobile-class chips for edge deployment; and an explainable TSC process that enables multi-intersection coordination through communication and an asynchronous communication network. Extensive benchmarks show Traffic-R1 outperforms strong baselines and training-intensive RL controllers. In production, the model now manages signals affecting over 55,000 drivers daily, reduces average queue lengths by more than 5%, and halves operator workload. We will open source our checkpoint and code to foster further research.

Traffic-R1: Reinforced LLMs Bring Human-Like Reasoning to Traffic Signal Control Systems

Diffusion language models (DLMs) alleviate the inherent latency bottleneck of autoregressive (AR) large language models (LLMs), but their degraded generation quality limits practical applicability. Although knowledge distillation (KD) can be a promising direction for improving performance, we empirically find that naively applying conventional KD yields only marginal gains, or even degrades generation quality. Based on these observations, we propose a novel self-distillation framework for DLMs, namely SelFusion. To enable effective KD without an external teacher model, SelFusion performs two forward passes with different masking levels, defining the hard mode with a larger masking probability and the easy mode with a smaller masking probability. However, the easy mode is not always more accurate than the hard mode and can be overconfident on incorrect tokens. Thus, we introduce bidirectional KD between the two modes, which can dynamically determine the distillation direction based on token-level correctness. Experimental results on instruction-following tasks show that the proposed self-distillation substantially outperforms other KD methods with external LLM and DLM teachers. In many configurations, the student trained with SelFusion even surpasses the performance of the LLM teacher, providing a practical path toward improving DLM generation quality. Source code can be found at \url{https://github.com/scai-research/SelFusion_official}

SelFusion: Self-distillation for Diffusion Language Models

Improving the reasoning abilities of large language models (LLMs) has largely relied on iterative self-training with model-generated data. While effective at boosting accuracy, existing approaches primarily reinforce successful reasoning paths, incurring a substantial calibration cost: models become overconfident and lose the ability to represent uncertainty. This failure has been characterized as a form of model collapse in alignment, where predictive distributions degenerate toward low-variance point estimates.
We address this issue by reframing open-ended reasoning training as an epistemic learning problem, in which models must learn not only how to reason, but also when their reasoning should be trusted. We propose epistemically-calibrated reasoning (EpiCaR) as a training objective that jointly optimizes reasoning performance and calibration, and instantiate it within an iterative supervised fine-tuning framework using explicitly extracted meta-cognitive self-evaluation signals. Experiments on Llama-3 and Qwen-3 families demonstrate that our approach achieves Pareto-superiority over standard baselines in both accuracy and calibration, particularly in models with sufficient reasoning capacity (e.g., 3B+). This framework generalizes effectively to OOD mathematical reasoning (GSM8K) and code generation (MBPP). Ultimately, our approach enables a $3\times$ reduction in the overall inference compute budget, matching the $K=30$ majority-vote performance of STaR with only $K=10$ confidence-weighted samples, entirely without the multi-model overhead of external verifiers.

 EpiCaR: Knowing What You Don't Know Matters for Better Reasoning in LLMs

Large language model (LLM)-based reasoning systems have recently achieved gold medal-level performance in the IMO 2025 competition, writing mathematical proofs where, to receive full credit, each step must be not only correct but also sufficiently supported. To train LLM-based reasoners in such challenging, open-ended settings, strong verifiers capable of catching step-level mistakes are necessary prerequisites. We introduce Hard2Verify, a human-annotated, step-level verification benchmark produced with over 500 hours of human labor. Hard2Verify is designed to rigorously assess step-level verifiers at the frontier: Verifiers must provide step-level annotations or identify the first error in responses generated by frontier LLMs for very recent, challenging, and open-ended math questions. We evaluate 29 generative critics and process reward models, demonstrating that, beyond a few standouts, open-source verifiers lag closed source models. We subsequently analyze what drives poor performance in step-level verification, the impacts of scaling verifier compute, as well as fundamental questions such as self-verification and verification-generation dynamics.

Hard2Verify: A Step-Level Verification Benchmark for Open-Ended Frontier Math

Large language models (LLMs) that fluently converse with humans are a reality - but do LLMs experience human-like processing difficulties? We systematically compare human and LLM sentence comprehension across seven challenging linguistic structures. We collect sentence comprehension data from humans and five families of state-of-the-art LLMs, varying in size and training procedure in a unified experimental framework. Our results show LLMs overall struggle on the target structures, but especially on garden path (GP) sentences. Indeed, while the strongest models achieve near perfect accuracy on non-GP structures (93.7% for GPT-5), they struggle on GP structures (46.8% for GPT-5). Additionally, when ranking structures based on average performance, rank correlation between humans and models increases with parameter count. For each target structure, we also collect data for their matched baseline without the difficult structure. Comparing performance on the target vs. baseline sentences, the performance gap observed in humans holds for LLMs, with two exceptions: for models that are too weak performance is uniformly low across both sentence types, and for models that are too strong the performance is uniformly high. Together, these reveal convergence and divergence in human and LLM sentence comprehension, offering new insights into the similarity of humans and LLMs.

Comparing human and language models sentence processing difficulties on complex structures

As large language models (LLMs) transition from chat interfaces to integral components of stochastic pipelines and systems approaching general intelligence, the ability to faithfully sample from specified probability distributions has become a functional requirement rather than a theoretical curiosity. We present the first large-scale, statistically powered audit of native probabilistic sampling in frontier LLMs, benchmarking 11 models across 15 distributions. To disentangle failure modes, we employ a dual-protocol design: Batch Generation, where a model produces $N{=}1000$ samples within one response, and Independent Requests, comprising $N{=}1000$ stateless calls. We observe a sharp protocol asymmetry: batch generation achieves only modest statistical validity, with a 7\% median pass rate, while independent requests collapse almost entirely, with 10 of 11 models passing none of the distributions. Beyond this asymmetry, we reveal that sampling fidelity degrades monotonically with distributional complexity and aggravates as the sampling horizon $N$ increases. Finally, we demonstrate how the propagation of these failures into downstream real-world application tasks introduces systematic biases: models fail to enforce uniform answer-position constraints in Multiple Choice Question generation and systematically violate demographic targets in attribute-constrained text-to-image prompt synthesis. These findings indicate that current LLMs lack a functional internal sampler, necessitating external tools for applications requiring statistical guarantees.

Large Language Models Are Bad Dice Players: LLMs Struggle to Generate Random Numbers from Statistical Distributions

Detecting fraud in financial transactions typically relies on tabular models that demand heavy feature engineering to handle high-dimensional data and offer limited interpretability, making it difficult for humans to understand predictions. Large Language Models (LLMs), in contrast, can produce human-readable explanations and facilitate feature analysis, potentially reducing the manual workload of fraud analysts and informing system refinements. However, they perform poorly when applied directly to tabular fraud detection due to the difficulty of reasoning over many features, the extreme class imbalance, and the absence of contextual information. To bridge this gap, we introduce FinFRE-RAG, a two-stage approach that applies importance-guided feature reduction to serialize a compact subset of numeric/categorical attributes into natural language and performs retrieval-augmented in-context learning over label-aware, instance-level exemplars. Across four public fraud datasets and three families of open-weight LLMs, FinFRE-RAG substantially improves F1/MCC over direct prompting and is competitive with strong tabular baselines in several settings. Although these LLMs still lag behind specialized classifiers, they narrow the performance gap and provide interpretable rationales, highlighting their value as assistive tools in fraud analysis.

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