English

SOD: Step-wise On-policy Distillation for Small Language Model Agents

Computation and Language 2026-05-11 v1 Artificial Intelligence

Abstract

Tool-integrated reasoning (TIR) is difficult to scale to small language models due to instability in long-horizon tool interactions and limited model capacity. While reinforcement learning methods like group relative policy optimization provide only sparse outcome-level rewards. Recently, on-policy distillation (OPD) has gained popularity by supplying dense token-level supervision from a teacher on student-generated trajectories. However, our experiments indicate that applying OPD to TIR leads to a critical failure mode: erroneous tool calls tend to cascade across subsequent reasoning steps, progressively amplifying student-teacher divergence and rendering the teacher's token-level supervision increasingly unreliable. To address this, we propose SOD, a step-wise on-policy distillation framework for small language model agents, which adaptively reweights distillation strength at each step based on step-level divergence. Therefore, SOD can attenuate potentially misleading teacher signals in high-divergence regions while preserving dense guidance in well-aligned states. Experiments on challenging math, science, and code benchmarks show that SOD achieves up to 20.86% improvement over the second-best baseline. Notably, our 0.6B student achieves 26.13% on AIME 2025, demonstrating effective transfer of agentic reasoning to lightweight models. Our code is available at https://github.com/YoungZ365/SOD.

Keywords

Cite

@article{arxiv.2605.07725,
  title  = {SOD: Step-wise On-policy Distillation for Small Language Model Agents},
  author = {Qiyong Zhong and Mao Zheng and Mingyang Song and Xin Lin and Jie Sun and Houcheng Jiang and Xiang Wang and Junfeng Fang},
  journal= {arXiv preprint arXiv:2605.07725},
  year   = {2026}
}
R2 v1 2026-07-01T12:57:44.504Z