Return of Title IV U.S. Direct Loan Funds
Due to Withdrawal or Course Load Reduction

U.S. Direct Loans are awarded on the basis that students will study full-time for their complete period of study. Students “earn” aid through attendance based on the number of calendar days completed while in full-time studies, divided by the total number of calendar days in the period of study. Students who complete 60% or more of their period of study have “earned” 100% of their U.S. Direct Loans. Students who complete less than 60% of their period of study due to withdrawal or reduction of course load to part-time status (less than half-time) are required to repay the portion of their loan that they have not “earned”. For full-time, half-time and less than half-time course load definitions, please see Registration Status.


Responsibility for repaying the portion of “unearned” or overpaid loan to the U.S. Department of Education (DOE) is shared by the student and the University of Toronto.

  • Withdrawal Date: Date when the student notified the Faculty/Division/Registrar’s Office of withdrawal from the University of Toronto.
    • For students who do not notify the University of Toronto of their intention to withdraw, the unofficial withdrawal date (i.e., mid-point date in the student’s period of study or the last day of attendance in an academically-related activity) will be used.
  • Course load Reduction Date: Date when the student dropped a course/s that results in a change to part-time status (less than half-time).

Refer to the Faculty/Division calendars.

Refer to Faculty/Division refund policy.

  • Calculating “unearned” or overpaid U.S. Direct Loans. This calculation must be completed within 30 days of the date that the University Registrar’s Office determines that the student has officially withdrawn.
    • This date may be different from the withdrawal date if the student did not notify the University Registrar’s Office of the withdrawal.
  • Notifying students of any “unearned” or overpaid U.S. Direct Loans, or eligibility for a post- withdrawal disbursement (if all of “earned” funds have not yet been paid to the student by the time of the withdrawal date; see Post-Withdrawal Disbursement). This notification must be made within 30 days of the date that the University Registrar’s Office determines that the student has officially withdrawn.
  • Repaying the student’s “unearned” or overpaid U.S. Direct Loans to the DOE within 45 days of the official withdrawal date.
  • Notifying the University Registrar’s Office immediately, in writing, of their withdrawal or course load reduction. Notification can be made via the Service Portal.
  • Repaying the full amount of their “unearned” loan(s) to the loan holder. This repayment must be done in accordance with the terms of the loan noted in the signed Master Promissory Note.
  • Repaying to the University of Toronto Student Accounts Office within 45 days from the notification by the University Registrar’s Office.
    • The amount of funds returned to the DOE on behalf of the student if this exceeds the credit on the student’s ACORN account.
  • Number of calendar days in the study period.
  • Number of calendar days completed in the study period.
  • Institutional charges (original tuition and fee charges before withdrawal, reduced course load).
  • Total amount of the U.S. Direct Loans awarded, accepted and/or disbursed.

Example:

  • Student is notified that they are eligible for a net US$6,000 U.S. Direct Loans for full-time study for the 2018-19 academic year from Sept 6 to Apr 30.
  • Net US$3,000 U.S. Direct Loans is disbursed for fall term in September.
  • Student withdraws from the University of Toronto effective Nov 5.
  • The University Registrar’s Office determines on Nov 10 that the student has withdrawn.
    • No later than 30 days from this date, the University Registrar’s Office must:
  • Calculate earned and unearned funds.
  • Notify the student of their earned and unearned loans.
  • Calculations:
    • Number of calendar days in the fall term study period = 106 days (Sept 6 to Dec 21)
    • Number of calendar days completed in the fall term study period = 61 days (Sept 6 to Nov 5)
    • Percentage of study period completed = 57% (61 days/106 days)
    • U.S. Direct Loan funds earned = US$1,710 ($3,000 x 57%)
    • U.S. Direct Loans funds not earned = US$1,290 ($3,000 – $1710)
  • Student is notified on Nov 20 of their earned and unearned U.S. Direct Loan funds.
    • No later than 45 days from this date:
  • The University of Toronto must repay the student’s unearned loan funds to the DOE.
  • The student must repay any portion of their unearned loans to the University of Toronto if the credit on their ACORN account after their withdrawal/course reduction is less than the unearned loans returned by the University of Toronto to DOE on their behalf.

Students may be eligible for a post-withdrawal disbursement if all of the “earned” loan funds have not yet been paid to them by the time of their withdrawal date.

Notification will be sent to the student regarding eligibility for a post-withdrawal disbursement within 30 days of the date that the University Registrar’s Office determines that the student has officially withdrawn. Students will have 14 days from the date of notification to respond in writing that they will accept or decline all or a portion of the post-withdrawal disbursement.

If students accept the post-withdrawal disbursement, the loan funds will be disbursed to students’ ACORN accounts within 180 days of the date when the University Registrar’s Office determined that the student has officially withdrawn.

For post-withdrawal disbursements of Parent PLUS Loans, notification will be made through the student, and the response to accept or decline all or a portion of the post-withdrawal disbursement must be made by the parent in writing. Parents should note that any post-withdrawal disbursements that they accept will still be disbursed to the students’ ACORN accounts.

The University Registrar’s Office will not issue any post-withdrawal disbursement of loan funds if students and parents fail to respond within the required 14 days.

The unearned funds that students re-pay will be returned to their U.S. Direct Loans account in the following order:

  1. Unsubsidized U.S. Direct Loan
  2. Subsidized U.S. Direct Loan
  3. Parent PLUS U.S. Direct Loan
  4. Graduate Professional PLUS U.S. Direct Loan

Please visit the University Registrar’s Office Service Portal.  
Select “Get Help”  
Select an area of inquiry: Financial Aid (OSAP, BSWD, UTAPS, etc.)  
Further specify the area of inquiry: U.S.A. Student Aid