It's simple, you took out a loan to pay your tuition. The loaning company paid the full tuition to the college and you then pay them back in payments. You are incorrectly assuming that the loaning company simply passed the payments along as you made them. They told you clearly that they paid the college in full. IF the college has a refund policy, then you deal solely with them to get any money back you may be entitled to. If the college doesn't have a refund policy for early drops, then you're stuck. The bottom line is you can't cancel the loan when they've already paid the college in full and you still own the balance of the loan.