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Additional information on federal direct loans is available from the Dept. of Education at

There are three types of direct loans:

Federal Direct Subsidized Loans

These are based on financial need. The government will pay the interest on the loan while the student is in school.

Federal Direct Unsubsidized Loans

Students get federal direct unsubsidized loans regardless of need but will have to begin paying interest charges while in school.

Federal Direct PLUS Loans

Parents of dependent students can borrow a Federal Direct PLUS Loan to help pay for their child’s education.

Application Procedures

All students must complete the Free Application for Federal Student Aid (FAFSA) by using “FAFSA on the Web” at Once the FAFSA has been completed and SUNY Sullivan has the results, the student loan application process consists of four basic steps:

  1. Have your FSA ID and password ready
  2. Complete your online loan entrance counseling
  3. Complete and your electronic Master Promissory Note
  4. Complete your Federal Direct Loan Request Form

Step 1. Have your FSA ID and password ready

The FSA ID and password enables you to login to certain Federal Student Aid Websites and you can electronically sign your Federal Student Aid documents which holds the same legal status as your written signature. You should keep your FSA ID and password in a safe place and not share them with anyone.

If you forgot your FSA ID or password, please click here.

Step 2. Complete your Online Entrance Counseling

All federal direct loan borrowers must complete student loan entrance counseling. Borrowing a student loan is a serious financial obligation and the entrance counseling will provide you with the important information you need to know to be able to make an informed decision about student loan borrowing. The entrance counseling must be completed before any loan funds will be dispersed.

Complete your online entrance counseling on the Federal Direct Loan website at Each entrance counseling page will provide you with information about Federal Direct Loans. There will be a quiz after each section. Once you have completed the entrance counseling, you will then be taken to the Completion Verification page which will display your information. You may print a copy of this page for your records. SUNY Sullivan will be notified electronically when you complete your counseling. The entrance counseling session will take approximately 30 minutes to complete.

Step 3. Complete and Sign your Electronic Master Promissory Note (MPN)

First-time direct loan borrowers need to sign a Federal Direct Loan Master Promissory Note (MPN). If you have already signed a Federal Direct Loan MPN previously for SUNY Sullivan or another direct loan college (online or paper), you do not have to complete a new MPN.

Students can complete and sign their MPN electronically on the web at Click on Log In Under Manage My Direct Loan. To complete an electronic MPN, students will need to use their FSA ID and password. Students who do not have a computer or the appropriate software may use computers available on campus to complete the process. Completing an electronic MPN is very simple and easy. You must complete the entire process in a single session so be prepared and give yourself plenty of time. If you exit the site before signing your electronic MPN, you will be required to start over from the beginning.

IMPORTANT: Be ready to provide two references (name, address and telephone number). These should be people who have known you for at least one year (preferably relatives) and who live at different addresses. Remember to always use your full legal name as it appears on your social security card.

Step 4. Complete the Federal Direct Loan Request Form

The Federal Direct Loan Request Form is in an Adobe Acrobat PDF format. If you are unable to view PDF files please download Adobe’s free Acrobat Reader by clicking on this link: Free Adobe Acrobat Reader.

Once you have completed the Federal Direct Loan Request Form, submit it to the financial aid office.

Eligibility Criteria

To be eligible for a federal direct loan a student must:

  1. be a U.S. citizen or permanent resident alien;
  2. be taking at least six credit hours and be matriculated in a degree program;
  3. not owe any refunds on a Pell Grant or other awards received and not be in default on repayment on any type of student loan.

Each new student loan recipient will be required to attend an entrance interview before a loan application is processed and an exit interview when graduating or terminating from school.

Maximum Loan Amounts

A first-year dependent undergraduate student may borrow up to $3,500 per year with eligibility increasing to $4,500 in the second year (with a minimum of 28 degree credits earned). Dependent students may apply for up to an additional $2,000 in an unsubsidized loan. Independent students may borrow up to $6,000 per year in additional unsubsidized loan eligibility. Dependent parents whose parents do not qualify for the Federal Direct PLUS may also be eligible for up to an additional $4,000 in an unsubsidized loan.

**** Time limitation on Direct Subsidized Loan Eligibility for New Borrowers

Beginning with July 1, 2013 Public Law 112-141 limits for new borrowers of a Federal Direct Subsidized Loan to 150% of the required length to complete a degree, or 3 years of eligibility to complete an associate degree. (For example: A student enrolled in a 2 year program will have 3 years worth of subsidized eligibility.)

Interest Rate

The interest rate for Subsidized and Unsubsidized Federal Direct Loans first disbursed or or after July 1, 2016 is 3.76%. In addition, the loans are charged a loan fee of 1.068%.  For loans first disbursed on or after October 1, 2016, the loan fee will be 1.069%.

Receipt of Loan Funds/Right to Cancel or Lower Amount of Loan

Your loan funds will be credited to your student billing account in equal disbursements for all semesters reflected on your award letter. You will be notified by e-mail when your loan funds have been credited to your student account and you will also be notified that you have the right to lower or cancel the amount of the loan disbursement within 14 days of receiving the notice from the school that the money was credited. You also may request that any refund that you receive be returned to the direct loan program to lower the amount of your loan. At any time prior to receipt of the loan, you have the right to lower your loan amounts or to cancel any and all of your loans by notifying the office of financial aid in writing.

Exit Counseling

Federal regulations require that all student loan borrowers must have an exit interview/exit counseling during their final semester at the college. All borrowers should plan to complete an exit counseling prior to dropping below six credits, withdrawing or graduating. Exit counseling is completed at the website. Topics include: rights and responsibilities of borrwers, when repayment starts, various repayment plans, deferments, loan consolidation and consequences of default. This site also gives the borrower up-to-date information on his/her student loan balances.

Students may access information about exit counseling at This provides access to the Exit Counseling Guide as well as the information on repayment plans, deferments and consolidation.


There are several ways to repay a federal direct loan:

A standard repayment plan has a fixed monthly repayment amount for a fixed period of time, usually 10 years.

An extended repayment plan has a lower fixed monthly payment amount and loan repayment can be extended beyond the usual 10 years.

A graduated repayment plan usually begins with lower monthly payments and payment amounts increase at specified times. Payments may be the usual 10-year period or they may be extended beyond the usual 10 years.

Income-contingent repayment plan set annual repayment amounts based on the borrower’s income after leaving school. The loan is repaid over an extended period of time not to exceed 25 years.

A servicing agency will be responsible for maintaining the loan account and repayments. It is the student’s responsibility to maintain contact with that agency.

Loan Consolidation

Students who have previously borrowed FFELP student loans through a lending institution and who are now borrowing a federal direct loan are encouraged to consolidate all of their student loans into one federal direct consolidation loan. This will help the borrower avoid the situation of owing two separate loans to two different lenders. Borrowers who are interested in consolidating all of their student loans into one consolidation loan can apply for a Direct Consolidation Loan at