MPN’s and Promissory Notes

Understanding the fine print

Before you receive any Federal Direct Student Loan, you'll be required to sign a Master Promissory Note, or MPN, which you can do online. An MPN is usually good for 10 years—meaning you don’t need to sign a new one each year.

Private loans typically don’t have an MPN. Instead, they require students to complete an application and sign a promissory note each year they are in school.

What is a master promissory note?

A master promissory note is what it sounds like: a promise to pay a specified amount at a certain time. MPNs for federal direct loans are good for a period of up to ten years. In some instances, however, a new MPN is necessary:

  • Transfer students may need to sign a new MPN.
  • Your parents need to sign an MPN if they take out federal loans on your behalf.

When do you sign the Master Promissory Note?
For federal direct student loans, you can typically execute the MPN online, using the same PIN you used for the FAFSA. Then you'll be able to retrieve a copy of the document online whenever you want.

What is a promissory note?

Promissory notes for private loans are usually only good for a period of 1 year. This is because private loans are usually based on credit, so a lender will want to check your credit each year when you apply for a loan to make sure you will still be approved.

When do you sign the promissory note?
For most private student loans, the promissory note appears at the end of the online application process (before you submit it).

Under federal regulations for a private student loan your lender must:

  • Notify you in writing or electronically whenever it makes a loan disbursement (sends the money to your school).
  • Tell you the date and the amount of the disbursement.
  • Provide you with a self-certification form which will need to be submitted to the loan servicer prior to disbursement.

Know your responsibilities

By signing the MPN (for a federal direct loan) or promissory note (for a private loan), you are legally agreeing to repay the U.S. Department of Education or private loan lender, for all loans—with interest—unless that interest is subsidized by the government (in the case of a federal direct loan).

Be sure to read the terms of the note very closely, and ask about anything you don't understand. Don’t sign until you understand everything in the document.

Additional student loan and college planning resources

How Does Stafford Loan Repayment Work?
How Does Private Loan Repayment Work?
Student Loan Repayment
Postpone Student Loan Payments: Reasons for Deferment
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