Master Promissory Note (MPN) for federal loans
"Master Promissory Note (MPN) for federal loans" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
A promissory note is a signed legal document that indicates your promise to repay your student loan and formalizes your agreement to abide by its terms and conditions and explains your rights and responsibilities as a borrower. It will include information on how interest is calculated and what deferment and cancellation provisions are available to the borrower. It’s very important to read and save this document because you’ll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearance.
To get a loan, the borrower must sign a promissory note that includes a “plain-language disclosure notice” describing the borrower’s obligation to repay his or her student loan. It is valid for 10 years. Use of the MPN may eliminate the need to complete a new promissory note every year a loan is needed. Failure to make an installment payment when it is due, or failure to meet other terms of the promissory note; may lead to default.
The Stafford Loan Master Promissory Note (MPN) is a contract between you and your lender and is good for either a single or multiple academic years. MPN is written promise to repay a sum of money to the holder of the loan within a specified time period.
Signing a promissory note means you agree to repay the loan:
- When you sign a promissory note, you’re agreeing to repay the loan according to the terms of the note.
- The note states that unless you meet the requirements for loan discharge (cancellation), you must repay the loan, even if you don’t complete your education.
- Also, you must repay your loan even if you can’t get a job after you complete the program or you didn’t like the education you received. The U.S. Department of Education does not guarantee the quality of education you receive or that you will find a job in your field of study.
- Your loan will be canceled if your school forged your signature on your promissory note* or falsely certified that you were eligible to get the loan.
- Unlike other promissory notes where only one loan can be borrowed per signed note, the MPN may be used by the school to make multiple Federal Stafford Loans to a borrower using the single note (up to 10 years).