What is a Master Promissory Note (MPN)?
• A: The Master Promissory Note is a loan application and promissory note that is designed to be simpler and clearer for both students and schools. Generally, if you borrow from a school that uses the serial MPN and you do not change lenders, you will not have to fill out a new loan application each time you apply for a Stafford loan. The MPN is good for ten years unless no disbursement is made within 12 months after you sign or you send a written notification to the lender to stop it’s use for additional loans. Please be aware that there are schools that use the annual MPN, which means that you must sign a new MPN each time you apply for a Stafford loan.
It is a single promissory note that may be used for all of a borrower’s Federal Direct Subsidized and Federal Direct Unsubsidized Loans. The MPN does not include a specific loan amount since it may serve as the promissory note for future loans. Loans for subsequent years will not require a new promissory note as long as the borrower is at a school in the Direct Loan Program. The borrower is agreeing when he or she signs the MPN to repay the lender (the U.S. Department of Education) all loans made to the borrower under the terms of the MPN. It is important for the borrower to read all of the information on the MPN before signing it. Complete the MPN on-line at: http://dlenote.ed.gov/.
A Master Promissory Note is a “promise to pay” document under which you receive Stafford loans for either a single or multiple enrollment periods. If the school you attend supports multiple enrollment periods, you may sign the MPN only once although you still must apply for loan assistance each academic year.
An MPN is a legally binding contract you sign, agreeing to repay the loan money you have borrowed. The MPN describes your rights and responsibilities as a loan borrower. It is extremely important to read everything included on your MPN. By signing the MPN, you not only agree to repay the money you borrow, but you also agree to all terms and conditions included in the MPN. Once your MPN is signed, a new MPN is not required for any new loans, provided you stay with the same lender. You must sign a Master Promissory Note for each type of loan you are borrowing.
