What is a Master Promissory Note (MPN)?

Once you have applied to schools and submitted your financial aid applications, colleges will begin to send acceptance offers and award letters. Some of the awards presented could be grants, scholarships, or work study. Student loans are also a common award extended to incoming students. Let’s take a look at one component of Federal Direct Student Loans, the Master Promissory Note.

Federal Direct Student Loans: Master Promissory Note

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What is a Master Promissory Note?

A financial aid master promissory note (MPN) is a legal document that a student must sign to receive certain types of financial aid, such as Federal Direct Loans, PLUS Loans, and Perkins Loans.

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Federal Direct Student Loans Agreement

The MPN is a binding agreement between the student and the lender or the U.S. Department of Education, in which the student promises to repay the loan and agrees to the terms and conditions of the loan, such as the interest rate, repayment schedule, and any fees or charges that may apply.

By signing the MPN, the student is acknowledging that they understand their rights and responsibilities as a borrower, and that they are committed to repaying the loan according to the terms outlined in the document. The MPN typically remains in effect for the duration of the student's enrollment in school, and can be used to borrow multiple times without having to sign a new agreement each time.

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There is a lot to be gained from our free general financial aid advice, but it’s also a very individual process. If you have remaining financial aid questions, email us to discuss more or book an individual session.