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What is a Master Promissory Note?

If you are like most students, you will be paying for college in a number of ways. Scholarships, savings, and need-based grants are a few of the most common ways students pay for college. Student loans are another way that students will fund their education. According to a 2020 research report from Sallie Mae, 34% of students borrowed student loans to pay for college.

Federal student loans are generally the first type of student loans that students will turn to in order to fund their education. After you apply for financial aid with the FAFSA and are awarded student loans, you will come across the Master Promissory Note (MPN).

Don’t miss: Scholarships360’s free scholarship search tool

Master Promissory Note

Most students and parents will just skim over the MPN, but it is important to know what you are signing off on! The Master Promissory Note is important, because it is the legal document that says you promise to repay your loans, interest, and any associated fees to the United States Department of Education.

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The Master Promissory Note will also outline the specifics of what you owe, the interest rates, late fees, repayment options, deferment options, and cancellation options.

When you sign your name to the MPN, you are agreeing to pay back the loans no matter what. Here are a few situations where students will still be responsible for paying back their student loans:

  • If you decide to withdraw from college and don’t earn a degree, you will still be responsible for paying back the student loans that you have taken out.
  • If you graduate from college or grad school and can’t find a job, you are still responsible for paying back the student loans.

Sample Master Promissory Note

Here is a sample MPN:

master promissory note
Source: U.S. Department of Education

This Master Promissory Note is a final step to securing and accessing a loan from the United States Department of Education including Direct Student Loans (also known as Federal Stafford Student Loans) and Direct PLUS loans. Keep on reading to learn everything that you need to know about MPNs.

Types of Master Promissory Notes

There are three types of MPNs:

  1. Undergraduate Students who are taking out Direct Subsidized Loans or Direct Unsubsidized Loans.
  2. Graduate Students who are taking out Direct Unsubsidized Loans, Direct PLUS Loans, or both.
  3. Parents who are taking out PLUS Loans for their child’s undergraduate education.

When do you sign a MPN?

According to the U.S. Department of Education, students must sign a MPN for Direct Loans if:

  • You have never previously signed an MPN for the type of loan you are taking out. 
  • Your school requires you to sign a new MPN each academic year (most schools don’t require this). 
  • You signed an MPN more than one year ago, but no loan was disbursed. 
  • You signed an MPN more than 10 years ago.  

If you are taking out Direct PLUS Loans and require an endorser on your loans (this is usually in situations where the loan applicant has a poor credit history), you may only receive one loan under the MPN that you complete. Additional loans will require applicants to complete new Master Promissory Notes.

Related: FAFSA guide for grad students

How to sign the MPN

When you are reading to complete the Master Promissory Note, you can do so in two ways: sign a paper copy or sign the electronic version. The Department of Education estimates that the process of reviewing and signing the Master Promissory Note takes about 30 minutes.

Note that you will need your Federal Student Aid (FSA) ID to complete your MPN.

The following links will include both the electronic version of the MPS and the PDF version that you can sign:

Questions about the Master Promissory Note?

If you have questions about the MPN, you can contact the Federal Student Aid Office at the Department of Education. Here, you can get support via phone, live chat, and email.

Don’t miss: How to complete the FAFSA

Frequently asked questions

How long is a MPN good for?

An MPN lasts for up to 10 years, though each type of loan has its own MPN, so you will probably end up signing multiple.

How do I get a copy of my Master Promissory Note?

You can download a copy of your MPN using the portal and signing in with your FSA ID. Under the menu bar labeled “My Loan Documents,” select “Completed Master Promissory Notes” to download a PDF of your document.

Are Master Promissory Notes legally binding?

Yes, MPNs are legally binding documents, so make sure that you are prepared to meet the terms of the document before signing.

Do I need a witness to sign my MPN?

You do not need a witness present at the time that you sign your MPN.